Chapter 11

The flashcards below were created by user S on FreezingBlue Flashcards.

  1. Describe the steps to approve a budget
    A. Board approval
    B. Member approval
    A. Must provide notice and limited proxies. Requires majority TVI members present in Cono/Coop. 30% TVI in HOA.

    B. 14 day notice by mail or hand and posted in common place. Affidavit must be executed by person who noticed the meeting
  2. The maintenance assessment in Del Boca Vista Condo, excluding reserves and one time expenses, increased by 120% from 2010 to 2011. What alternatives do the members have?
    • 10% of TVI are entitled to petition board to call special membership meeting to adopt substitute budget.
    • Must exclude certain items from the current year and prior assessments: Reserves, Anticipated expenses and assessments for betterments.
    • See Figure 11-3
  3. Del Boca Vista does not have sufficient funds in its roof reserve to replace the roof in 2011. It also needs to repair the concrete on the balconies and reseal the parking lots. What alternatives does the board have? What are the steps it must take?
    • Special assessments.
    • Board must identify specific purpose:
    •   Clearly identify items on which it proposes to expend funds and their costs.
    •   Some atty say they may not be increased from proposal mailed to members.
    •   If increased, must re-notice with new amended items and costs.
  4. How are surplus funds permitted to be used in an association?
    A. Operating Budget
    B. Special Assessment
    • A. Used to reduce the following year's assessment or transferred to a reserve account in any combination of allocation dedicated by board.
    • B.  Refund members (Never give money back). Used to offset future expenses in operating budget. Transfer to reserve account. Applied to proposed special assessment.
  5. Mrs. Jones has not paid her assessment for this month. Describe the process Boca Vista Condominium must undertake to collect the money and how the monies collected are applied (order).
    • Interest - 18% simple interest max 
    • Late fees - $25 or 5% of assessment whichever is greater
    • Fees to management company (administrative fee) Return check fee, may charge a labor cost
    • Atty fees & court costs
    • Fines (option of DBPR)
    • Assessment - Accelerated assessments (amount due for remainder of budget year)
  6. Jose LaGuardia has a lessee in his unit. He has not paid his assessment for four months. What alternative does the association have and what are the limitations?
    • Association may make a written demand that the tenant pay to the association the subsequent rental payments and continue to make payments until all obligations of the owner have been paid.
    • If tenant pre-paid and provides evidence 14 days after demand will receive credit but must make any subsequent payments to association.
  7. Describe the lien and foreclosure process in a
    A. Condo
    B. HOA
    C. Coop
    A. Lien - 30 Day notice, sent first class certified or personal service (Chapter 48 FR of civil procedure) Foreclosure - 30 Day notice

    B. Lien - First class mail and if most recent address is unit certified mail in not registered or certified mail. If outside US to the unit owner at his most recent address. Foreclosure - same as condo.

    C. Lien - 45 Day notice sent by certified or registered mail return receipt as well as first class. Foreclosure - 45 Day notice:
    If member responds with a quality offer, foreclosure is stayed for 60 days
    Qualifying offer requires that member make offer in writing, stating amounts owed and date received.
    Offer must be notarized.
    Member must send certified mail or by hand.
    Association cannot charge any legal fees within stay or cost.
    If member fails to adhere, HOA can move for foreclosure.
    (this multiple choice question has been scrambled)
  8. What is GAAP?
    General Accepted Accounting Practices
Card Set:
Chapter 11
2013-05-03 02:51:02
Financial Management Part One

To understand budget adoption process To learn about special assessments To review how associations may use surplus funds To understand how association collect assessments and remedies available when members do not pay To understand the collections and the lien process To identify accounting software available to associations
Show Answers: