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What to do if Your Florida HOA Has Surplus Funds in Its Condo Budget

Ending the fiscal year on a high note with surplus funds in your budget can be a positive situation for your Florida condo association. Though it may sound increasingly rare, it does happen, and your board of directors needs to know what to do if such a situation were to arise. 

If your Florida HOA finds itself with surplus funds in its condo budget, here are some steps the board of directors should take. 

First, Review Your Governing Documents and the Law

The Florida Condominium Act leaves the handling of common surplus funds to the discretion of each individual HOA’s board of directors. The guidance is such that “…common surplus [funds] may, at the discretion of the board, either be returned to the unit owners or applied as a credit toward future assessments.”

To gain more clarity unique to your HOA, you should also review your association’s governing documents, including the CC&Rs and bylaws. These documents should provide guidelines on how surplus funds can be utilized and whether or not a vote or specific approval process is required for major financial decisions like this.

Next, Remain Transparent

Regardless of how your association board chooses to proceed with the surplus, it must remain transparent. Making decisions that benefit the entire community is an essential responsibility of any board member. Often board of directors will use surplus funds as an opportunity to conduct a reserve study if it hasn’t done one recently, address maintenance issues, reduce future assessments, or address other community needs. 

Before taking any action, we recommend consulting with a Florida community law attorney. You want to ensure your association’s finances remain in line with legal requirements and best practices. Our team at Dania Fernandez and Associates, P.A. can help. Contact us today to ask your questions about Florida community law.

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