BUDGETS EXPLAINED

Frank Landrian
Jul 21
2 min read

Blog 1: Understanding HOA Budgets in Florida – What Every Homeowner Should Know

Introduction:Each year, Florida homeowners’ associations (HOAs) are required by law to adopt an annual budget. This budget outlines how the association will allocate funds to manage community operations, maintenance, and improvements. But what exactly goes into that budget—and how does it affect you as a homeowner?

What the Law Requires:Under Florida Statute 720.303(6)(a), HOAs must prepare an annual budget that includes:

Estimated revenues and expenses for the year
Surplus or deficit expected at year-end
Separate line items for recreational amenities, even if owned by a third party

Every homeowner must receive a copy of the budget or be informed in writing that a copy is available at no cost.

Why It Matters:A well-prepared budget helps maintain property values and ensures transparency. It also gives homeowners insight into where their assessments are going.

Pro Tip: Always review your association’s annual budget—it’s your right and your responsibility.

Blog 2: Reserve Accounts in Florida HOAs – Voluntary or Mandatory?

Introduction:Reserve accounts fund future repairs or replacements of major community assets—like roofs, roads, or pool decks. But not all Florida HOAs are required to maintain them. Here's what you need to know.

Voluntary vs. Mandatory Reserves:

If reserve accounts are not established, the association must include a disclaimer in its financial reports warning that special assessments may be necessary.
If reserves are approved by a majority of voting interests, they become mandatory and must be calculated and maintained according to state formulas.

Calculating Reserves:The formula is based on:

Useful life of each asset
Estimated replacement cost
Current reserve balance

Associations may use separate or pooled reserve accounts, but the math must ensure that the fund keeps pace with expected costs over time.

Takeaway:Funding reserves is not just best practice—it protects owners from unexpected, costly special assessments.

Blog 3: Financial Transparency and Reporting Requirements for HOAs in Florida

Introduction:Florida law requires all HOAs to provide financial reports to members annually. The type of report depends on the association’s revenue, and unit owners have a say in the level of detail.

Reporting Thresholds (F.S. 720.303(7)):

Revenue Range	Financial Report Required
Less than $150,000	Cash receipts & expenditures
$150,000 - $299,999	Compiled financial statements
$300,000 - $499,999	Reviewed financial statements
$500,000 and above	Audited financial statements

Owners Can Request More Detail:If 20% of owners petition the board, a vote must be held to raise the reporting standard for that fiscal year—regardless of the governing documents.

Timeframes: