Do your communities ever have surplus funds in their operating accounts at the end of their fiscal years?  If so, what have you done with such funds?  Unbeknownst to many, CCIOA actually addresses this issue for post-CCIOA communities (i.e. communities created after July 1, 1992).

Section 314 of CCIOA describes “surplus funds” as funds that remain in the association’s possession after payment of common expenses by owners and transfer of funds into reserves.  However, for this definition to make sense, one would also have to assume that “surplus funds” are the funds remaining after the payment of association expenses and not just prepayment of reserves.

Assuming your community was created after July 1, 1992, and your documents are silent as to surplus funds, any surplus funds remaining in the association’s possession must be paid back to the unit owners in proportion to their common expense allocations, or such amounts must be credited back to unit owners (in proportion to their common expense allocations) and applied toward future assessments.

On the other hand, if your declarations address surplus funds and what must be done with such funds, you must comply with the specifications of your documents.

If you have questions or want to know more about surplus funds, please contact a Altitude Community Law attorney at 303.432.9999.

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