CCS CCS Reserve Studies & Capital Planning 3

Question 1

Which Florida statute requires condominium associations to conduct reserve studies and maintain reserves for specific components, influencing CCS exam content?

Accepted Answer

Florida Statute Chapter 718 (Condominium Act)

Answer

Florida Statute Chapter 720 (HOA Act)

Answer

Florida Statute Chapter 83 (Landlord-Tenant Act)

Answer

Florida Statute Chapter 617 (Not-for-Profit Act)

Question 2

What is the 'useful life' of a component in the context of a reserve study?

Accepted Answer

The estimated total years a component is expected to function before requiring replacement

Answer

The age at which a component qualifies for a tax deduction

Answer

The number of years left on the manufacturer's warranty

Answer

The period covered by the current insurance policy

Question 3

A condominium board may waive or reduce reserve funding only if:

Accepted Answer

A majority of unit owners vote to waive or reduce reserves at a duly noticed meeting

Answer

The property manager recommends it in the annual report

Answer

The association's CPA approves the budget

Answer

The board passes a resolution by a two-thirds supermajority

Question 4

What does 'remaining useful life' (RUL) mean for a condominium component listed in a reserve study?

Accepted Answer

The estimated years before the component will need to be replaced or significantly repaired

Answer

The number of years since the component was last replaced

Answer

The years remaining on the associated service contract

Answer

The depreciation period used for federal income tax purposes

Question 5

Why is it important for a CCS specialist to understand the relationship between the reserve study and the condominium's governing documents?

Accepted Answer

The CC&Rs and bylaws may specify reserve funding minimums, waiver procedures, and which components must be funded

Answer

Governing documents set the association's tax filing deadlines

Answer

Governing documents determine the interest rate on reserve investments

Answer

State law forbids reserves not specifically named in the declaration

Question 6

Which of the following best describes the 'cash flow funding' method for reserve planning?

Accepted Answer

Projecting income and expenses year by year to determine the contribution needed to avoid a negative balance

Answer

Keeping all reserve funds in a single checking account for easy access

Answer

Funding each component separately in individual accounts

Answer

Using insurance proceeds as the primary reserve funding source