Virginia Code 55.1-1965: Annual budget; reserves for capital components
A. Except to the extent provided in the condominium instruments, the executive board shall, prior to the commencement of the fiscal year, make available to unit owners either (i) the annual budget of the unit owners’ association or (ii) a summary of such annual budget.
Terms Used In Virginia Code 55.1-1965
- Capital components: means those items, whether or not a part of the common elements, for which the unit owners' association has the obligation for repair, replacement, or restoration and for which the executive board determines funding is necessary. See Virginia Code 55.1-1900
- Condominium: means real property, and any incidents to or interests in such real property, lawfully subject to this chapter by the recordation of condominium instruments pursuant to the provisions of this chapter. See Virginia Code 55.1-1900
- Condominium instruments: means , collectively, the declaration, bylaws, and plats and plans recorded pursuant to the provisions of this chapter. See Virginia Code 55.1-1900
- Executive board: means an executive and administrative entity, by whatever name denominated, designated in the condominium instruments as the governing body of the unit owners' association. See Virginia Code 55.1-1900
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Unit: means a portion of the condominium designed and intended for individual ownership and use. See Virginia Code 55.1-1900
B. Except to the extent otherwise provided in the condominium instruments, the executive board shall:
1. Conduct a study at least once every five years to determine the necessity and amount of reserves required to repair, replace, and restore the capital components as defined in § 55.1-1900;
2. Review the results of that study at least annually to determine if reserves are sufficient; and
3. Make any adjustments the executive board deems necessary to maintain reserves, as appropriate.
C. To the extent that the reserve study conducted in accordance with this section indicates a need to budget for reserves, the unit owners’ association budget shall include:
1. The current estimated replacement cost, estimated remaining life, and estimated useful life of the capital components as defined in § 55.1-1900;
2. As of the beginning of the fiscal year for which the budget is prepared, the current amount of accumulated cash reserves set aside to repair, replace, or restore the capital components and the amount of the expected contribution to the reserve fund for that fiscal year;
3. A statement describing the procedures used for estimation and accumulation of cash reserves pursuant to this section; and
4. A statement of the amount of reserves recommended in the study and the amount of current cash for replacement reserves.