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Developer Can Use Working Fund Contributions to Offset its Financial Obligations to a Homeowner Association
October 23, 2019
Jeffrey R. Margolis
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Real Estate Development, Homeowners Association, Working Fund
It is common practice for developers to collect working fund contributions or initial contributions upon the sale of homes in communities operated by homeowner associations. The amount of working fund contributions or initial contributions can be either a specific dollar amount or an amount equal to 2-3 months of association assessments. In a recent opinion, a Florida appellate court ruled that such contributions may be used by the developer to offset the developer’s deficit funding obligation to the homeowner association.