If your project is a Condominium, or a Planned Development, you will need a homeowner's association budget. This budget is a computation of all the expense items which are associated witha common interest project, such as common area insurance, monthly maintenance expenses, reserves and management.
If your project will require a Public Report from the Department of Real Estate (DRE), it is essential that your budget preparer be familiar with the requirements of the DRE as well as experienced in the type of subdivision you are developing. Upon request, your Chicago Title Sales Representative will provide you with a list of qualified budget preparers who are familiar with the requirements of the DRE.
The following are the forms and documents provided by your budget preparer for review by the DRE:
Because your budget preparer will be calculating the common expenses of your project, you will need to provide him or her with your architectural plans and landscape plans. Your budget preparer will also need information from you about the cost and quality of the facilities you plan to include in your project.
- Association Budget and accompanying worksheets (Form RE 623)
- Common Facilities Questionnaire (Form RE 624A)
- Reserve Study, if the project is a condominium conversion or a previously approved project that has been operational for over a year
- Conversion Questionnaire (Form RE 639), if the project is a conversion or has been operational for over a year
- Analysis of whether the association dues should be equal or an unequal formula based on unit square footage (condominium developments only)
- Analysis, if requested, of the financial benefits of a maintenance agreement
Your budget preparer is an essential part of your team and should be included in any discussions about changes to the project or the common facilities being offered. When included in discussions early and at every point of change, your budget preparer can suggest ways of keeping the cost to your buyers down as much as possible.