Florida Broker Practice Exam

What document is required for resale units from a private party?

1. Prospectus

2. Most recent year-end financial report

3. Estimated operating budget

4. Lease agreements

The correct answer is: Most recent year-end financial report

The most recent year-end financial report is required for resale units from a private party because it provides potential buyers with critical financial information about the condominium or homeowners' association. This report outlines the financial status of the community, including income, expenditures, and overall financial health. It is essential for prospective buyers to understand the association’s financial liabilities and assets before making a purchase. In particular, this report can highlight any outstanding debts, projected income from assessments, and how effectively the association is managing its budget. This transparency helps ensure that buyers are fully informed about potential costs and financial obligations associated with ownership in the community. Other documents, while relevant in different contexts, do not provide the same level of financial detail necessary for a buyer to assess the viability and risks involved in purchasing a resale unit.