A resale certificate for a Georgia condominium unit shows a reserve fund balance of $200,000. However, the association has borrowed $150,000 from the reserves to cover operating expenses. What disclosure concern does this raise under the Georgia Condominium Act?
Correct Answer
D) The association should have disclosed the encumbrance against reserve funds, as it materially affects the association's financial condition
Under O.C.G.A. § 44-3-111, the resale certificate must accurately represent the financial condition of the association. Borrowing against reserves materially reduces the funds actually available for their intended purpose (major repairs and replacements), and failing to disclose this encumbrance presents a misleading picture of the association's financial health to prospective buyers.
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More Ga Community Association Questions
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