What method is used to determine the need for a special assessment?

The correct answer involves evaluating the budget and comparing it to the actual income and expenses. This method is essential in assessing the financial health of a community association and determining whether a special assessment is necessary.

When managing a community association, it is crucial to have a clear understanding of the budget, as well as actual financial performance. By comparing the budgeted income and expenses against what has actually occurred, managers can identify discrepancies that may necessitate additional funding. If actual expenses exceed budgeted amounts or if there are unforeseen costs, a special assessment might be required to cover those shortfalls.

This method allows community managers to make informed decisions based on quantitative data rather than relying on arbitrary percentages of revenue or waiting until the end of the fiscal year, which could delay necessary funding and exacerbate financial issues. Ensuring that assessments are based on actual performance rather than assumptions is a best practice in community association management.