Public offering statement: which statement is true?

• A. It is a governing document
• B. It is not required by law
• C. It provides information to the first prospective buyers in a new development and is mandated by statute but is not a governing document
• D. It is used to set annual budgets

Answer: (C)

A public offering statement is a legally required disclosure for buyers in a new development. It gives first prospective buyers essential information about the project, the governing structure, anticipated assessments, financial status, and what to expect as the development moves toward turnover. It is mandated by statute, meaning law requires it before initial purchases can proceed. Importantly, it is not a governing document like CC&Rs or bylaws, which set rules for the association. Nor is it used to set annual budgets; budgeting is a separate process handled by the HOA after turnover. So the true statement is that it provides information to the first prospective buyers in a new development, is mandated by statute, but is not a governing document.