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New financial reporting requirements

BY PETER S. SACHS – THE ASSOCIATION BARRISTER

As of July 1, 2017, new regulations govern condominium and homeowners’ associations. Among the changes, financial reporting requirements were amended to make reporting requirements uniform across Chapter 718, 719 and 720 of Florida Statutes (HB 6027). The changes to the financial reporting requirements of all three Chapters impacting condominium, cooperative and homeowners’ associations may be summarized as follows:

  • Removes an exception for communities with fewer than 50 units to prepare a report of cash receipts and expenditures rather than preparing a financial statement.; The law now requires associations to prepare a form a financial reporting based on the association’s total annual revenues regardless of the size of association.
  • Removes provisions in Chapter 718 and 719, which prohibited condominiums and cooperatives from waiving annual financial reporting for more than three consecutive years. The law now permits condominium, cooperative and homeowners’ associations to prepare a report of cash receipts and expenditures in lieu of preparing a formal, audited financial statement, if a majority of the voting interests present at a duly called meeting consent.

In addition, condominium associations have the following additional duties regarding financial reporting (HB 1237):

  • Once a unit owner submits a written request for a copy of the most recent financial report, the association must provide a copy or provide a notice that a copy will be mailed or hand delivered to the unit owner, without charge, within five business days after receipt of the written request.
  • If the association fails to provide a copy of the most recent financial report or fails to notify of its intent to provide such a copy, within five business days, then the unit owner may provide a written notice to the Division of Florida Condominiums, Timeshares, and Mobile Homes. The Division is authorized to enforce the association’s compliance with the request.
  • Condominium associations must provide an annual report to DBPR providing the names of all financial institutions with which the association maintains accounts and a copy of such report may be obtained from DBPR upon the written request of any unit owner.

The above financial reporting requirements are only a small portion of the changes that took effect on July 1, 2017. Future columns, will discuss other changes to the law that have gone into effect.

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Peter S. Sachs is the managing director with Sachs Sax Caplan in Boca Raton, Fla.

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