HOAleader.com - Tip of the Week - August 1, 2014
Published: Fri, 08/01/14
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Smart Responses When Owners Insist on an HOA Audit
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In this week's tip, we offer a glimpse into state laws on whether owners can
demand your HOA do a formal audit of its books. And, frankly, the laws on
audits for associations are all over the board. Here's a taste of the
different ways they're treated:
* In California, the decision's totally up to the board.
"In California,every common-interest development has to have at least a
review done every year," says Andrew Schlegel, CCAM(r), executive vice
president of community management for Orange County and Los Angeles at
FirstService Residential in Aliso Viejo, Calif. "An audit is the most
comprehensive look at the financials. A review is one level down. A
compilation is the lowest level. The results of that review must be
distributed to the membership within 120 days of year end. So owners
could ask the board for an audit instead of the review. But that would
be up to the board. They don't have to do it."
* In Colorado, the board decides when to conduct an audit.
But dissatisfied homeowners can demand an audit if their association's
annual revenue or expenditures are $250,000 or more and they can gather
the support of one-third or more of the owners to formally request an
audit. For associations smaller or with lower revenue or expenditures,
the right is to a financial review, not a full audit, and one-third of
owners must agree.
* In Florida, condos and HOAs have different rules.
Condo associations with total annual revenues of at least $500,000, unless
they have fewer than 50 units, are required to prepare audited financial
statements. The owners can waive that requirement if a majority of the
voting interests present at a properly called meeting choose to do so.
Associations with lower revenue are required to prepare either a review
or compilation. The statute is silent on when owners can demand an audit.
The requirement is the same for HOAs. But if 20 percent of HOA parcel owners
petition the board for a level of financial reporting higher than required
by law, the association must notice up and hold a meeting within 30 days to
vote on raising the level of reporting for that fiscal year. With a majority
vote, the owners can demand that higher level of reporting be provided
within 90 days of the meeting or the end of the fiscal year, whichever is
later.
Find out the rules in Michigan and Texas, too. And get tips on how to handle
owners' demands for a full audit in a way that preserves the trust you've
built with them in our new article:
http://www.hoaleader.com/members/1042.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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Owners Demand an Audit of Your HOA Books: Tips for Responding
In most cases, an audit is done when the homeowner association board decides
it wants one. But in some states, like Colorado, owners can demand an audit.
Here we discuss when owners have a right to insist on an audit, whether it's
even necessary, and tips on handling such a request properly.
Click here to read full article:
http://www.hoaleader.com/members/Owners-Demand-Audit-Your-HOA-Books-Tips-for-Responding.cfm
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Tensions in Mixed-Use Communities: Careful How You Fight Back
In this week's tip, we offer tips to help your residential owners live
happily ever after with your commercial owners.
Frustrated with noise, traffic, or odors coming from another occupant in
your association's mixed-use facility? Think twice about waging war
before checking whether you actually have the right to do so.
Click here to read full article:
http://www.hoaleader.com/members/Tensions-in-MixedUse-Communities-Careful-How-You-Fight-Back.cfm
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Four Must-Knows When Collecting HOA Fees from Military Servicemembers
The federal Servicemembers' Civil Relief Act offers active-duty
servicemembers some protections in debt collection and foreclosure
actions. Here's what you should know before pursuing debt collection or
foreclosure activities against an owner who's also serving in the
military.
Click here to read full article:
http://www.hoaleader.com/members/Collecting-HOA-Fees-from-Military-Servicemembers.cfm
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Update: Has Florida Law Changed for When Nobody Runs for Office?
In a September 2012 HOAleader.com article, we discussed state laws and
offered tips for proceeding when nobody runs for the board. One of our
Florida experts noted that under Florida laws governing HOAs, the problem
solves itself because board members serve until their replacement is
selected.
Click here to read full article:
http://www.hoaleader.com/members/Update-Has-Florida-Law-Changed-for-When-Nobody-Runs-for-Office.cfm
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Four Tips for Peacefully Co-Existing with Your HOA's Mixed-Use Neighbors
The growth of mixed-use condo facilities that include condos, retail, and
entertainment venues has triggered nasty disputes, and condo owners and
associations have been accused of making false complaints and harassment
in their attempts to get businesses shut down.
Here our experts reveal whether they've seen an increase in disputes in
mixed-use communities and offer four tips for ensuring that residents can
peacefully co-exist with businesses.
Click here to read full article:
http://www.hoaleader.com/members/Four-Tips-for-Peacefully-Co-Existing-with-Your-HOAs-Mixed-Use-Neighbors.cfm
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