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What financial reports should condo association owners receive?

Posted on Sun, Sep 09, 2012 @ 08:10 AM
I would like to see the financial statements for my Florida condo on a monthly basis (estatement acceptable) but have been told that the balance sheet is all that will be provided. Is that correct?


We usually give out a statement of assets, liabilities and a balance at the owners meetings. The full financials contains owners who are late paying which need to be private plus income and expenses in detail. Usually you can request a full report by visiting the management company. They will let you view it but wont give you a copy.

posted @ Sunday, September 09, 2012 8:27 AM by Bill Bondar

In New Jersey, owners are entitled to review all financial records [excluding owner account files] with reasonable notice to the association. Typically the inspections are performed at the managing agent’s office and depending on the association’s policy, there may be costs involved for the production of same as well as supervision during such inspection.  
At a minimum, the association should make available to the owners its annual audited financial statement. Depending on the fiscal year of the association, such audits are typically completed [at least in draft] 90 days after the close of the year to allow for the auditors to perform their tests, confirmations, and accruals, etc. Many associations will not reprint the audits in mass and mail them to all owners but rather advise all copies are available upon request [it’s encouraged that all owners to make these requests]. If the association has a website, what better way to post this for all owners to retrieve at their convenience.  
In addition to the above, being transparent as to the status of the association’s finances during the year is paramount to making sure all owners are aware of the association’s financial status. A simplified report announcing cash balances, receivables, payables and year to date status of total income vs. expenses provides a good snap shot. Of course, the reporting of such information must always be qualified with the advice that the information is subject to year-end auditing which may slightly vary based on how expenses are classified [i.e. reserve, deferred or operating expense classifications].  
Being transparent only helps an association and its membership better understand financial positioning of their community and better educates all when it comes time to prepare annual budget, future reserve planning and of course the inevitable time when a special assessment is needed.  

posted @ Sunday, September 09, 2012 8:29 AM by Edwards S Frank, CMCA, AMS, PCAM

I'm wondering why you need to see them and why the balance sheet isn't sufficient. 
Per your condo's governing documents and state statute(s), you probably have a right to see more than just the balance sheet BUT you probably have to pay to receive them. Our governing documents say something like "an owner may request an audit of the books at any time, however, the owner must pay a reasonable amount for research and/or copying costs". As a property manager who receives a full set of financial reports each month, frankly I think that some of them are none of your business. For example - Accounts Receivable. I would be very hesitant to give an owner the list of accounts that are overdue - some of those accounts belong to your neighbors! If you were behind in paying your condo dues, I doubt you would want everyone to know. 
That being said, I think that owners SHOULD have a general idea about what is going on, financially. Our treasurer sends out a quarterly update to owners that seems to be effective. He may include a general statement that "X number of owners are 30+ days overdue; the total amount of dues in arrears is X" - I think this is much more appropriate than handing over the whole set of financials every month. 
If other owners feel that they are not adequately informed about the financial state of affairs in your condominium complex, perhaps you could all request something similar to what I've described above.

posted @ Sunday, September 09, 2012 8:37 AM by merge

As treasurer of a Georgia condo, I send via email quarterly balance sheets and a statement of expenses v. budget to all homeowners who have provided email addresses for this type of information. The balance sheet shows cash balances in our operating and reserve accounts plus a total amount of accounts receivable from delinquent owners. The expense v. budget statement is provided on a cash basis and on an accrual basis because some homeowners do not understand the accrual method of accounting. Because of privacy issues, I do not circulate a list of delinquent owners or other financials provided to me by our CPA. Our documents only require that financials be provided annually, but by providing quarterly statements, our community is kept informed as to where we stand financially -- they can see for themselves that the Board is operating within budget and that the HOA is setting aside needed funds in reserves for capital improvements.

posted @ Sunday, September 09, 2012 8:53 AM by Condo Treasurer

Our state law requires that an income atatement and balance sheet be provided to all owners within 90 days of the close of a fiscal year. It also requires a budget meeting prior to the start of each fiscal year at which owners approve or reject the proposed budget for the following year. Several years ago the owners asked to receive quarterly income statements and balance sheets and continue to receive them. Delinquent owners are never identified, just a "late fees" line as an accounts receivaqble item.

posted @ Sunday, September 09, 2012 9:03 AM by R

I am the Treasurer of our Home Association in Southern California; members attending our monthly board meeting are entitled to a copy of the last month's meeting minutes and a copy of the past month Financial Statement. In addition, annually a copy of the Yearly Financial Audit by an outside firm is mailed to each condo owner. If an owner wants to see the monthly dues ledger, they are entitled to see only their record and are provided a copy if requested.

posted @ Sunday, September 09, 2012 9:50 AM by Daniel C. Garcia, BFA, CMI, MAM

Owner's right to financial statements on a monthly basis is dependent on state laws and the governing documents for your association. 
The easiest way would be to volunteer for your Board of Directors. 
That said, it really would be dependent on why you wanted to view the finances on a monthly basis. As President of my HOA, I would be willing to sit down, as would our Treasurer, with any owner and allow them to view (no copies to be given out) monthly statements. Unless one is familiar accounting practices for HOAs, the reports could be misleading. Example: insurance premium is paid annually but some reports show an average monthly budget amount or a year to date budget amount, consequently when you look at some reports actual expense for insurance compared to budget can look out of whack. Also, sometimes a budget line item can be too low and actual expenses, again, appear to be out of whack. 
Realtors and potential buyers may like to see financials as well but very few realtors and potential buyers understand HOA financial reporting so it is better to have them view in the presence of the HOA Treasurer or another Director.

posted @ Sunday, September 09, 2012 10:31 AM by Ron

Florida statutes 718 provides that an owner can request copies at the owner's expense through written request or filling out special form from your Assn. Call Florida Condo Ombudsman and they will set you straight 850.488.1122

posted @ Sunday, September 09, 2012 10:58 AM by marjon

Why not anything that an owner wants to see? Of course, Balance Sheet and expense report. What about check registers? What about petty cash receipts and expenses?

posted @ Sunday, September 09, 2012 11:41 AM by Dead Eye Dick

We always receive financial reports at the annual meetings. Those reports can be given at other times if requested. The association president has all the info.All expenses and check registers can be seen if someone wants to see them.

posted @ Sunday, September 09, 2012 11:50 AM by Mari

Florida has one of the strongest state oversights for condominiums. I would start by calling the agency that oversees condominiums. I also would ask if there is a state statute that outlines what financial documents a Board of Managers must keep. In MA it is 183A. This should give you the specifics and then you can go back to the Board for non-compliance.

posted @ Sunday, September 09, 2012 12:00 PM by Bridget

In response to Ron "Volunteer for the board." I am an officer and it is almost imposible to get a copy of anything. We will be discussing possible assessment at our next meeting and having at least a summary of financials would help. Our Prop. Mgt. dictates everything and many do now trust him. He is the only person on checking, he decides all expendures. the board only goes along with whatever is told them. I am an outcast on everything because I have questions. I am told to leave things alone and let prop. mgt do his job. It isn't ours. Our bylaws state certain jobs and duties that we must do, yet we are not doing them..Suggestions, I am new at this.

posted @ Sunday, September 09, 2012 1:02 PM by Ranmark

I take a different approach than from what I have read here. Although your HOA is one legal entity, in essence you are running two different businesses: operating (disbursements for ongoing routine expenses of the HOA such as trash removal, utilities, inspections, etc.) and reserves (expenditures for long lived assets such as exterior painting, replacing the roof, etc.). As such, I provide my HOA with two sets of financial statements, both of which maintained on a cash basis (more on that later), at the end of each quarter. 
The operating statements shows the sources of revenue (HOA fees, late charges collected, and laundry room income) minus the amount transferred to the reserve account per our annual budget. This leaves the cash balance available to pay operating expenses. Next is a breakdown of all of the operating expenses incurred in running the building on a daily basis. The "bottom line" is the increase or decrease in our bank balance during the quarter and year-to-date. Both these results are compared to budget and are followed by a column entitled "actual better/(worse) than budget." 
The reserve account statement starts with the cash balance at the beginning of the period, then adds transfers from the operating account plus interest income. If there have been any disbursements from the reserve account, they are then detailed, with the "bottom line" being the cash balance in the reserve account at the end of the period. 
These two statements are accompanied by a cover letter explaining whether our cash balance is better or worse than budget, and the reason(s) why. I then state the number of owners, if any, that are delinquent and the balance they owe to the HOA - no names are mentioned. Large variances between actual and budgeted expenses are also explained. If there are any projected expenditures that are scheduled in the following three months, they are explained. 
Why do I publish a cash basis set of financial statements? Primarily because I have found that few people understand accrual basis accounting, but "cash in bank" is easy to understand. Also, "cash in bank" agrees with the cash shown in the bank statement reconciliation, so anyone who wants to examine these documents can readily determine that cash on hand is properly stated. 
Another added complexity of accrual basis statements is that actual revenue always equals budgeted revenue. In order to have a complete picture of the HOA's health, there would be the need to include a statement of cash flows to accompany the income statement and the balance sheet, and few people understand the cash flow statement. 
My owner body contains a venture capitalist, a CFO, and two financial analysts, and even they prefer the cash basis presentation over the accrual basis presentation. 
I have found that providing clear financial information and explanations for variances from budget to be a great way to avoid dissension among the owner body. When people understand how their money is being spent, they are far less likely to find reasons to complain.

posted @ Sunday, September 09, 2012 1:53 PM by Larry Davis

Amazing our condo board keeps investing our monies in the stock market gambling our monies. 75%. Until we made a big stink over and over. Now they put it down to 40% in stock. 2 board members agree on this and one board member doesn't. If the market crashes again who will replace all our monies if lost in the stocks? Grounds for a law suit I say!

posted @ Sunday, September 09, 2012 7:13 PM by Sandra

Believe me, if there are any questions as regards how money was spent there should be a clear concise record or people can get pretty nasty. Years ago an owner put a sheet in front of my face and demanded an explanation of monies spent. I was the only one around who could speak Spanish and I sure tried to help him. He went to my husband who also could not explain things to his satisfaction. Finally we sat down with the owner and talked to him and finally he understood. That is an example of what can and does happen on occasion.

posted @ Sunday, September 09, 2012 8:21 PM by Mari

Here in Ohio, it is difficult to find any condo laws. I have lived here with over 100 units for seven years and only one audit was done - and by the mgnt bookkeeper. No one seems to care but me. Does anyobe know the law in Ohio? thanks

posted @ Monday, September 10, 2012 3:21 PM by carol kowal

Our Treasurer is not reporting the cash in or out of our Reseve Funds. We have three reserfe funds;  
1. Operating Reserve  
2.Restricted Pool Replacement Fund  
3. Restriced Boardwalk Replacment Fund  
Our Treasurer is passing out monthly reports showing balances in our bank accounts. he does not give reports showing the cash in and out with details of the source and destination of the cash.  
These reports are passed out each month. Can't tell how we are doing financially in each of the Restricted Reserve Funds or the details of the cash coming and going out of the operating Reserve Fund.  
What do you suggest??  

posted @ Monday, September 10, 2012 11:04 PM by Alan

The president of the HOA refuses to pay his monthly assessments and special assessment he has levied on homeowners. The treasurer also is not paying the special assesstments and neither the janitor who is also contracted for special projects. The janitor/contractor is also a board member. Is this all legal?

posted @ Friday, September 13, 2013 8:51 AM by Jon Lebron

Not paying assessments is called theft and is grounds for immediate removal. Assn has 10 days to provide ALL financial records after receiving request by certified mail. Call Florida Condo Ombudsman office for help.

posted @ Friday, September 13, 2013 11:26 AM by marjon

In a cooperative in Florida we give our financials when ever requested . My problem is I don't want to give out the residents personal names that are in arrears or pay on time . I feel they can have any report they want but do I have to give out the private names of residents? I was told 
I was breaking the law by not giving 
Out the names of all the residents?

posted @ Thursday, July 24, 2014 7:10 PM by Sherri May

Mistakes are sent out on monthly vbudget vs actual and I am being told it is ok to do so. Also, changes are being made after statements are sent out without members knowing. We are being told only yearly statement counts and it is only one that counts,rest are courtesy from hoa 
Is this correct.

posted @ Monday, January 12, 2015 12:05 PM by James mitchell

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