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BackerReport |  |
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BackerReport is a periodical addressing topics of interest to community associations in South Florida and is provided as a service to the clients and friends of Backer Law Firm, P.A. All articles are written by attorneys of Backer Law Firm, P.A. and are protected by copyright.
In the Spring of 2004, the Florida Legislature wrestled with many proposed changes to not only the Condominium Act, but with proposed changes to the statutes governing Florida homeowners associations. Many different competing interests had their voices heard by the legislature and, in the end, the legislature gave everyone a little bit of what they wanted. The legislation took effect October 1, 2004. Over the course of the next few issues of BackerReport, we will summarize the highlights of the new legislation. This is the tenth in a series
Under the new amendments to the Homeowners Association statutes, Florida accountants can be assured of having very busy practices. Homeowners associations have always had an obligation to provide an annual financial report to the members at the close of the association's fiscal year. The law did not, however, specify the type of financial reporting required. The legislature has amended Section 720.303 (7) to describe specific reporting methodologies for various associations. An association with total annual revenues of $100,000.00 or more, but less than $200,000.00 is required to prepare compiled financial statements. An association with total annual revenues of at least $200,000.00 but less than $400,000.00 is required to prepare reviewed financial statements. Those associations with total annual revenues of $400,000.00 or more are required to prepare audited financial statements. Those associations with total annual revenues of less than $100,000.00 are only required to prepare a report of cash receipts and expenditures. If an association had fewer than 50 member parcels, irrespective of the association's annual revenues, the association may prepare a report of cash receipts and expenditures in lieu of financial statements required by the statute unless the governing documents of the community provide otherwise. The new statute also provides for the ability of 20% of the parcel owners to petition the board for a level of financial reporting higher than that which is required by the statute. If the appropriate number of parcel owners petition the board for a higher level of financial reporting than required by the statute, the association is required to notice and hold a meeting of the members within thirty days of receipt of the petition for the purpose of voting on raising the level of reporting for that fiscal year. Upon approval of a majority of the total voting interests of the parcel owners, the association is required to prepare or cause to be prepared the financial report voted on by the members. The association's budget is required to be amended or a special assessment adopted to pay for the higher financial reporting. |
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