By Eric Glazer, Esq.

Published December 17, 2012


Every once in a while, despite it being a boring topic, we need to discuss portions of the law that if not followed, can get your association in big trouble.  Today is one of those days.  Heading into the final days of the fiscal year for most associations throughout the state is the perfect time to talk about the statutory requirement for both condominiums and homeowner associations to comply with the mandatory year-end financial reporting requirements.


Both statutes state:


Within 90 days after the end of the fiscal year, or annually on a date provided in the bylaws, the association shall prepare and complete, or contract for the preparation and completion of, a financial report for the preceding fiscal year. Within 21 days after the final financial report is completed but not later than 120 days after the end of the fiscal year or date as provided in the bylaws, the association shall mail to each unit owner or hand deliver to each unit owner, a copy of the financial report or a notice that a copy of the financial report will be mailed or hand delivered to the unit owner, without charge, upon receipt of a written request from the unit owner.


In English…most association's fiscal year ends on December 31st.  So, by April 1st the association must have at least contracted for the preparation of the year end financial report.  By May 1st, the association the association can mail the report to all owners or mail them a notice that they can get a free copy of the report by asking for it in writing.


The type of financial report to be prepared by the association varies and depends upon the association's budget.  The higher the amount of the budget, the more detailed the type of financial report to be prepared.  For example:


An association with total annual revenues of $100,000 or more, but less than $200,000, shall prepare compiled financial statements. This is basically a glorified disclaimer by the accounting firm as to the accuracy of the finances as presented to the CPA by management or the Board.


An association with total annual revenues of at least $200,000, but less than $400,000, shall prepare reviewed financial statements.  In a review report, the CPA expresses a “limited assurance” — not an opinion — of the reasonableness of the financial statements.


An association with total annual revenues of $400,000 or more shall prepare AUDITED financial statements. A financial audit provides the highest level of financial statement assurance.  An audit normally takes considerably more time than either a compilation or a review.


An association with total annual revenues of less than $100,000 and An association that operates fewer than 75 units in a condominium and 50 parcels in an H.O.A.  regardless of the association's annual revenues, shall also prepare a report of cash receipts and expenditures.


Suppose a Board wants to prepare a financial report that gives the owners more detail than what they are required to receive?  For example, the Board wants to provide an audit when only a compilation is required.  In a condo - An association may prepare, without a meeting of or approval by the unit owners: a more detailed year end financial report than what is required by law.  In an HOA – 20% of the owners can petition the Board for a greater report, a meeting must then be held within 30 days, and then upon approval of a majority of the voting interests of all parcel members, amend the budget or pass a special assessment to pay for the increased financial report.


Suppose however that the Board wants to provide the owners with a less detailed financial report than the owners are entitled to by law?  For example, the Board doesn't want to spend money on an audit and only wants to provide a compilation?  In a condo and an HOA ------Only If approved by a majority of the voting interests present at a properly called meeting of the association,  an association may prepare a less detailed financial statement than what is required by law.


Bottom line….associations are required to comply with the above.  If they don't, they can incur financial penalties, find themselves sitting at the defense table in either an arbitration proceeding or court proceeding and wind up paying attorney's fees to the complainant.  And yes……that will have to be disclosed in next year's financial report.

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About HOA & Condo Blog

Eric Glazer

Eric Glazer graduated from the University of Miami School of Law in 1992 after receiving a B.A. from NYU. He is currently entering his 20th year as a Florida lawyer practicing

community association law and is the owner of Glazer and Associates, P.A. an eight attorney law firm in Orlando and Hollywood For the past two years Eric has been the host of Condo Craze and HOAs, a weekly one hour radio show on 850 WFTL. 



He is the first attorney in the State of Florida that designed a course that certifies condominium residents as eligible to serve on a condominium Board of Directors and has now certified more than 2,500 Floridians. He is certified as a Circuit Court Mediator by The Florida Supreme Court and has mediated dozens of disputes between associations and unit owners. Finally, he recently argued the Cohn v. Grand Condominium case before The Florida Supreme Court, which is perhaps the single most important association law case decided by the court in a decade. 

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