Condo Line

Every year, board shirks an audit

 

CAMquestion@cfl.rr.com

Q. Every year the board meets with the owners and recommends to them that no audit be taken on the condominium books, in order to save money. Is there a state law that the board must have the books audited periodically? I have another concern in that our directors have little business experience making good decisions for the association.

E.K., St. Petersburg

The condominium act does require end-of-year reports by a third party to include audits. What the board is forgetting is that the funds are the members’ money and not the board’s. It has a fiduciary duty to the members to protect their money. Nowhere in the statutes does it say that the board is to save expenses or money. To the contrary, it must collect and record the income and spend funds in an appropriate manner to maintain the association. Members should not allow the board to do in-the-house accounting to save money. It is called a cost of doing business to have an audit and is a protection for board members to prove that they are good shepherds to protect the association’s assets.

Q. Our condominium documents require making the budget for a calendar year from Jan. 1 to Dec. 31. There has been some recent discussion of changing the fiscal year from Oct. 1 to Sept. 30. Would we be in violation with the state if we did not have an approved operating budget in place for Jan. 1?

S.S., Tampa

Apparently the board and maybe the CPA/accountant feel the need to change the date of the budget. You need to find out if the rumor is correct and if true, then why the proposed change. You can do this by writing a letter to the board. Since the association is a business and should be operated as such, it has a right to change the accounting dates. It should require an amendment to the documents. While this is a simple change, you attorney and your CPA should be involved. It would not eliminate the creation and approval of an annual budget, financial reports or tax filings. If the change is made, your fees would be due every October.

Q. We live in a condominium that operates under the Housing for Older Persons under the Fair Housing Amendments. One unit has only 600 square feet and a married couple with their emancipated adult child live in this one-bedroom unit. Who or what regulates the number of occupants allowed per unit?

While some documents have occupancy limits, usually those fall under county or city codes. Most times these codes are very liberal. In addition, judges can rule to allow several occupants in a very small unit. I suggest that you leave the problem alone. If you press the issue, chances are that the couple would not be forced to move by a judge’s ruling or you may find that the judge would allow more occupants.

Write to Condo Line, Richard White, 6039 Cypress Gardens Blvd., #201, Winter Haven, FL 33884-4115, or e-mail CAMquestion@cfl.rr.com. Include name and city.

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