Bill Text: FL S1746 | 2013 | Regular Session | Introduced
Bill Title: Community Associations
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2013-05-03 - Died in Regulated Industries, companion bill(s) passed, see CS/CS/CS/HB 73 (Ch. 2013-188) [S1746 Detail]
Download: Florida-2013-S1746-Introduced.html
Florida Senate - 2013 SB 1746 By Senator Braynon 36-01161-13 20131746__ 1 A bill to be entitled 2 An act relating to community associations; amending s. 3 718.111, F.S.; revising requirements relating to the 4 preparation and completion of the homeowners’ 5 association’s annual financial report; revising the 6 requirements for a financial report based on the 7 association’s number of units; revising the 8 requirements for a financial report based on the 9 amount of a condominium’s revenues; amending s. 10 719.104, F.S.; revising requirements with respect to 11 cooperative financial statements and reports; revising 12 application; amending s. 720.303, F.S.; revising 13 requirements relating to the preparation and 14 completion of the condominium association’s annual 15 financial report; revising the requirements for a 16 financial report based on the community’s size; 17 providing an effective date. 18 19 Be It Enacted by the Legislature of the State of Florida: 20 21 Section 1. Subsection (13) of section 718.111, Florida 22 Statutes, is amended to read: 23 718.111 The association.— 24 (13) FINANCIAL REPORTING.—Within 90 days after the end of 25 the fiscal year, or annually on a date provided in the bylaws, 26 the association shall prepare and complete, or contract for the 27 preparation and completion of, a financial report for the 28 preceding fiscal year. Within 21 days after the final financial 29 report is completed by the association or received from the 30 third party, but not later than 120 days after the end of the 31 fiscal year or other date as provided in the bylaws, the 32 association shall mail to each unit owner at the address last 33 furnished to the association by the unit owner, or hand deliver 34 to each unit owner, a copy of the financial report or a notice 35 that a copy of the financial report will be mailed or hand 36 delivered to the unit owner, without charge, upon receipt of a 37 written request from the unit owner. The division shall adopt 38 rules setting forth uniform accounting principles and standards 39 to be used by all associations and addressing the financial 40 reporting requirements for multicondominium associations. The 41 rules must include, but not be limited to, standards for 42 presenting a summary of association reserves, including a good 43 faith estimate disclosing the annual amount of reserve funds 44 that would be necessary for the association to fully fund 45 reserves for each reserve item based on the straight-line 46 accounting method. This disclosure is not applicable to reserves 47 funded via the pooling method. In adopting such rules, the 48 division shall consider the number of members and annual 49 revenues of an association. Financial reports shall be prepared 50 as follows: 51 (a) An association that meets the criteria of this 52 paragraph shall prepare a complete set of financial statements 53 in accordance with generally accepted accounting principles. The 54 financial statements must be based upon the association’s total 55 annual revenues, as follows: 56 1. An association with total annual revenues of $125,000 57$100,000or more, but less than $200,000, shall prepare compiled 58 financial statements. 59 2. An association with total annual revenues of at least 60 $250,000$200,000, but less than $400,000, shall prepare 61 reviewed financial statements. 62 3. An association with total annual revenues of $500,000 63$400,000or more shall prepare audited financial statements. 64 4.(b)1.An association with total annual revenues of less 65 than $125,000$100,000shall prepare a report of cash receipts 66 and expenditures. 67 5.2.An association that operates fewer than 5075units, 68 regardless of the association’s annual revenues, shall prepare a 69 report of cash receipts and expenditures in lieu of financial 70 statements required by this paragraph(a). 71 6.3.A report of cash receipts and disbursements must 72 disclose the amount of receipts by accounts and receipt 73 classifications and the amount of expenses by accounts and 74 expense classifications, including, but not limited to, the 75 following, as applicable: costs for security, professional and 76 management fees and expenses, taxes, costs for recreation 77 facilities, expenses for refuse collection and utility services, 78 expenses for lawn care, costs for building maintenance and 79 repair, insurance costs, administration and salary expenses, and 80 reserves accumulated and expended for capital expenditures, 81 deferred maintenance, and any other category for which the 82 association maintains reserves. 83 (b)(c)An association may prepare, without a meeting of or 84 approval by the unit owners: 85 1. Compiled, reviewed, or audited financial statements, if 86 the association is required to prepare a report of cash receipts 87 and expenditures; 88 2. Reviewed or audited financial statements, if the 89 association is required to prepare compiled financial 90 statements; or 91 3. Audited financial statements if the association is 92 required to prepare reviewed financial statements. 93 (c)(d)If approved by a majority of the voting interests 94 present at a properly called meeting of the association, an 95 association may prepare: 96 1. A report of cash receipts and expenditures in lieu of a 97 compiled, reviewed, or audited financial statement; 98 2. A report of cash receipts and expenditures or a compiled 99 financial statement in lieu of a reviewed or audited financial 100 statement; or 101 3. A report of cash receipts and expenditures, a compiled 102 financial statement, or a reviewed financial statement in lieu 103 of an audited financial statement. 104 105 Such meeting and approval must occur before the end of the 106 fiscal year and is effective only for the fiscal year in which 107 the vote is taken, except that the approval may also be 108 effective for the following fiscal year. With respect to an 109 association to which the developer has not turned over control 110 of the association, all unit owners, including the developer, 111 may vote on issues related to the preparation of financial 112 reports for the first 2 fiscal years of the association’s 113 operation, beginning with the fiscal year in which the 114 declaration is recorded. Thereafter, all unit owners except the 115 developer may vote on such issues until control is turned over 116 to the association by the developer. Any audit or review 117 prepared under this section shall be paid for by the developer 118 if done before turnover of control of the association. An 119 association may not waive the financial reporting requirements 120 of this section for more than 3 consecutive years. 121 Section 2. Subsection (4) of section 719.104, Florida 122 Statutes, is amended to read: 123 719.104 Cooperatives; access to units; records; financial 124 reports; assessments; purchase of leases.— 125 (4) FINANCIAL REPORT.— 126 (a) Within 9060days afterfollowingthe end of the fiscal 127 or calendar year or annually on such date as is otherwise 128 provided in the bylaws of the association, the board of 129 administration of the association shall mail or furnish by 130 personal delivery to each unit owner a complete financial report 131 of actual receipts and expenditures for the previous 12 months, 132 or a complete set of financial statements for the preceding 133 fiscal year prepared in accordance with generally accepted 134 accounting procedures. The report shall show the amounts of 135 receipts by accounts and receipt classifications and shall show 136 the amounts of expenses by accounts and expense classifications 137 including, if applicable, but not limited to, the following: 138 1. Costs for security; 139 2. Professional and management fees and expenses; 140 3. Taxes; 141 4. Costs for recreation facilities; 142 5. Expenses for refuse collection and utility services; 143 6. Expenses for lawn care; 144 7. Costs for building maintenance and repair; 145 8. Insurance costs; 146 9. Administrative and salary expenses; and 147 10. Reserves for capital expenditures, deferred 148 maintenance, and any other category for which the association 149 maintains a reserve account or accounts. 150 (b) The division shall adopt rules that may require that 151 the association deliver to the unit owners, in lieu of the 152 financial report required by this section, a complete set of 153 financial statements for the preceding fiscal year. The 154 financial statements shall be delivered within 90 days following 155 the end of the previous fiscal year or annually on such other 156 date as provided in the bylaws. The rules of the division may 157 require that the financial statements be compiled, reviewed, or 158 audited, and the rules shall take into consideration the 159 criteria set forth in s. 719.501(1)(j). The requirement to have 160 the financial statements compiled, reviewed, or audited does not 161 apply to associations if a majority of the voting interests of 162 the association present at a duly called meeting of the 163 association have determined for a fiscal year to waive this 164 requirement. In an association in which turnover of control by 165 the developer has not occurred, the developer may vote to waive 166 the audit requirement for the first 2 years of the operation of 167 the association, after which time waiver of an applicable audit 168 requirement shall be by a majority of voting interests other 169 than the developer. The meeting shall be held prior to the end 170 of the fiscal year, and the waiver shall be effective for only 171 one fiscal year.This subsection does not apply to a cooperative172that consists of 50 or fewer units.173 Section 3. Subsection (7) of section 720.303, Florida 174 Statutes, is amended to read: 175 720.303 Association powers and duties; meetings of board; 176 official records; budgets; financial reporting; association 177 funds; recalls.— 178 (7) FINANCIAL REPORTING.—Within 90 days after the end of 179 the fiscal year, or annually on the date provided in the bylaws, 180 the association shall prepare and complete, or contract with a 181 third party for the preparation and completion of, a financial 182 report for the preceding fiscal year. Within 21 days after the 183 final financial report is completed by the association or 184 received from the third party, but not later than 120 days after 185 the end of the fiscal year or other date as provided in the 186 bylaws, the association shall, within the time limits set forth 187 in subsection (5), provide each member with a copy of the annual 188 financial report or a written notice that a copy of the 189 financial report is available upon request at no charge to the 190 member. Financial reports shall be prepared as follows: 191 (a) An association that meets the criteria of this 192 paragraph shall prepare or cause to be prepared a complete set 193 of financial statements in accordance with generally accepted 194 accounting principles as adopted by the Board of Accountancy. 195 The financial statements shall be based upon the association’s 196 total annual revenues, as follows: 197 1. An association with total annual revenues of $100,000 or 198 more, but less than $200,000, shall prepare compiled financial 199 statements. 200 2. An association with total annual revenues of at least 201 $200,000, but less than $400,000, shall prepare reviewed 202 financial statements. 203 3. An association with total annual revenues of $400,000 or 204 more shall prepare audited financial statements. 205 4.(b)1.An association with total annual revenues of less 206 than $100,000 shall prepare a report of cash receipts and 207 expenditures. 2082. An association in a community of fewer than 50 parcels,209regardless of the association’s annual revenues, may prepare a210report of cash receipts and expenditures in lieu of financial211statements required by paragraph (a) unless the governing212documents provide otherwise.213 5.3.A report of cash receipts and disbursement must 214 disclose the amount of receipts by accounts and receipt 215 classifications and the amount of expenses by accounts and 216 expense classifications, including, but not limited to, the 217 following, as applicable: costs for security, professional, and 218 management fees and expenses; taxes; costs for recreation 219 facilities; expenses for refuse collection and utility services; 220 expenses for lawn care; costs for building maintenance and 221 repair; insurance costs; administration and salary expenses; and 222 reserves if maintained by the association. 223 (b)(c)If 20 percent of the parcel owners petition the 224 board for a level of financial reporting higher than that 225 required by this section, the association shall duly notice and 226 hold a meeting of members within 30 days of receipt of the 227 petition for the purpose of voting on raising the level of 228 reporting for that fiscal year. Upon approval of a majority of 229 the total voting interests of the parcel owners, the association 230 shall prepare or cause to be prepared, shall amend the budget or 231 adopt a special assessment to pay for the financial report 232 regardless of any provision to the contrary in the governing 233 documents, and shall provide within 90 days of the meeting or 234 the end of the fiscal year, whichever occurs later: 235 1. Compiled, reviewed, or audited financial statements, if 236 the association is otherwise required to prepare a report of 237 cash receipts and expenditures; 238 2. Reviewed or audited financial statements, if the 239 association is otherwise required to prepare compiled financial 240 statements; or 241 3. Audited financial statements if the association is 242 otherwise required to prepare reviewed financial statements. 243 (c)(d)If approved by a majority of the voting interests 244 present at a properly called meeting of the association, an 245 association may prepare or cause to be prepared: 246 1. A report of cash receipts and expenditures in lieu of a 247 compiled, reviewed, or audited financial statement; 248 2. A report of cash receipts and expenditures or a compiled 249 financial statement in lieu of a reviewed or audited financial 250 statement; or 251 3. A report of cash receipts and expenditures, a compiled 252 financial statement, or a reviewed financial statement in lieu 253 of an audited financial statement. 254 Section 4. This act shall take effect July 1, 2013.