AZ Audit and Tax Requirements

Our association is an older 11- unit townhome development converted to condos several years ago. The former owner had been managing the HOA but passed away and the family was apparently unable to locate any records. Our newly-elected board is inexperienced and now faced with the daunting task of organizing what little financial information is available in order to file tax returns, develop a budget and comply with the bylaws requirement for a yearly audit by a public accountant. Three units are not paying monthly assessments (foreclosure and recently purchased units) and there is no reserve fund so we can barely afford pool maintenance, security gate repairs, utilities and insurance. We were hoping for some recommendations for the most cost effective way to comply with AZ state laws and our bylaws when it comes to the audit and tax filing. Also any help pertaining to the Registered Agent requirement, budget development and collection of delinquent monthly assessments would be appreciated.

A couple of other thoughts:

If your HOA is in Maricopa County you can view recorded documents on line at http://recorder.maricopa.gov/recdocdata/
Their records go back to 1871. Locate the CC&R's for your development. They may be titled something like Declaration of Horizontal Regime. What is recorded should match the copies of the Declaration you should have received when you purchased.

Go to the corporation commission website and search for your HOA by name. The association must file an annual report on the form provided by the commission. If the forms are not filed for three years the commission will dissolve the association. Be sure that your reports are current. You can download the report form online. You can also see the reports back to about 2000. You want to be sure that your association is incorporated as a non-profit homeowners association.

You can also view all Arizona statutes online at http://www.azleg.gov/ArizonaRevisedStatutes.asp

Of particular interest to you will be ARS 33-1801 through 1816 as this governs HOA's specifically. You should also familiarize yourself with ARS 10-3101 et seq., also known as the Arizona nonprofit corporation act.