financial reorts/statements

Started by TomM3 • 10 replies • 1747 views

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TomM3 (Ohio)
Posts: 4

Posted:

I belong to an HOA in Ohio,in fact am the 2nd home in the development. My wife and I have been here 18 months and have yet received a financial report of our funds. Are all HOA's suppose to distribute a quarterly report to its members? If so how do you force the trustees of the HOA to provide one?
Thank you,
Tom M.

Jadedone4 (Virginia)
Posts: 495

Posted:

Tom, am I reading correctly that you are #2 of X homes being built? If that is correct, you may still be under developer/builder control from a board/HOA prespective. I also would suspect that your community, would have a rather small budget at this point, as it is often required that the developer/builder pay the dues on the unsold/built lots/units. Check with your builder/developer they should be a good place to get that information. Also in your governing documents (which copies should have been presented to you when you settled) there should be a section that identifies the frequency of your assessments, audits, and financial reports.

TomM3 (Ohio)
Posts: 4

Posted:

We presently have 32 homes that are occupied. I double checked our "Declaration of Covenants,Conditions,Resrictions,etc" and there is nothing that contains frequency of financial reports/status. It on ly states the monthly fee,maximum percent fee can be raised, and special assessments.We have contacted the builder,who is one of the trustees, and we get no response.

PaulM (Pennsylvania)
Posts: 1,347

Posted:

TomM3: Since you are still under control of the developer and the developer-Board, and the community association has not been 'turned over' as yet to the resident membership, you will no doubt, not be receiving financial statements. The developer (or Prop.Mgr. on his behalf) is collecting the association fee from the current unit owners, and is clearly devoted to selling the remaining units so he can move onto his next bldg. project. However, with payment of your fee, you should also be receiving "services" as noted in your official documents.

Turnover occurs when a percentage of lots (as detailed in the Bylaws) have been sold/settled the developer calls for a turnover date and he then leaves the government, the running of the association to the membership/residents. At this time, the residents should receive a financial statement detailing the developer's handling of income vs. expenses. The Exec. Board is elected from residents and the how-to of governing is to be followed according to the Bylaws. Normally, the Bylaws state an annual financial report is to be presented to residents, and this usually coincides with the annual election.

TomM3 (Ohio)
Posts: 4

Posted:

PaulM.
Thank you for the response. We are 3 months from the date that we will be taking over. Then enters the phase of creating our own HOA.
I have been told we will need legal advice. Do you know what procedures are required??
Hopefully the builder will give us a report when this happens, but his response to the curent owners on this matter and others have been no reply.
Thanks again,
TomM3

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Find an attorney familiar with CONTRACTUAL laws or corporate laws. I wouldn't go with a Real Estate attorney. Depending on your area, it will depend on various attorney experiences with HOA's. There may NOT be a lawyer who "specializes" in HOA law. The attorney's I know don't like doing HOA cases. They either have gotten burned out or don't have the experience. So shop around a bit before settling on one attorney.

Keep in mind that everyone will have to contribute to the legal bill. The cost of which has to be divided evenly amongst all the existing HOA members. Try to setup small meetings amongst the owners to discuss the issues you all want to address. That way you all should have a list to present to the lawyer and the developer to negotiate with. Try to LIMIT the attorney contact as much as possible. They will charge you for that. Mine charged me for a retainer, hourly rate, and each phone or email sent. That didn't include other administrative fees and court costs. Don't lose track of the attorney's charges. It's easily done.

You will find other posts here related to the transition period. Many here have gone through the same thing. Please review other related posts. It will help.

Former HOA President

RogerB (Colorado)
Posts: 5,067

Posted:

Tom, attached the attached document on transitioning from the Developer may be of help. Also attached is a check list of items needed.

📎 Attachments (1):

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📝1729532346971.doc(23 KB)

TomM3 (Ohio)
Posts: 4

Posted:

Thank you, but I cannot open your attachment. Apparently the inner name of your file does not have a .doc extension.I am not a PC pro therefore I don't know what to do to see your attachment.I'll check with my brother-in-law and go from there.

RogerB (Colorado)
Posts: 5,067

Posted:

Quote:

Posted By TomM3 on 07/29/2007 11:38 AM
Thank you, but I cannot open your attachment. Apparently the inner name of your file does not have a .doc extension.I am not a PC pro therefore I don't know what to do to see your attachment.I'll check with my brother-in-law and go from there.

Here it is:
HOA Transition from Developer to Homeowners
by DARCO 6/1/01

The transition from a Developer controlled HOA to homeowners’ control is a critical time for the homeowners. Before the homeowners’ Board of Directors takes final control of the HOA a transition audit is strongly recommended. A transition audit includes a financial audit and a physical audit. Physical items owned by the HOA or for which the HOA has responsibility may include drainage, greenbelts, common areas, private streets, swimming pool, club house, tennis courts, commitments the Developer made prior to getting approval for the development, etc. Hiring an experienced Managing Agent to assist in the transition is recommended. They can provide names of a CPA or accountant and an experienced attorney as needed.

The following documents should be received from the Developer:
1) A roster of the owners (and mortgagees), include addresses and telephone numbers
2) Control of Association's funds
3) Financial Records of Association with an accounting of association funds and financial statements from the date the association commenced receiving funds and ending on the date on which the Declarant control period ends. (A financial audit should be completed immediately.)
4) All of the tangible personal property of the owners and the Association held or controlled by the Declarant (such as deeds to Common Elements)
5) Certificates of occupancy and permits issued for Common Element improvements
6) Plans, specifications, and warranties for improvements in the Common Element
7) Original or certified copy of the recorded Declaration and amendments, Plat Map, Articles of Incorporation and amendments, current By-laws and Rules and Regulations, and Minutes Book
8) Copies of all current insurance policies
9) Employment contracts and service contracts in which the Association is the contracting party
10) All warranties of contractors, subcontractors, suppliers and manufacturers that are in effect
11) Current budgets and prior budgets
12) Federal and State Tax ID numbers
13) Federal and State tax filings for prior years
14) Addresses for changing billing for vendors (trash, utilities, etc.) and contractors.
15) Signature cards for all association bank accounts and any appropriate banking resolutions
16) Copy of architectural standards, if any, and copies of modifications and variances approved
17) Documents which support any special meetings of the association
18) Resignation letters from the Declarant's Officers and members of the Executive Board
19) Evidence of compliance with Fair Housing Act accessibility requirements
20) Non Profit Certificate from the Secretary of State
21) Corporate seal (if any)

DaneC (California)
Posts: 210

Posted:

Ohio Revised Code» TITLE [53] LIII REAL PROPERTY» CHAPTER 5311: CONDOMINIUM PROPERTY
5311.08 Unit owners association.

(C) (1) The unit owners association shall be established not later than the date that the deed or other evidence of ownership is filed for record following the first sale of a condominium ownership interest in a condominium development. Membership in the unit owners association shall be limited to unit owners, and all unit owners shall be members. Until the unit owners association is established, the developer shall act in all instances in which action of the unit owners association or its officers is authorized or required by law or the declaration.

(2)(a) Not later than sixty days after the developer has sold and conveyed condominium ownership interests appertaining to twenty-five per cent of the undivided interests in the common elements in a condominium development, the unit owners association shall meet, and the unit owners other than the developer shall elect not less than one-third of the members of the board of directors.

(b) When computing undivided interests in expandable condominium properties for purposes of divisions (C) and (D) of this section, the undivided interests in common elements shall be computed by comparing the number of units sold and conveyed to the maximum number of units that may be created, as stated in the declaration pursuant to division (C)(8) of section 5311.05 of the Revised Code.

(D)(1) Except as provided in division (C) of this section, the declaration or bylaws of a condominium development may authorize the developer or persons the developer designates to appoint and remove members of the board of directors of the unit owners association and to exercise the powers and responsibilities otherwise assigned by law, the declaration, or the bylaws to the unit owners association or to the board of directors. The authorization for developer control may extend from the date the unit owners association is established until sixty days after the sale and conveyance to purchasers in good faith for value of condominium ownership interests to which seventy-five per cent of the undivided interests in the common elements appertain, except that in no case may the authorization extend for more than five years after the unit owners association is established if the declaration includes expandable condominium property or more than three years after the unit owners association is established if the declaration does not include expandable condominium property.

(2) If there is a unit owner other than the developer, the declaration of a condominium development shall not be amended to increase the scope or the period of the developer’s control.

(3) Within sixty days after the expiration of the period during which the developer has control pursuant to division (D)(1) of this section, the unit owners association shall meet and elect all members of the board of directors of the association. The persons elected shall take office at the end of the meeting during which they are elected and shall, as soon as reasonably possible, appoint officers.

(E) The board of directors, or the developer while in control of the association, may take any measures necessary to incorporate the unit owners association as a not-for-profit corporation.

DaneC (California)
Posts: 210

Posted:

Ohio Revised Code» TITLE [53] LIII REAL PROPERTY» CHAPTER 5311: CONDOMINIUM PROPERTY
5311.09 Unit owners association records.

(B) (1) When elected members of a board of directors of a unit owners association take control of the association, the declarant or developer shall deliver to the board correct and complete copies of all of the following:

(a) The books, records, and minutes referred to in division (A) of this section;

(b) The declaration, the bylaws, the drawings prepared pursuant to section 5311.07 of the Revised Code, as recorded, and any articles of incorporation of the unit owners association, as recorded;

(c) Except in the case of a conversion condominium, documents, information, and sources of information concerning the location of underground utility lines, and plans and specifications that are not proprietary or copyrighted, of the buildings, other improvements, and structures of the condominium property that are reasonably available to the developer, but only in connection with condominium developments declared on or after the effective date of this amendment and condominium developments that are declared prior to that date but originally built or constructed on or after that date.

(2) The board of directors may commence a civil action on behalf of the unit owners association in the court of common pleas of the county in which the condominium property is located to obtain injunctive relief or recover damages for harm resulting from the declarant’s or developer’s failure to comply with division (B)(1) of this section.

Effective Date: 07-20-2004

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