A Change to the Financial Reporting Requirements

Lost in all of the controversy surrounding the recent amendments to Florida's laws governing community associations--and, in particular, the changes to condominium association laws enacted by House Bill 1237--were revisions to the financial reporting requirements for condominium and cooperative associations.

House Bill 6027 became effective on July 1 and amends provisions of Chapters 718 and 719 of the Florida Statutes.   House Bill 6027 is a "two edged sword":

  • On one hand, it removes the "fewer than 50 units" exception that allowed community associations to simply prepare a report of cash receipts and expenditures instead of either compiled, reviewed or audited financial statements regardless of the association's annual revenue.  House Bill 6027 also removes this exception from F.S. Section 720.303, which governs financial reporting for mandatory homeowners associations.
  • On the other hand, condominium and cooperative associations are no longer prohibited from waiving the statutorily provided financial reporting requirements for more than 3 consecutive years.   This prohibition against associations waiving these reporting requirements more than 3 years in a row was a fairly recent addition to Florida statutes.  House Bill 6027 effectively "turns back the clock" and allows associations to waive those financial reporting requirements on an annual basis for as long as the association's members see fit.

At least in regards to these financial reporting requirements, "what the legislature giveth, the legislature taketh away".

I hope all of you had a safe and restful 4th of July and that we'll have another uneventful hurricane season.

 

ROCs and the Komen/Planned Parenthood Controversy

Followers of this blog know that I frequently caution that almost all board meetings in resident owned communities must be properly noticed and open to association members.  There are specific provisions prohibiting board members from meeting "behind closed doors" in the statutes governing condominium associations, cooperative associations, and mandatory homeowners associations.

While it's clear that these statutory provisions focus on ensuring that association members are provided with adequate notice of matters that are to be considered by the board of directors, there's another very important consideration that can be illustrated by the recent difficulties faced by Susan G. Komen  For the Cure after its decision to no longer offer grants to Planned Parenthood for mammograms was made public.

From what I've read about the initial decision, there was little if any input requested from or given by  the many local organizations that help fund. Komen .  In fact, it appears that some of Komen's board members were unaware of the decision--which had been made in the latter part of 2011

As everyone knows, once Komen's decision became public, a firestorm of negative publicity erupted--and even though Komen apparently reversed its decision shortly after the media picked up on the story, I have to believe that most of us will no longer view Komen in quite the same way as we did before all of this occurred.

My assumption is that no law prevented Komen's leadership from meeting "behind closed doors" when it concluded that the grants to Planned Parenthood be discontinued.   When a board is allowed to isolate itself from its members it's all too easy--and unfortunately all too common--to make decisions in a vacuum that prevents any factors or considerations other than those of the board members from being heard..  If one or two of those board members are particularly overbearing, it's not too much of a stretch to see how a ROC board could find itself regretting a decision made "behind closed doors" once that decision is made public and legitimate concerns of the members are finally heard.

This is a very important "side effect"  of the laws requiring open board meetings and member input at those meetings--no "vacuum" can exist if those laws are followed.   Every resident owned community benefits when decisions are made only after the members have been given the opportunity to have their say.  

I wonder if Komen's leadership wishes it had given its supporters that opportunity before making its initial decision on the grants to Planned Parenthood