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Condo owners should review financial statements

Q: I have a condominium in Florida. We have owned the unit for 23 years. Over the years, we have had some heavy assessments. Recently, we found there was money hidden in bank accounts and money market funds since 2002. The sum was over $200,000, and none of the owners knew about the money. We only found the money when one owner took time to read the end-of-year financial report. It seems none of the new board knew that this money was there. I asked for the end-of-year statement from the management company and the figures are in the report for all to see.

The director was unaware of the funds. It appears that no one on the board read the end-of-year statement. So the question is, does the board have the right to conceal these funds and not disclose them to the owners? As owners, we only see the budget for the up and coming year and on that statement nothing is mentioned about these monies. Is the board guilty of improper actions?

A: What you have is a common event in condominiums, financial statements with unaccounted funds or expenses. My guess is that less than 10 percent of the owners know how to read a financial statement. Your directors are part of this group and are volunteers. Chances are good that no one on the board knows how to read financial statements. Is this a problem? Not really, if the board has professionals available to provide help, answer questions, and make suggestions.

Your question is extremely important in that they point out one major problem in associations, most members do not concern themselves with the business of the association. They let others do the work with no oversight. All members have a responsibility to observe and evaluate the business decisions of the association. Members are responsible to attend meetings, follow the decisions of the board and read the financial statements. If it was found in the end-of-year statement, then the oversight was the members' neglect as well as the board.

Conviction could hamper purchase

Q: I am considering buying a condominium in a 55-plus association. Will my having a previous felony conviction prevent me from being able to buy a unit? Who makes these decisions and what are the parameters as to what previous legal problems are forgiven and which are not? Do I have any legal recourse if I am refused?

A: Your first step is to seek legal advice. Many associations have screening committees that review both rentals and new purchases. Some have very strict screening policies. Some will accept new residents if they have only one conviction and have several years of clean living. If otherwise, or a sexual offender, I have no suggestion to help as that record will remain as a black mark. One thing I recommend is not to lie or present false information. Engage a real estate agent to help and have the agent contact the board or screening committee and get their feeling on your conviction. You may want to talk to an attorney to see if you can have your record expunged.

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leg.state.fl.us

Condo owners should review financial statements 03/02/13 [Last modified: Thursday, February 28, 2013 5:23pm]

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