By Perez Mayoral, P.A., Florida HOA & Condo Association Attorneys
As homeowners in Florida’s many HOA and condominium communities, you may sometimes question whether your association is properly managing its finances. One of the most common questions our clients ask is: “Can I demand an audit of my HOA or condo association?” While Florida law doesn’t explicitly grant individual homeowners the right to unilaterally demand an audit, you do have significant rights to financial transparency and accountability.
Your Right To Financial Information
While you may not be able to individually demand a formal audit, Florida law provides robust mechanisms for homeowners to access and examine financial records:
Statutory Right To Inspect Records
Under Florida Statutes § 720.303(4) for homeowners associations and § 718.111(12) for condominium associations, homeowners have a clear legal right to inspect a wide range of official records, including:
- Financial statements and accounting records
- Bank statements
- Tax returns
- Budgets
- Contracts for expenses
- Meeting minutes where financial decisions were made
- Receipts for all expenses
This right to inspect is powerful and legally enforceable. If your HOA refuses to provide access after a proper written request, they may be liable for statutory damages of $50 per day (up to $500) under Florida Statutes § 720.303(5)(b), plus your attorney’s fees if you must take legal action to enforce your rights as provided in § 720.305(1).
Required Financial Reporting
Under Florida Statutes § 720.303(7) for HOAs and § 718.111(13) for condos, your association must already prepare specific financial reports based on its annual revenue:
- Less than $150,000: Report of cash receipts and expenditures
- $150,000 to $299,999: Compiled financial statements
- $300,000 to $499,999: Reviewed financial statements
- $500,000 or more: Audited financial statements
Additionally, as of July 1, 2024, pursuant to Florida Statutes § 720.3033(5), HOAs with 1,000 parcels or more must prepare audited financial statements regardless of revenue, and this requirement cannot be waived.
Getting A Higher Level Of Financial Scrutiny
If you’re concerned about possible financial mismanagement, you have several effective options:
Collective Action For Enhanced Financial Reporting
While you can’t individually demand an audit, you can work with your neighbors. Under Florida Statutes § 720.303(7)(d) for HOAs and § 718.111(13)(d) for condos, if 20% of the voting interests petition for a higher level of financial reporting (such as moving from compiled to reviewed statements, or from reviewed to audited statements), the board must call a meeting to vote on the matter within 30 days.
If a majority of all voting interests approve, the association must prepare the higher-level financial report—even if it requires a special assessment to cover the cost, as specifically authorized by these statutory provisions.
Professional Assistance: Your Secret Weapon
Perhaps the most powerful tool at your disposal is your right to bring in professional help. Florida Statutes § 720.303(5)(a) for HOAs and § 718.111(12)(c) for condos explicitly allow you to designate an authorized representative to inspect records on your behalf. This means you can hire:
- An attorney with HOA experience
- A Certified Public Accountant
- A forensic accountant
These professionals can examine the records with trained eyes, identifying red flags that might not be obvious to the average homeowner. They can detect patterns of:
- Misappropriation of funds
- Undisclosed conflicts of interest
- Improper bidding processes
- Excessive or unauthorized spending
- Failure to follow proper accounting principles
Digital Access: Coming Soon
Pursuant to Florida Statutes § 720.303(7)(i), by January 1, 2025, HOAs with 100 parcels or more must post certain official records online or make them accessible via mobile device, further enhancing transparency and ease of access to financial information.
How Our Firm Can Help
If you suspect financial impropriety in your HOA or condo association, our firm can:
- Help you properly format your records request to ensure compliance with statutory requirements
- Represent you if your HOA denies or delays access to records
- Provide professional review of financial documents
- Organize collective action among homeowners if a higher level of financial reporting is warranted
- Take legal action if we discover evidence of financial malfeasance
Conclusion
While Florida law doesn’t allow individual homeowners to unilaterally demand an audit, it does provide significant rights to access and examine financial records, collectively petition for higher-level financial reporting, and bring in professional assistance to review documents.
The key is knowing how to exercise these rights effectively. Our experienced Naples, FL HOA lawyer can guide you through the process, helping you uncover and address any financial issues that may be impacting your community and your investment.
If you’re concerned about your HOA’s financial management, contact our office for a consultation to discuss your specific situation and the best approach for addressing your concerns.
Disclaimer: This blog post is for informational purposes only and should not be considered legal advice. For advice about your specific situation, please contact our office for a consultation.
Perez Mayoral, P.A.
999 Ponce De Leon Boulevard, Suite 705
Coral Gables, Florida 33134
Office: 305-928-1077
Email: [email protected]
