The most important aspect of this bill is that the year-end financial reporting exemption for associations that operate fewer than 50 units or parcels (small hoa’s or condos) are eliminated. Previous to the enactment of this law, these type of smaller associations were not required to prepare a year-end annual financial report based on revenues, but rather, could prepare a report of cash receipts and expenditures. That exemption is now GONE.
Now, all associations must prepare a financial report based on annual revenues, regardless of the number of units or parcels. As a reminder, the following thresholds are contained in the law:
- An association with total annual revenues of $150,000 or more, but less than $300,000, must prepare compiled financial statements.
- An association with total annual revenues of at least $300,000, but less than $500,000, must prepare reviewed financial statements.
- An association with total annual revenues of $500,000 or more shall prepare audited financial statements.
- An association with total annual revenues of less than $150,000 is only required to prepare a report of cash receipts and expenditures.Further, for condominium and cooperative associations, HB 6027 also deleted the limitation on the number of times an association can waive its financial reporting requirements.Previously, condominium and cooperative associations could not waive the statutorily required financial reports for more than three consecutive years. This provision has now been deleted, although there is a bit of a glitch in the statutes since HB 6027 removed the provision, while HB 1237, which also amended these sections, left them intact. It remains to be seen how the official version of the Florida Statutes, which is due to be released in the next couple of months, will address this conflict.