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5 Ways to Build Transparency as Condo Laws Tighten Financial Disclosure Requirements

In early July as per Miami Herald, Florida Governor Rick Scott signed new updates to the condo laws.  One important focus is on financial statement disclosure.  From this point forward, Condo associations overseeing 150 or more units will be required make financial reports accessible to unit owners on a password protected website.

Transparency in operations is key for a condominium association to build trust and ensure accountability among community management.   Are annual fees utilized appropriately?  Are assessment charges reasonable?  Making your residents fully aware of the association’s expense management and financial health is essential.

Given the need for increased transparency, lessened misappropriations in funding, and enhanced public appeal, many more states are likely to follow suit.  In light of the condo reform laws in Florida, we highlight five ways your association can build operational and financial transparency.

  1. Craft an easily understandable CC&R/Governing Docs

    Every COA is required to create a CC&R, or a Covenants, Conditions & Restrictions document and/or governing documents that condo owners must sign at the closing.  A CC&R highlights community rules that residents must abide by.  If crafted well with simple language, residents can easily understand association expectations and how it aligns to overall operations.  If you already have an existing CC&R, re-evaluate the content for ease in understanding.  Governing documents should also include how the association plans to share financial information with unit owners.  Be aware that many older association documentation may not accommodate more modern technological methods of conveying this information.  Review your CC&R to make sure it meets your current community’s requirements and the law.

  2. Encourage owners to attend and participate in board meetings

    To keep unit owners informed of pertinent issues impacting the association such as annual budgeting and development projects, encourage them to attend and participate in association meetings.  Creating an open-dialogue ensures that their voice is heard and taken seriously.  Provide owners with a meeting agenda well in advance so they can know about issues ahead of the meeting.  Also, provide them with a best practices guide on how to effectively discuss and vote on issues.  Another way to encourage residents to attend the board meeting is by using a community-specialized communication software to send them notices of the upcoming events.

  3. Be open to sharing financial information

    To build trust with owners, be open about the financial health of the association when they ask.  The types of financial information required for resident disclosure vary on state laws and governing documents.  Usually, some financial disclosure is required even at a broad, summary-level.  Visit your state’s legislation website to identify any recent updates to condo laws.  

  4. Create a community website

    The best way to communicate important information about your community to residents and the public is through a website.  The website should include community contact information, office hours & location, board member information, common amenities, and latest news.  Gated content for residents, board members, and managers only should include meeting minutes, association meeting calendar, and financial reports.

  5. Implement a knowledge base

    Create an easily searchable knowledge base on frequently asked questions that owners and board members will want answers to.  Answer questions about maintenance, board members and meetings, and company financials.  Take a look at our Best Practices Guide for creating a knowledge base and the Top 50 Questions your association should answer.

Communicating relevant information to owners, board members, managers, and the public in a timely manner is of utmost priority.  By doing this, your management exercises transparency, reduces the chances of litigation, keeps current residents informed and happy, and enhances community appeal to the public.

Pilera Software, LLC is a comprehensive property management suite that helps property and community managers automate communications, streamline maintenance and rule violations, and manage activities.  Our offerings also include a knowledge base, document library, online forms, and community and company websites.