How often do HOAs need to provide financial reports that include a balance sheet, receipts for work contacted and bank statements to the contributing members?
IC 32-25.5-3(g) provides that an association must provide the following to its members, upon request:
(g) Subject to subsection (k):
(1) the financial records, including all contracts, invoices, bills, receipts, and bank records, of a homeowners association must be available for inspection by each member of the homeowners association upon written request; and
(2) the minutes of meetings of the homeowners association board, including the annual meeting, must be available to a member of the homeowners association for inspection upon the homeowners association member’s request, which may be submitted:
(A) in person;
(B) in writing; or
(C) by electronic mail.
In addition to the right to inspect the meeting minutes of the homeowners association board, a member of a homeowners association has the right to attend any meeting of the homeowners association board, including an annual meeting of the board. However, the board of directors may meet in private to discuss delinquent assessments. The board of directors may also meet in private with legal counsel to discuss the initiation of litigation, or to discuss litigation that either is pending or has been threatened specifically in writing. As used in this subsection, “litigation” includes any judicial action or administrative law proceeding under state or federal law.
A written request for inspection must identify with reasonable particularity the information being requested. A member’s ability to inspect records under this section shall not be unreasonably denied or conditioned upon provision of an appropriate purpose for the request. The homeowners association may charge a reasonable fee for the copying of a record requested under this subsection if the homeowners association member requests a written copy of the record.
Subsection (k), which provides the exceptions, states:
(k) A homeowners association is not required to make available to a member for inspection any of the following:
(1) Unexecuted contracts.
(2) Records regarding contract negotiations.
(3) Information regarding an individual member’s association account to a person who is not a named party on the account.
(4) Any information that is prohibited from release under state or federal law.
(5) Any records that were created more than two (2) years before the request.
(6) Information that:
(A) is provided by a member of the homeowners association about another member of the homeowners association; and
(B) concerns suspected criminal activity involving the other member.
Except as otherwise provided in this article (including subsection (j) and this subsection), other applicable law, or the governing documents of the homeowners association, a homeowners association is not required to retain a record of a written or electronic communication for any specific period of time. However, a homeowners association or a member of the board of a homeowners association shall retain for at least two (2) years after receipt, and during that period shall make available to a member of the homeowners association at the member’s request, any written or electronic communication received by the homeowners association or board member that relates to a financial transaction of the homeowners association and that is not otherwise excepted from disclosure under this article or other applicable law.
Thrasher Buschmann & Voelkel PC
151 N. Delaware St.
Indianapolis IN 46204-2505
Most often, HOAs provide annual audits to their members, and monthly financials only to their Boards. The reason for not reporting more often to the membership is that the monthly financials are not audited documents and the annual audit may reveal that changes or adjustments need to be made. For that reason, the release of unaudited records may not be accurate, and may even be misleading.Robert Griffin, Esq.Griffin Alexander PC415 Route 102nd FloorRandolph NJ email@example.comTel:973- 366-1188Fax:973-366-4848The only requirement in Pennsylvania law is to provide certain financial information with the Public Offering Statement and for the Association’s Annual Meeting. Normally the latter is limited to a summary income and expense statement along with the proposed budget for the next year. There is also no Pennsylvania statutory requirement that receipts or bank statements be provided, only that financial information (which is not defined) be open for inspection to members upon request. The foregoing might change if there is something to the contrary in the Association’s Governing Documents.
Sara A. Austin
Austin Law Firm LLC
226 E. Market St.
York, PA 17403