HOAs must allow members to see financial records

Q: I live in a new community where the developer manages the homeowners’ association (HOA). While we pay monthly HOA dues, we have never seen any financial statements.  Do we as homeowners have the right to see a balance sheet and income statement showing how our HOA assessments are being spent?

A:  If your community was developed in 1999 or later, it likely is governed by the North Carolina Planned Community Act (PCA). The PCA requires HOAs to make annual financial statements available to owners.  The relevant provision of the PCA reads as follows:

The association shall keep financial records sufficiently detailed to enable the association to comply with (the PCA). All financial and other records, including records of meetings of the association and executive board, shall be made reasonably available for examination by any lot owner and the lot owner’s authorized agents as required in the bylaws and Chapter 55A of the General Statutes.

“If the bylaws do not specify particular records to be maintained, the association shall keep accurate records of all cash receipts and expenditures and all assets and liabilities. In addition to any specific information that is required by the bylaws to be assembled and reported to the lot owners at specified times, the association shall make an annual income and expense statement and balance sheet available to all lot owners at no charge and within 75 days after the close of the fiscal year to which the information relates.” (See N.C. Gen. Stat. 47F-3-118).

Note that the law requires HOAs to make the annual financial statements “available” to owners, but does not necessarily require HOAs to “furnish” copies to all owners.  In my opinion, this means providing the statements to owners who ask for them, or posting them on the HOA’s website.

These laws apply to HOAs regardless of whether they are controlled by the developer or by the homeowners.

 

This article was originally published in the Charlotte Observer on June 8, 2013.

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