Model Financial Disclosure Standard for Community Associations (v0.1)

Model Financial Disclosure Standard for Community Associations

Version: 0.1 (draft — public comment open) Scope: Condominium associations, cooperative corporations, and homeowner associations Status: Under Accountability Council review

Purpose

This standard defines the minimum financial disclosures that a residential community association should make available to its unit owners on an annual basis. It is designed to be adoptable by any state legislature, city council, or board of directors without modification.

Section 1 — Annual Financial Report

Every association shall publish to all unit owners, no later than 120 days after the close of its fiscal year:

1. Income statement — all revenue by source (common charges, assessments, interest, late fees, other)
2. Expense statement — all expenditures by category, with any single vendor receiving more than 5% of total expenses identified by name
3. Balance sheet — assets, liabilities, and fund balances (operating fund, reserve fund, any special-purpose funds)
4. Reserve fund study — current balance, target balance, and projected shortfall or surplus over 10 years
5. Capital expenditure report — all capital spending in the fiscal year, with project description, vendor, contract amount, and board-approval date
6. Related-party disclosure — any transaction between the association and a board member, officer, managing agent, or entity in which any of the foregoing holds a financial interest

Section 2 — Managing-Agent Fee Disclosure

Where a managing agent is engaged, the following shall be disclosed annually:

1. Base management fee
2. All additional fees and charges (transaction fees, capital-project oversight fees, insurance placement commissions, interest on operating accounts)
3. Any rebate, commission, or referral fee received by the managing agent from any vendor providing services to the association
4. Total compensation from the association to the managing agent, inclusive of all fees and indirect compensation

Section 3 — Board Meeting Financial Reporting

At each regular board meeting, the board shall provide:

1. Year-to-date income vs. budget (variance report)
2. Accounts payable aging
3. Delinquency report (number of delinquent units and total outstanding, without identifying individual owners)
4. Reserve fund balance

Section 4 — Access and Format

1. Financial reports shall be delivered electronically to every unit owner of record
2. Reports shall be in a format that permits text search and copying (no image-only PDFs)
3. Reports shall be retained and available to unit owners for a minimum of 7 years
4. Any unit owner may request the underlying ledger detail for any line item; the association shall respond within 30 business days

Commentary

This standard codifies what the best-run associations already do. Its adoption would bring the remaining 80% of associations to a baseline that most owners assume already exists. The standard is deliberately conservative — it does not require an independent audit (though TASFGA recommends one for associations with annual budgets exceeding $500,000) and does not mandate a specific accounting standard (GAAP, modified accrual, or cash basis are all acceptable).

How to comment

Send comments to standards@tasfga.com with “Disclosure Standard v0.1” in the subject line. Comment period closes [TBD].

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Draft standard. Published for public comment. Not yet adopted by the TASFGA Accountability Council.