MIAMI – Question: What are the requirements for preparing financial reports for a condominium association? What type of report is required? Do we need to hire a CPA firm to prepare the financials, or can we prepare the reports ourselves? – G.D., Miami

Answer: The annual financial report requirements for condominium associations are outlined in Section 718.111(13), Florida statutes. The statute requires that within 90 days after the end of the fiscal year, or annually on a date if provided in the bylaws, the association shall prepare and complete, or contract for the preparation and completion of, a financial report for the preceding fiscal year.

Further, the statute requires that within 21 days after the financial report is completed, and no later than 120 days from the end of the fiscal year, the association must mail or hand deliver to each unit owner a copy of the financial report or a notice that a copy of the financial report will be mailed or hand delivered to the unit owner, without charge, within five business days after receipt of a written request from the unit owner.

With regard to the type of report required, that depends on the annual revenue of your condominium association. Pursuant to the statute, an association with total annual revenues of less than $150,000 shall prepare a report of cash receipts and expenditures.

An association with total annual revenues between $150,000 and $300,000, shall prepare compiled financial statements. An association with total annual revenues between $300,000 and $500,000, shall prepare reviewed financial statements.

An association with total annual revenues of $500,000 or more shall prepare audited financial statements. Pursuant to Rule 61B-22.006 of the Florida Administrative Code, reviewed financial reports and audited financial reports must be performed by an independent certified public accountant. Reports of cash receipts and expenditures or compiled financial reports may be prepared by the association.

Question: I was recently elected as the treasurer of my condo association and discovered that the association is writing paper checks for all expenses, no matter how minor. Is it possible to get a debit card in the name of the association which we could use for minor expenses like office supplies? – M.F., Longwood

Answer: In short, no. Section 718.111(15), Florida statutes, specifically forbids associations, their officers, directors, employees and agents from using a debit card issued in the name of the association, or billed directly to the association, for the payment of any association expense.

Further, pursuant to the same statute, the use of a debit card issued in the name of the association, or billed directly to the association, for any expense that is not a lawful obligation of the association may be prosecuted as credit card fraud.

This provision was added to Chapter 718, Florida statutes in 2017 in order to prevent fraud, as unlike a credit card, when a debit card is used the funds are instantly withdrawn from the association’s account.

This gives condominium associations’ boards of directors added protection to make sure that all purchases on behalf of the association are duly authorized. The statute does not apply to credit cards, so the association still has that option.

Please also note that the prohibition of debit cards was only enacted with regard to condominium associations, and not to homeowners’ associations or cooperative associations.

The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney client relationship between the reader and Goede, Adamczyk, DeBoest & Cross, or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.

© 2021 Journal Media Group, Avi S. Tryson, Esq. is partner of the Law Firm Goede, Adamczyk, DeBoest & Cross.

NAPLES, Fla. – Questions often arise when there is an insurable event (such as when a water or sewer pipe bursts), who pays for the damage? The condominium association or the unit owner?

The answer will depend upon what the damaged items are. Section 718.111(11)(f), Florida Statutes, provides that: “(f) Every (Condominium Association) property insurance policy issued or renewed on or after January 1, 2009, for the purpose of protecting the condominium must provide primary coverage for:

1. All portions of the condominium property as originally installed or replacement of like kind and quality, in accordance with the original plans and specifications.
2. All alterations or additions made to the condominium property or association property pursuant to s. 718.113(2).
3. The coverage must exclude all personal property within the unit or limited common elements, and floor, wall, and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments, including curtains, drapes, blinds, hardware, and similar window treatment components, or replacements of any of the foregoing which are located within the boundaries of the unit and serve only such unit. Such property and any insurance thereupon is the responsibility of the unit owner.”

So, the association’s insurance policy covers the structures of the building(s) as originally installed or replaced, plus all approved alterations or additions to the building(s). The association policy also covers the unit A/C equipment (this was a change to the statute after Hurricane Irma to insure that all the air conditioning is repaired and turned on as quick as possible after a hurricane to prevent mold growth). The unit owners’ policies, if obtained, cover their personal property and some fixtures within the unit and floor, wall and ceiling coverings. The drywall in the units and the stuff behind the drywalls is the association, wherein the paint or wall paper on the drywall is insured by the unit owner.

While the association is required to carry insurance on the structures, the statute does not require unit owners to carry a unit policy, and many unit owners decide to self-insure their unit and not carry unit insurance unless their Declaration of Condominium requires them to do so (most do not). Many owners who do not have a mortgage decide to take the risk of self-insuring their condominium unit.

Another question that often arises is who pays for the dry-out of the unit (fans etc.) from a pipe burst, as the statute is silent on this. As both the association benefits from the dry-out (less chance of mold behind the walls) as well as the unit owner (property saved from turning moldy green or black), the dry out cost should be shared proportionally between the association and the unit owner depending upon how much they benefit. If it cannot be determined a proportional share, the dry out cost is usually shared equally – 50/50.

Who pays the association deductible for an internal unit drywall repair (unit perimeter drywall is Association responsibility) can be a complicated answer and depends upon whether there was ever a deductible opt-out vote of the members or not. If that question arises, you should check with your association’s legal counsel.

For non-insurable event damage (such as mold growth from a slow water leak over an extended period of time), you will need to look at your governing documents maintenance, repair and replacement responsibilities usually contained in your Declaration of Condominium to determine whether the association or the owner must pay for the repair.

Rob Samouce is a principal attorney in the Naples law firm of Samouce & Gal, P.A. He is a Florida Bar Board Certified Specialist in Condominium and Planned Development and concentrates his practice representing condominium, cooperative and homeowners’ associations in all their legal needs including the procedural governance of their associations, covenant enforcement, assessment collections, contract negotiations and contract litigation, real estate transactions, general business law, construction defect litigation and other general civil litigation matters. This column is not based on specific legal advice to anyone and is based on principles subject to change from time to time.

© 2021 Journal Media Group

WASHINGTON – U.S. News & World Report unveiled its 2020-2021 Best Places to Live and Best Places to Retire in the United States. The new lists evaluate the country’s 150 most populous metropolitan areas based on affordability, job prospects and desirability.

In the “Best Places to Retire” category, Florida metro areas stood out with seven out of the top 10 slots and 13 of the top 25 slots.

“After a prolonged period of staying at home, people are taking a critical look at where they live, and many are looking to find a place they can feel happier, afford more or pursue new opportunities,” says Devon Thorsby, real estate editor at U.S. News. “The Best Places rankings can help people examine the details they consider important in a larger community.”

This year, U.S. News increased the number of metropolitan areas evaluated for both sets of rankings from 125 to 150, to provide a broader and more accurate reflection of where Americans can live and retire.

Best places to retire

U.S. News & World Report’s announcement of top retirement destinations says it’s “dominated by Florida metro areas, largely due to affordable homes, low taxes and high ratings for happiness and desirability.”

An increase in Desirability and Job Market scores lifted Sarasota from No. 2 last year to No. 1 this year – but it overtook another Florida city, Fort Myers, which became No. 2. And while Port. St. Lucie’s Housing Affordability score decreased slightly, increases in Desirability, Job Market and Health Care scores helped it jump two places to No. 3.

Miami also saw a decrease in Housing Affordability, but it broke into the top 10 this year, jumping five places to No. 9 thanks to Desirability and Job Market score increases.

The top 25 places to retire also includes three Texas communities, and two places each in Michigan, North Carolina and Tennessee.

“Moving to a new place for retirement can reduce your cost of living and improve your quality of life,” says Emily Brandon, U.S. News senior editor for retirement. “The Best Places to Retire includes information about housing costs, access to quality hospitals and the strength of the job market, which can help you find a retirement spot that will meet your needs.”

The 2020-2021 Best Places to Retire were determined based on a methodology that factored in happiness, housing affordability, health care quality, retiree taxes, desirability and job market ratings. These measures were weighted based on a public survey of individuals across the U.S. who are nearing retirement age (ages 45-59) and those who are of retirement age (60 or older) to find out what matters most when considering where to retire. Data sources include the U.S. Census Bureau and the Bureau of Labor Statistics, as well as U.S. News rankings of the Best Hospitals.

2020-2021 Best Places to Retire – Top 25

1. Sarasota
2. Fort Myers
3. Port St. Lucie
4. Naples
5. Lancaster, Pa.
6. Ocala
7. Ann Arbor, Mich.
8. Asheville, N.C.
9. Miami
10. Melbourne
11. Myrtle Beach, S.C.
12. Nashville, Tenn.
13. Jacksonville
14. Manchester, N.H.
15. Daytona Beach
16. Orlando
17. Dallas-Fort Worth, Texas
18. Lakeland
19. Chattanooga, Tenn.
20. Tampa
21. Grand Rapids, Mich.
22. Houston, Texas
23. Charlotte, N.C.
24. San Antonio, Texas
25. Pensacola

U.S. News & World Report is a global leader in quality rankings that empower people to make better, more informed decisions about important issues affecting their lives.

© 2020 Florida Realtors®

WASHINGTON – Paycheck Protection Program (PPP) loans created under federal programs to help businesses weather the coronavirus pandemic offer a lifeline to businesses struggling to make it through the downturn and thrive once it ends.

However, the loans have created some confusion, and many businesses who could benefit have been slow to apply. To help simplify the process, the National Association of Realtors® (NAR) created a series of one-page information guides that make it easier for real estate professionals and other business owners to understand whether they’d benefit from a PPP loan, which may be forgivable.

In addition to info on applying for a PPP loan, the one-page guides also answer questions about second-draw loans, forgiveness, and PPP for 501(c)(6).

NAR guides

• PPP Loan Overview
• PPP Second-Draw Loans
• PPP Forgiveness
• PPP for 501(c)(6)

The first COVID-19 relief package passed in April 2020, the “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act), had some strong provisions aimed at helping small businesses. It included more than $360 billion for new Small Business Administration (SBA) programs, the 7(a) Paycheck Protection Program (PPP) loans and the Economic Injury Disaster Loans (EIDL) advance grants program.

Since that time, Congress has appropriated even more funds, most recently in the Dec. 21, 2020, COVID-19 relief bill and omnibus spending package, which added $284.45 billion for PPP and $20 billion for EIDL advance grants.

The new law added a streamlined forgiveness process for loans less than $150,000 and gave some hard-hit small businesses access to second-draw PPP loans. It also corrected an IRS ruling and now business expenses paid with forgiven PPP loan money are now tax-deductible.

Both loan programs were extended until Sept. 30, 2021.

NAR offers more information about loan programs on its website. Applicants seeking a PPP loan also have a simplified access application called “EZ Application.

© 2021 Florida Realtors®