Topic:
CONDOMINIUMS; BUDGETS; FINANCIAL DISCLOSURE;
Location:
CONDOMINIUMS;

OLR Research Report


October 4, 2005

 

2005-R-0725

CONDOMINIUMS-FEES FOR FINANCIAL INFORMATION TO UNIT OWNERS

By: George Coppolo, Chief Attorney

You asked if the law allows or requires a condominium association to charge a unit owner a fee for providing financial information about the condominium, and if so, whether the law set any limits on the fee?

Our office is not authorized to give legal opinions and this report should not be considered one.

SUMMARY

There are three condominium laws that either require the association to provide certain financial information to a unit owner or permit an owner to inspect association records. One law requires the association to provide a unit owner with a summary of the association's proposed budget. It does not appear to authorize the association to impose a fee.

A second law gives unit owners the right to inspect association documents. It does not specify whether unit owners may copy these documents or whether the association may charge a fee for the inspection or copies. But a corporation law that appears to apply if the association is organized as a nonstock corporation allows the imposition of reasonable fees for copying records.

The third law requires the association to provide a unit owner with certain financial and other records when the unit owner is selling the unit. (This material is referred to as a resale certificate.) This law prohibits the association from charging more than $125 and requires the fee to reflect the actual printing, photocopying, and related costs.

PROPOSED BUDGET SUMMARY

The law requires the condominium association's executive board to provide a summary of the association's proposed budget to each unit owner and set a date for the unit owners to decide whether to ratify it (CGS 47-245(c)). The law does not establish a fee for this summary, nor does it explicitly confer on the association or the executive board the authority to charge a fee. It is unclear whether a fee can be charged. Because the law imposes a duty to provide this information and is silent as to fees, it does not appear that the law authorizes the imposition of any fee as a condition of receiving this information.

INSPECTION OF ASSOCIATION RECORDS

Another law requires the association to make all its financial and other records “reasonably available” to unit owners or their agents for examination (CGS 47-260). The law does not specify whether 1) the association may charge unit owners a fee to examine or copy records, or 2) unit owners have the right to photocopy these records.

The nonstock corporation law may also give unit owners the right to inspect certain financial documents. According to Matt Perlstein, a condominium law expert, most condominium associations are organized as nonstock corporations. (If a condominium association is organized as a nonstock corporation, unit owners are corporation members.) The nonstock corporation law requires corporations to maintain certain records and to allow members to inspect and copy them (CGS 33-1236(b)).

One such record is an annual financial statement, which includes a balance sheet of disbursements and receipts (CGS 33-1241). Members are entitled to inspect and copy this and other association records during regular business hours at the corporation's principal office (CGS 33-1326(a)).

The law allows corporations to impose a reasonable charge for copies, covering the costs of labor and material. The charge may not exceed the estimated cost of production, reproduction, or transmission (CGS 33-1237(d)).

The requirements of the condominium law supersede other laws that are inconsistent with it. But applicable corporation and other laws that are not inconsistent with it are controlling (CGS 47-207). Thus, the corporation law allowing reasonable charges could apply, since the condominium law regarding inspecting and copying records is silent regarding charges for copies.

RESALE CERTIFICATE

Another condominium law requires unit owners to provide certain information to a purchaser of his unit. (This is commonly called a resale certificate.) The law requires the association to maintain such information and to provide it to unit owners upon request (CGS 47-260 and 270).

The law permits an association to charge a unit owner up to $125 for preparing the resale certificate and other documents the law requires unit owners to provide purchasers. But the association must establish a fee that reflects the actual printing, photocopying, and related costs to prepare the certificate and related material (CGS 47-270, as amended by PA 05-125).

The association must itemize the actual printing, photocopying, and related costs and provide an itemized list to the unit owner with the certificate and documents. It allows the association to charge an additional fee of up to $10 for furnishing the certificate and all required documents to the unit owner within three business days after it receives a written request.

The association may not include in the regular or expedited fee costs for services provided by an attorney or paralegal.

The following financial information must be included in the certificate:

1. a statement setting forth the amount of the periodic common expense assessment and any unpaid common expense or special assessment currently due and payable from the selling unit owner,

2. a statement of any other fees payable by the owner of the unit being sold,

3. a statement of any capital expenditures in excess of $1,000 approved by the executive board for the current and next succeeding fiscal year,

4. a statement of the amount of any reserves for capital expenditures,

5. the association's current operating budget,

6. a statement of any unsatisfied judgments against the association and the existence of any pending suits in which the association is a defendant, and

7. a statement of the insurance coverage provided for the unit owners' benefit.

GC:ro