Topic:
CONDOMINIUMS; LEGISLATION; PUBLIC RECORDS; FINANCIAL DISCLOSURE;
Location:
CONDOMINIUMS;

OLR Research Report


May 18, 2007

 

2007-R-0389

CONDOMINIUMS-ACCESS TO ASSOCIATION RECORDS

By: George Coppolo, Chief Attorney

You asked what rights unit owners have to examine association records in condominiums created under the Unit Ownership Act and the Condominium Act. Our office is not authorized to give legal opinions and this report should not be considered one.

SUMMARY

The Common Interest Ownership Act (CIOA) requires that all financial and other records of the association of unit owners must be made reasonably available for examination by any unit owner and his authorized agents. This requirement appears to automatically apply to condominiums created before CIOA was adopted. Thus, the CIOA requirements for access would appear to govern condominiums created under the Unit Ownership Act and the Condominium Act. But if the declaration or bylaws of a condominium created under either of these two acts has contrary provisions that reflect the access rules in the act under which the condominium was created, it appears that these contrary provisions may govern.

CIOA, THE CONDOMINIUM ACT, AND THE UNIT OWNERSHIP ACT

Three different sets of laws govern condominiums, depending on when they were created. CIOA governs the creation, alteration, management, termination, and sale of condominiums and other common interest communities formed in Connecticut after January 1, 1984 (CGS 47-200 et seq.). The Condominium Act governs condominiums created from 1977 through 1983 (PA 76-308; CGS 47-68a to 47-90c). Condominiums created before the Condominium Act was adopted are governed by the Unit Ownership Act (PA 1963, No. 605, July 10, 1963; CGS 47-67 to 47-115, Revised to 1975).

Certain CIOA provisions automatically apply to condominiums created in Connecticut before January 1, 1984, but only with respect to events and circumstances that occur after December 31, 1983. But, these provisions do not invalidate existing provisions of the declaration, bylaws or surveys, or plans of those condominiums (CGS 47-216). By specifying that these automatically applying CIOA provisions do not invalidate the declaration, bylaws, and other documents, the law seems to be making these documents controlling over the CIOA provisions, but this is not clear and we did not find any court case that has ruled on this issue. If this is the case, it appears that these “automatically-applying” provisions would not necessarily apply to a pre-CIOA condominium if the declaration or bylaws contained a different requirement, procedure, or rule.

The law permits condominiums created before January 1, 1984, to amend their governing instruments (declaration, bylaws, survey, or plans) to conform to portions of CIOA that do not automatically apply. Thus, it appears that a pre-CIOA condominium may adopt any of these CIOA provisions as a part of its declaration or bylaws. But, an amendment must be adopted in accordance with the law that applied when the condominium was created and with the procedures and requirements specified by the condominium's declaration and bylaws (CGS 47-218).

RIGHT OF UNIT OWNERS TO EXAMINE ASSOCIATION RECORDS

CIOA

Under CIOA, the association must keep financial records sufficiently detailed to enable the association to comply with CGS 47-270. CIOA requires that all financial and other records must be made reasonably available for examination by any unit owner and his authorized agents (CGS 47-260).

CGS 47-270 requires that the following information be available to unit owners:

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

2. any other fees payable by a unit owner;

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. 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;

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

8. a statement of any restrictions in the declaration affecting the amount that may be received by a unit owner on sale, condemnation, casualty loss to the unit or the common interest community, or termination of the common interest community; and

9. a statement describing any pending sale or encumbrance of common elements.

Both of these CIOA statutes (CGS 47-260 and 47-270) are provisions that automatically apply to condominiums created under the Unit Ownership Act and the Condominium Act (CGS 47-216(a)). But these provisions do not invalidate existing provisions of the declaration, bylaws, surveys, or plans of these condominiums. By specifying that these automatically applying CIOA provisions do not invalidate the declaration, bylaws, and other condominium documents, the law seems to be making these documents controlling over the CIOA provisions. But this is not clear and we did not find any court case that has ruled on this issue.

Condominium Act

It is possible that a condominium created under the Condominium Act incorporated into its declaration or bylaws the statutory provisions regarding access to condominium records by unit owners contained in the Condominium Act. If so, these provisions may control instead of the CIOA requirements because of the language in CGS 47-216(a)

specifies that the automatically applying provisions in CIOA do not invalidate the declaration, bylaws, and other condominium documents of condominiums created before CIOA was adopted.

Under the Condominium Act, the declarant and the association must maintain accounting records according to generally accepted accounting practices. Such records must include:

1. a record of all receipts and expenditures;

2. an account for each unit which must designate the name and address of each unit owner, the amount of each assessment, the dates on which the assessment comes due, the amounts paid on the account, and the balance due;

3. a record of the actual cost, irrespective of discounts and allowances, of the maintenance of the common elements; and

4. an accurate account of the current balance in the reserve for replacement and for emergency repairs (CGS 47-81(a)).

The Condominium Act also requires that records maintained by the declarant, association, or manager must be available for examination and copying by any unit owner or his duly authorized agents or attorneys, at the unit owner's expense, during normal business hours and after reasonable notice (CGS 47-81(b)).

It also require the declarant, from the date of the recording of the declaration until they relinquish control of the association, to have a certified audit of the books of the condominium prepared by a certified public accountant at least once every calendar year that must be available for examination by the unit owners. Thereafter on the written petition of unit owners of not less than 25% of the units then completed, a certified audit by an independent certified public accountant must be made, but not more than once in any consecutive 12-month period. The cost of the audit is a common expense (CGS 47-81(c)).

Unit Ownership Act

It is possible that a condominium created under the Unit Ownership Act incorporated into its declaration or bylaws the statutory provisions regarding access to condominium records by unit owners contained in the Condominium Act. If so, these provisions may control instead of the CIOA requirements for the same reason we discussed above.

Under the Unit Ownership Act, the manager or board of directors must keep detailed, accurate records, in chronological order, of the receipts and expenditures affecting the common areas and facilities. These records must specify and itemize the maintenance and repair expenses of the common areas and facilities and any other expenses incurred. Unit owners have the rights to examine these records and vouchers authorizing the payments at convenient hours during weekdays (CGS 47-81, Revised to 1975).

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