New audit requirements for condominiums

On October 15, 2013, Governor Snyder signed Public Act 134 of 2013, which amends the MI Condominium Act.  The act takes immediate effect, but the effective date of the Act was January 14, 2014.

The new provision requires that, for associations with annual revenues greater than $20,000 per year, the association’s books, records, and financial statements must be independently audited or reviewed on an annual basis by a certified public accountant.  The review or audit must be in accordance with standards issued by the American Institute of Certified Public Accountants.  

Associations with gross revenues less than $20,000 per year need not have an annual review to comply with the Act, but some condominium documents require an annual review or audit notwithstanding the threshold set by the Act; please review your condominium documents to see if you are obligated to have a review regardless of the threshold set by the Act.

An association may opt out of the review or audit by the affirmative vote of a majority of its members, either at a meeting of the association or (if the association’s documents permit) by action taken without a meeting.  The association must opt out on an annual basis; opting out is not permanent.

The effective date of January 14, 2014, gives any association that wants to opt out a window of opportunity to either call a special meeting of members or to comply with the “action without a meeting” provisions of their documents.  Otherwise, for any fiscal year that ends after January 14, 2014, an association must comply with the Act and have an audit or review by a Certified Public Accountant.

Here is a copy of the new Act.

Steve

© Steve Sowell 2017