hoa audit checklistWhen a developer reaches a critical phase of completion of a condominium or homeowners’ community, control of the community association is transferred from the developer to the owners. This process is known as “transition” or “turnover.”

Although the basics of the turnover process are set out by law, the keys to a successful turnover go beyond what’s written in the law books. A professional community association  management company with decades of expertise and industry knowledge will be of great assistance in helping your association navigate through the turnover process. Here’s a property management turnover checklist, which includes items you’ll want to make sure are completed in order to make your turnover a success.
  1. Election of the Board

     While there are a number of criteria to define when the turnover must occur, the most common trigger is three months after 90% of all units have been conveyed. It is important to recruit willing and capable owners to serve on the Board during this critical period.
  2. Educate Homeowners

     Keep in mind that not only is the association new, but many community members might be new to the area, as may be the common interest ownership concept. The association’s  management team should engage the community members with a series of educational events that help them understand their community association, as well as the elections process. After all, informed community members make better neighbors.
  3. Educate the Board

     During the turnover process, it’s essential that the Board members understand their responsibility in obtaining all necessary documents as outlined by Florida statutes together with any property and amenities that the developer was to deliver. The Board should also ensure that the association has received all of the funds it is entitled to from the developer, and it should ascertain whether there are any construction defects that need to be addressed. Of course, the Board can’t do all this on its own, so it’s important to follow the next step.
  4. Build your Team

     Turnover requires the expertise of professionals across a variety of disciplines. To make yours a success, build a team that includes an experienced community association management firm, accountant, insurance agent, engineer and attorney. These individuals have the specific expertise you’ll need for a seamless turnover. The guidance of a great community association management company is of critical importance to your association during this process. With years of experience, a community association man agement company will have long-standing relationships with professionals who can serve your association well.
  5. Review the Audit

    Florida law requires a developer to provide you with an audit of the association’s records from incorporation of the association through the date of turnover. The association will retain its own accountant to review this audit and develop a detailed report. There may be discrepancies between the audit the developer has provided and the financial records reviewed by your accountant. In any case, this step is essential – it will lay the groundwork for negotiating the final financial settlement between the developer and the association.
  6. Conduct an Engineering Inspection

     Your engineer should inspect the common areas, HVAC/elevator/fire equipment and the as-built plans. Random interior unit checks should also be part of the inspection process.
  7. Review your Turnover Checklist

     Once the unit-owner controlled Board is elected, the association receives essential documents from the developer. These include the original recorded declaration, a certified copy of the articles of incorporation, a copy of the bylaws of the association, minute books, rules and regulations, financial records, contracts, insurance policies, a roster of owners, and resignation of the developer directors.
  8. Engage the Support of a Community Association Management Company

     A turnover can be complex, that's one of the reasons why having a property management turnover checklist is essential. Partnering with an experienced management company can ensure success – it will be their role to coordinate the turnover meeting process, which entails working closely with the association’s attorney to prepare all documents that are provided to owners, as well as to develop a comprehensive business plan for the owner-controlled board to follow. They’ll also work with your accountant to ensure the audit is conducted properly.
The turnover process is more than a transition – it’s also a negotiation between you and the developer. Ensuring that your turnover proceeds seamlessly and successfully will help put your association in a position of strength, right from the beginning. Contact FirstService Residential, Florida’s leading community association management company, to learn more today.
Friday October 17, 2014