A review of the disclosure requirements is important because of the circulation of a relatively recent appellate court case, Romero v. Shadywood Villas H.O.A., Inc., 20 Fla. L. Weekly D1354 (Fla. 3d DCA, June 7, 1995). Mr. Romero filed a lawsuit to require the Association to deliver a financial report to each member of the Association pursuant to §617.1605 Fla. Stat. (1993). In Romero, the Third District Court of Appeals held that homeowners' associations must mail or furnish by personal delivery to each member a complete financial report of actual receipts and expenditures for the previous 12 months.

To simplify the issue, the appellate court framed the dispute as follows: Whether homeowners' associations are required to comply with the added requirement of delivering financial reports to its members, as required by §617.1605, or whether associations are only required to keep financial reports open for inspection, as required §617.303(4)(i). Section 617.1605 provides in pertinent part as follows:

Within 60 days following the end of the fiscal or calendar year or annually on such date as is otherwise provided in the bylaws of the corporation, the board of directors shall mail or furnish by personal delivery to each member a complete financial report of actual receipts and expenditures for the previous 12 months.

Section 617.303(4)(i) Fla. Stat. (1993) provides in pertinent part as follows:

The association shall maintain each of the following items, when applicable, which shall constitute the official records of the association:

* * *

(i) Accounting records for the homeowners' association and separate accounting records for each parcel, ... The accounting records shall be open to inspection by parcel owners or their authorized representatives at reasonable times. The accounting records shall include, but are not limited to:

1. Accurate, itemized and detailed records of all receipts and expenditures.

* * *

3. All audits, review, accounting statements, and financial reports of the homeowners' association.

(Emphasis added). The appellate court concluded that under the "old" law homeowners' associations were required to comply with both, §617.303(4) and §617.1605 and deliver financial reports to its members.

In June 1995, the amendments to the Homeowners' Association Law were effective. The amendments as a practical matter defeat the Romero decision for financial reports prepared in 1996. Most commentators may not be aware of this significant change.

Now §617.303(7), concerning financial reports, provides as follows:

FINANCIAL REPORTING. The association shall prepare an annual financial report within 60 days after the close of the fiscal year. The association shall, within the time limit set forth in Subsection (5), provide each member with a copy of the annual financial report or a written notice that a copy of the financial report is available upon request at no charge to the member.

(Emphasis added). Section 617.303(5), also amended, now provides in pertinent part as follows:

INSPECTION AND COPYING OF RECORDS. The official records shall be maintained within the state and must be open to inspection and available for photocopying by members or other authorized agents at reasonable times and places within 10 business days after receipt of a written request for access.

Thus, the legislature determined that homeowners' associations must either provide each association member a copy of the annual financial report or a written notice that a copy of the financial report is available upon request at no charge to the member.

Although §617.303(7) and §617.1605 are not entirely consistent, one must presume that the legislature enacted §617.303(7) with knowledge of §617.1605's existence. Because §617.303(7) applies specifically to homeowners' associations and because it contains more specific financial report guidelines, homeowners' associations will be recommended to comply with §617.303(7). Thus, homeowners' associations are suggested to do the following:

1) Obtain a financial report as soon as possible but no later than 60 days after the end of a fiscal year;

2) Within 10 days after obtaining a financial report, mail or deliver each association member a copy of the annual financial report or a written notice that a copy of the financial report is available upon request at no charge to the member.