Amendment #1 makes the following change to the 2nd edition.
Amends the effective date clause to provide that audit requirements of Section 4 (instead of Section 6) apply to fiscal years beginning on or after the act's effective date.
Summary date: Apr 24 2017 - View summary
Summary date: Apr 19 2017 - View summary
House committee substitute makes the following change to the 1st edition.
Amends proposed GS 47C-3-113.1 and proposed GS 47F-3-113.1 (both captioned Crime and fidelity policy required). Requires management agents or companies hired by unit owners' associations or lot owners' associations who are authorized to disburse funds from accounts belonging to the association to be covered by a crime and fidelity insurance policy to those agents or companies (currently, applies to management agents and companies regardless of authority to disburse funds).
Summary date: Apr 6 2017 - View summary
Amends GS 47C-1-102 to provide that new GS 47C-3-113.1 (Crime and Fidelity Policy Required) applies to all condominiums created in this State on or before October 1, 1986, unless the declaration expressly provides to the contrary.
Enacts new GS 47C-3-113.1 (concerning condominium unit owners' associations) and new GS 47F-3-113.1 (concerning planned community lot owners' associations), each captioned "Crime and fidelity policy required." Requires unit owners' associations and lot owners' associations with annual assessments for common expenses of at least $25,000 or with at least $25,000 in total funds invested or on deposit to maintain a crime and fidelity insurance policy of 125% of the total funds on deposit or invested by the executive board plus 125% of the association's budget as of the last day of the association's last fiscal year, but not greater than $1 million, that insures the association against theft or dishonesty committed by the officers and members of the executive board, members of association committees, and persons employed by the association. Directs the executive board to obtain the policy on behalf of the association. Requires management agents or companies, as defined, hired by the association to be covered by a crime and fidelity insurance policy in the amount of the total annual budgets of all clients of the management agent or company, but not greater than $2 million, and that it cover the manager and the manager's employees and protect all or a portion of the association funds in the custody of the manager or manager's employees. Requires associations that cannot obtain a policy that complies with this statute to notify unit owners of that fact.
Amends GS 47C-3-118 (condominium associations) and GS 47F-3-118 (planned community associations) to delete the provision authorizing the executive board of an association or lot or unit owners to require a more extensive compilation, review, or audit.
Enacts new GS 47C-3-118.1 (condominium associations) and GS 47F-3-118.1 (planned community associations), each captioned "Financial audits." Directs the executive board to provide for an annual independent financial audit by a licensed certified public accountant, if the association has annual revenues, expenditures, or total account balances of $150,000 or more. Requires the audit to be completed no later than one year after the end of the fiscal year of the unit owners' association and be made available upon request to the unit owners within 30 days of its completion. Requires the audit to be completed by an entity with no affiliation with any members of the executive board or a management agent or company retained by the board.
Amends GS 47F-1-102 to provide that new GS 47F-3-113.1 and new GS 47F-3-118.1 apply to all planned communities created in this state before January 1, 1999, unless the articles of incorporation or the declaration expressly provides to the contrary.
Effective January 1, 2018. New GS 47F-3-113.1 and new GS 47F-3-118.1 apply to fiscal years beginning on or after the effective date of this act.