Community owners may seek audits when accountants find fraud signs

Unit owners may petition Superior Court to order their association to hire an independent third party to audit its financial records. The petitioning owners must hold at least 20 percent of the association’s votes and attach a certified copy of the recorded vote allocation. The owners must certify that they in good faith believe there are grounds for an audit. A certified public accountant who specializes in fraud or financial forensics must provide a signed opinion that appears to show fraud or misuse, and explain its basis. The association or its manager may charge a reasonable fee to provide records; the association may be entitled to reasonable attorney’s fees. No audit may have been completed in the 12 months before the owners file their petition. This provision takes effect October 1, 2026.

The home seller disclosure form asks whether a property is in a common interest community and whether the community charges dues or fees. These questions and advice concern a home located in a common interest community. For a community with more than 12 units, the form advises buyers to get a resale certificate and ask for a report on reserve funds. For a community with 12 or fewer units that is not required to provide a resale certificate, if none is available, the form advises buyers to consult professionals and residents. These provisions take effect October 1, 2026.