Most property owners association (POA) boards are aware of annual disclosures that need to be completed and sent to its membership on an annual basis. However, nearly all states have their own POA reporting requirements, too.
The annual report is one of the most important documents your POA must prepare. The POA board of directors–which is selected by members through regular elections in associations–are typically responsible for drawing up and sending out this report.
This guide explores how a POA is answerable to the state, what an annual POA report is, and the consequences of failing to file one.
Reporting for associations is crucial for maintaining transparency and accountability. An annual POA report provides a comprehensive overview of the association’s activities over the past year, keeping members informed about the POA’s financial status. This is particularly important for transparency, as it reassures members that their dues are being used responsibly and for the benefit of the community.
Annual reports play a key role in preventing fraud within the association and summarizing its achievements. Since members may not always stay updated on POA activities or might find the rules overly restrictive, the annual report serves as an educational tool, showcasing accomplishments and providing a clear picture of the association's impact. Effective reporting for associations helps build trust and engagement among members by highlighting how their contributions support the organization's goals.
The annual report is usually filed with the Secretary of State once each year. Some states set the requirement to every other year. The board should be familiar with the state’s laws and reporting requirements.
The primary purpose of filing an annual POA report is to update the state and membership on important information about the association. The report contains data on topics such as:
The responsibility of preparing and submitting the report falls mainly on the Secretary of the POA, but all board members should review the information before the report is filed. Sending reports with false information or errors will reflect negatively on the association and have unfavorable repercussions.
A surprisingly large number of POA boards fail to file an annual report with their Secretary of State. Not filing can have serious ramifications, including:
However, it is possible to restore the status of good standing with the Secretary of State by submitting an updated report and paying any outstanding penalties or fines.
The content of a POA report varies from state to state, so you need to check with the appropriate authorities to determine what should be included in your report.
In general, an annual POA report contains the following:
The report should also highlight the board’s notable achievements. This can include community improvements and put a spotlight on the work the board has been putting in behind the scenes.
Your POA needs to be careful about what is included in the report. While you are required to summarize finances and highlight accomplishments, you still need to protect confidentiality.
The POA report should not include sensitive information about the POA and property owners. It should also not include private information about any ongoing lawsuits, but it is important to share the status of the litigation.
If your POA is not sure if certain details should be included in the report or whether POAs have to be incorporated, it should consult with the association’s counsel.
An annual report is an important part of any POA. It recognizes the POA for a job well done and provides transparency among POA members and the state.
For more helpful information, be sure to check out our guide on whether a property owner can withdraw from a POA!
© 2011-2024 ElectionBuddy, Inc. All Rights Reserved
