It covers the period from incorporation. Not the last fiscal year, and not the last three.
✓ Audited by an independent CPA, at developer expense
✓ Covers incorporation through turnover
✓ HOAs: only if incorporated after Dec 31, 2007
✓ The number that matters is the guarantee settlement
STEP 1
We meet your board
We start with a discovery session to understand your size, needs, and goals. We review past records, current systems, and any lingering messes you want cleaned up.
STEP 2
We Onboard Your Books
We don’t just plug in data. We get everything in sync. That means full reconciliations, setup of vendor and dues tracking, and a financial calendar tailored to your schedule.
STEP 3
We Deliver Every Month
You’ll get board-ready financials on a predictable rhythm, complete with reconciliation notes, variance summaries, and report context. No chasing. No guessing. Always accountable.
STEP 4
We Keep You Compliant
Deadlines, filings, vendor records, audit prep — we make sure your board stays ahead of what matters most. When tax time comes, it’s an easy process because we’ve kept the finances in order.
Turnover audit review for Florida boards
The turnover audit is not a formality to file. It is a directed examination of whether the developer paid what it owed, and it produces one number that decides whether the association is owed money at handover.
Ledgerly reads the audit against what the Division rule requires it to disclose, tests the guarantee settlement on the accrual basis, and tells the board plainly whether the figure presented is supported.
What the statute actually requires
Section 718.301(4)(c) for condominiums, and s. 720.307(4)(t) for homeowners' associations, use nearly identical language. The developer delivers the financial records, including financial statements, and source documents from the incorporation of the association through the date of turnover. Those records must be audited by an independent certified public accountant for the period from incorporation — or from the period covered by the last audit, if an audit has been performed for every fiscal year since incorporation. Statements are prepared under GAAP and audited under GAAS.
Then the sentence that tells you what the audit is for: the accountant must examine, to the extent necessary, supporting documents and records — including cash disbursements and related paid invoices, to determine whether expenditures were for association purposes; and billings, cash receipts and related records, to determine that the developer was charged and paid the proper amounts of assessments.
That is not a general assurance engagement. It is a directed examination of whether the developer paid what it owed.
What the Division rule adds, for condominiums
Rule 61B-22.0062 is the most useful single document for scoping a condominium turnover audit, and most boards have never heard of it. Beyond ordinary GAAP statements, it requires revenues and expenses to be presented separately for each fiscal year and any interim period, and requires the notes to include:
- A statement that the financial statements were prepared pursuant to s. 718.301(4)(c).
- A statement of total cash payments made by the developer to the association.
- Where the developer claims to have paid common expenses that do not appear on the association's books, each such expenditure identified separately by amount and purpose.
- Where a guarantee existed during the audit period: the guarantee period; total common expenses incurred during it; assessments charged to non-developer owners during it; non-assessment revenues earned, disclosed separately by activity; expenses incurred producing those revenues, by activity; developer payments made under the guarantee; and any financial obligation due to or from the developer resulting from the guarantee.
That last item is the number. Everything else in the audit is the working that produces it.
Understanding the guarantee, because the audit is mostly about it
A condominium developer offering units for sale has two ways to avoid paying assessments on unsold inventory, and they are not the same device.
The first, at s. 718.116(9)(a)1., is a short excused period that must be authorized by the declaration and must terminate no later than the first day of the fourth calendar month following the month of the first closing. During it the developer pays common expenses that exceed the regular periodic assessments charged to other owners.
The second, at (9)(a)2., is the guarantee: the developer guarantees to all purchasers that assessments will not exceed a stated level, and in exchange funds the deficit. It may be stated in the purchase contract, the declaration, the prospectus, or a written agreement with a majority of non-developer owners. There is no statutory maximum duration, and it commonly runs to turnover.
Reserves are inside the guarantee
The statute is silent on reserves, which is where the argument comes from. The Division rule is not: the guarantor must advance cash where assessments and other revenues are insufficient to pay all common expenses "including the full funding of the reserves unless properly waived," and the guarantor's total obligation is computed on the accrual basis on the same footing. The Second District took the same view in Tara Manatee, Inc. v. Fairway Gardens at Tara Condominium Association , where the developer conceded it had to fully fund reserves for constructed units and common elements.
The limit that case draws is worth knowing before you build a claim: the developer was not liable for reserves attributable to units that had not been built, because unbuilt units do not deteriorate or accrue maintenance needs.
And the "unless properly waived" qualifier has almost no remaining field of operation. Since 2022, a developer-controlled condominium association may not vote to waive or reduce reserves at all. So for any guarantee period running under a developer-controlled board today: reserves are budgeted, reserves are common expenses, and the guarantor funds the shortfall.
Nine things to test
- 1
The net guarantee settlement figure
The single number stating whether the developer owes the association or claims the reverse. The Division rule requires it to be disclosed; if it is absent, the audit is incomplete.
- 2
Whether buyer money paid operating expenses
Section 718.116(9)(b) prohibits using any funds receivable from unit purchasers — expressly including capital contributions and startup funds collected at closing — to pay common expenses during a period when the developer is excused. Each misapplied dollar reduces the developer's deficit obligation by a dollar. This is a discrete, independently actionable violation.
- 3
Unrecorded developer-paid expenses
Developers routinely assert off-book payments to reduce the deficit. The rule requires each to be identified separately by amount and purpose. Challenge unsupported aggregates.
- 4
Accrual versus cash presentation
The guarantor's obligation is computed on the accrual basis. A cash-basis presentation understates it by excluding expenses incurred but unpaid when the guarantee ended.
- 5
"Earned" versus "collected" assessments
The formula subtracts assessments earned from non-guarantor owners, regardless of whether the level actually charged was below the guaranteed maximum. A developer that under-charged does not get credit for the shortfall.
- 6
Whether the developer was charged correctly on its own units
After any excused period ended, the developer becomes an ordinary assessment payer. The statute names verifying this as an express audit objective.
- 7
Reserve balances against what full funding would have produced
Compare the accumulated balance to the funding the budgets called for, and read it alongside the turnover structural integrity reserve study delivered under paragraph (p).
- 8
Insurance compliance during the guarantee
The developer may pass through uninsured natural-disaster losses only if the association maintained all insurance required by s. 718.111(11)(a). If it did not, that pass-through fails.
- 9
Whether every prior fiscal year was in fact audited
This determines whether the audit period runs from incorporation or only from the last audit. Developers sometimes assert prior audits that were never performed.
What happens to the money at turnover
The subsidy stops and the developer becomes an ordinary assessment payer on whatever it still owns. Assessments reset to actual cost, because the guaranteed amount was a cap rather than a budget — this is the turnover spike, and it is arithmetic, not mismanagement. The guarantor's obligation crystallises on the accrual basis at the end of the guarantee period and becomes a fixed receivable or payable. The audit is the instrument that measures it.
The obligation is not extinguished by turnover. The statute contains no cutoff and no release, and the whole design — measure at the end of the period, disclose the balance in the audit — assumes settlement afterwards.
Where this fits
This page covers one stage of the handover. The full sequence, with the before-and-after board checklist, is on the pillar: Developer to owner control: the complete Florida transition guide for boards.
Related pages in this series
The Truth Is
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