Will not having an audit affect condo resale?

Our small self-managed condo building (8 units) is a few years old, and now that we’ve dealt with some other pressing issues, we are contemplating whether we need to start doing annual financial audits. We are not concerned about wrong-doing; it’s a relatively small budget and our treasurer provides monthy financials which we review. We’ve also tried to be pretty responsible financially – we are building a reserve fund and are properly insured. However, we’re concerned that there could be issues with mortgage lenders if we do not have audited financials, since one of our board members read that annual audits are a requirement for most lenders. Does anyone have any real life experience with this? If you live in a small building, do you have audits, and if not, have there been any issues with resales in your building?

shocksternyc

in Accounting 13 years and 1 month ago

1

Please log in, in order to post replies!

1 replies

Newest Oldest

brokelin | 13 years and 1 month ago

string(1) "1"
object(WP_User)#4819 (8) {
  ["data"]=>
  object(stdClass)#4845 (12) {
    ["ID"]=>
    string(5) "90954"
    ["user_login"]=>
    string(8) "brokelin"
    ["user_pass"]=>
    string(34) "$P$BukARi5fCxcdKRwwLKRkiawWixLEUK/"
    ["user_nicename"]=>
    string(8) "brokelin"
    ["user_email"]=>
    string(17) "annindc@yahoo.com"
    ["user_url"]=>
    string(23) "/forums/users/brokelin/"
    ["user_registered"]=>
    string(19) "2017-08-10 14:32:08"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(8) "brokelin"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(90954)
  ["caps"]=>
  array(2) {
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(2) {
    [0]=>
    string(10) "subscriber"
    [1]=>
    string(15) "bbp_participant"
  }
  ["allcaps"]=>
  array(4) {
    ["read"]=>
    bool(true)
    ["level_0"]=>
    bool(true)
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

It was never, ever a problem in our four unit coop…banks lent willingly.  we did have accountant prepared tax returns, which buyers submitted to their banks, but no audited financials…just what the coop treasurer prepared, which was used by out accountant in doing the tax returns.  When talking to a Brooklyn accountant once who does the tax returns for a lot of small buildings, wondering if we should get audited ones, I was told that audited financials are usually not done, because not needed.  to find out what lenders are doing in the current market, I would call one of the mortgage brokers that come highly recommended on this board and ask them….they would be in a position to know.  My focus was always on small coops, but I cannot imagine that lenders would hold a condo to a higher standard than coops, as condos have less expenses covered in common…no common taxes, no building mortgage, and, if newer, often no common boiler….but you never know, so be clear that you are asking about a small condo.