Checking the activities of a homeowners association

The abbreviation HOA stands for homeowners' partnership. It is represented by a non-profit legal entity carrying out management activities in relation to the housing stock. This indicates that the goal of creating an HOA is not to make a profit, but to create conditions for satisfying the non-material needs of the members of the partnership. Like any legal entity, an HOA is subject to verification measures by various higher-level structures.

Types of inspection of HOA activities

For your information
, the HOA is a multifunctional organization. Today, the partnership conducts 2 areas of activity - economic and financial. The purpose of conducting an inspection of the HOA is to identify the compliance of all activities with established standards and to determine the legality of financial and economic work.

Checking the operation of an HOA involves an extensive classification. According to the planning, it happens:

Attention! If you have any questions, you can chat for free with a lawyer at the bottom of the screen or call Moscow; Saint Petersburg; Free call for all of Russia.

• planned, carried out regularly, in accordance with the established schedule (usually the frequency is once a year);
• unscheduled, carried out when certain circumstances arise.

Depending on the persons conducting the HOA inspection, it can be classified into the following types:

• internal - initiated by members of the HOA and structures interacting with it;
• external – carried out by third-party monitoring organizations.

Depending on the completeness of coverage, the verification activities of the homeowners association may be as follows:

• complete: an audit of all documents is carried out; traditionally, this measure is relevant before the visit of employees from important authorities (prosecutor’s office, housing supervision);
• partial: include a minor area (for example, declarations).

Attention
Each type of HOA audit has its own characteristics and nuances.

1. Internal. Regulated by the norms of the Housing Code of the Russian Federation. To implement this, an audit commission is created. Within the framework of each partnership, the Regulations are approved, which determines the rights and responsibilities. The purpose of the HOA inspection is to assess the current financial and economic work of the organization and its compliance with the charter.

2. 
   Tax office.

   Despite the fact that the HOA does not have the main goal of making a profit, Art. 246 of the Tax Code of the Russian Federation indicates that the homeowners association acts as a taxpayer, and therefore undertakes to maintain tax reporting. Control is initiated by the tax service, which checks the correctness of filling out declarations, maintaining reporting documents, and the completeness of providing information on taxes paid.
3. Inspection of the HOA by the housing inspection. The housing committee is in charge of the review. The partnership is notified in advance of the event. Responsibility for detected violations of the law is provided for in Art. 7.22 Code of Administrative Offenses of the Russian Federation “Violation of standards for the maintenance and repair of housing stock” and 14.4 “Provision of low-quality services”, clause 7 of Art. 157. Housing complex of the Russian Federation.
4. Inspection of homeowners associations by Rospotrebnadzor. Consumer protection in this regard is stipulated in Art. 4 and the law on STDs. Therefore, in the event of poor-quality services, owners are given the right to file a complaint with this body, which will carry out inspection activities in the HOA.
5. Prosecutor's check. Typically, this type of activity is carried out without any special warning, most often in the course of receiving complaints from residents about the unfair work of the governing body.

Tips from the experts

Experts advise:

1. Clearly and clearly formulate goals and objectives before creating an HOA.
2. It is mandatory to register activities to avoid penalties.
3. It is recommended to keep reports correctly and competently.
4. If you do not have an accountant, you should contact specialized centers or services for help.
5. It is strictly prohibited to conduct any commercial activities.

These rules will help you avoid common mistakes.

Based on numerous reviews from citizens, it is clear that HOAs have their positive and negative sides. The expenditure of funds is strictly regulated by law. At any time, any person can complain about the partnership to the authorized body. There is also the possibility of changing management and accountant.

Video about the responsibilities of an HOA:

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Who can initiate a partnership audit?

Responsibility for poor performance of functions or inaction always falls on the shoulders of the chairman of the HOA. But the audit can also be initiated by other interested parties:

• chairman of the HOA;
• owners of residential premises;
• members of the partnership.

Regardless of whether a person belongs to the HOA, as well as whether he holds a certain position in the homeowners’ association, a citizen has the right to order an audit. But, as practice shows, most often the initiator of the procedure is the chairman.

Grounds for initiating criminal proceedings

In what situations are criminal cases initiated?

It is possible to initiate a criminal case against an owners’ association for a number of well-known reasons.

The first is a gross violation of the law or the rights of residents .

The second reason is engaging in an activity that does not correspond to the declared one and for which the appropriate tax has not been paid .

All these reasons are grounds for initiating a criminal case on this or another fact.

Find out about the rights and responsibilities of the governing bodies and founders of the HOA to residents from our article.

Grounds for checking the HOA

Attention:
Homeowners' association inspections are carried out as a planned event or as an unscheduled process based on complaints from residents or third parties about the failure to provide or poor-quality services.

The idea of ​​checking the HOA must comply with a number of basic principles:

• the chairman's interest in conducting the audit;
• the possibility of holding a meeting of HOA members;
• the likelihood of determining the frequency of reporting from the chairman more often than specified in the law;
• the likelihood of forming a criminal case against officials based on the results of the inspection.

It follows that the purpose of the audit plays a huge role. The goals are:

• determination of the fact and magnitude of discrepancies between reporting and actual materials;
• finding errors in the process of maintaining accounting documents;
• identification of facts of deliberate violation of the law.

The general grounds for holding such events appear in Part 2 of Art. 10 Federal Law No. 294, as well as in part 4.2 of Art. 20 Housing Code of the Russian Federation. In this regard, during the implementation of activities the following issues are resolved:

• procedure for creating an HOA;
• mandatory requirements for statutory documentation;
• procedures for concluding contracts for the supply of services with RNO;
• violation of the terms of the agreement and liability;
• procedure for using the resource base.

This is not the entire list of tasks that one or another audit can solve, but they are the main ones.

How to carry out this process

First of all, an agreement is concluded with the performing company . The contract with the audit company specifies:

• audit objectives;
• timing;
• location;
• period under review;
• list of required documentation.

Attention! An audit firm must be included in the federal register of audit organizations in order to obtain the right to be called such, and the employees of the firm performing the audit must have an audit certificate (Article 3 of Federal Law No. 307 and Article 4 of Federal Law No. 307 “On Auditing Activities”).

The review period is usually a calendar year . After signing the contract, the company’s employees begin the audit in the following order:

1. familiarization with the structure of the housing association and the peculiarities of conducting business activities;
2. study of financial and reporting documentation for the period selected for inspection;
3. comparison of the actual situation with planned indicators and identification of inconsistencies;
4. searching for causes of inconsistencies;
5. drawing up an audit report.

During the familiarization, the charter, accounting policies and the procedure for its implementation in a particular partnership are studied. If discrepancies between planned and calculated indicators , employees of the executing company begin checking the accounting statements and primary payment documents .

In particular, the compliance of the transactions used by the accountant of the housing association is checked for compliance with the plan of subaccounts of the Ministry of Finance .

Scheduled and unscheduled audits

The subject of verification activities carried out by control and supervision bodies is noted within the 11th paragraph of the Regulations on State. lived supervision No. 493 dated June 11, 2013. And in accordance with Federal Law No. 294 “On the Protection of the Rights of Legal Entities and Individual Entrepreneurs”, scheduled and unscheduled inspections can be carried out.

1. Scheduled inspections of HOAs are carried out on the basis of annual plans and schedules developed by state control bodies. Traditionally, these measures are carried out once per year, unless otherwise provided by regional legislation.
2. Unscheduled measures are carried out on the basis of the grounds provided for in Part 2 of Art. 10 Federal Law No. 294, as well as Part 4.2 of Art. 20 Housing Code of the Russian Federation.

Please note:
Both types of HOA inspections can be documentary and on-site. In any case, the time period for conducting them cannot be more than 20 working days.

Types of homeowners association reporting

The Partnership, acting as a responsible legal entity, undertakes to annually report on the results of its own activities. A request for a HOA report can be created not only by premises owners, but also by employees of higher authorities.

1. Internal reports . They are provided to the owners of the premises within the framework of the annual meeting held on the basis of Art. 45 of the Housing Code of the Russian Federation in the second quarter of the year following the reporting one.
2. Report of the chairman of the HOA. It is based on information about the work that has been done and on the fulfillment of the obligations established within the job description. Includes the preparation of estimates, control measures regarding the fulfillment of contract terms, accounting, tax reporting, hiring and dismissal of employees, etc.
3. Board report. This is necessary in order to provide the chairman with assistance and support in fulfilling his duties in managing the apartment building. Art. 151 of the Housing Code of the Russian Federation states that the management of the HOA has the right to dispose of collective funds on the basis of the approved budget.
4. External reports. As a non-profit organization, the partnership undertakes to comply with applicable laws by providing information about the results of its work. In particular, we are talking about fin. reporting (balance sheet, report on the intended use of funds), tax reporting, statistical reporting (on the number of employees, accounting measures).

IMPORTANT
Within the framework of clause 10 of Art. 161 of the Housing Code of the Russian Federation establishes an obligation to ensure open access to data on the activities of HOAs.

Who can request this procedure?

Who can check the activities of the HOA? to initiate an audit of the financial activities of the housing association :

• members of the audit commission;
• apartment owners and residents of a building belonging to an HOA;
• initiative group of partnership members;
• elected local government bodies;
• governing bodies.

The board of a housing association can order an audit from private auditing firms to identify and correct its own errors with little experience in financial activities , or with a large accounting staff to monitor its activities.

If there are suspicions or indirect facts of violations in the activities of the board, some of the owner-members of the partnership may create an initiative group to audit the activities of management. In this case, the audit is carried out, as a rule, by the participants of such a group themselves .

Attention! Each member of the housing association has the right to familiarize itself with all financial and reporting documents of the organization (clause 3, article 143.1 of the Housing Code of the Russian Federation).

If a resident of the house has suspicions that the management of the partnership is violating the legislation of the Russian Federation , then he can initiate a prosecutorial investigation by writing a corresponding complaint, regardless of his status as a resident (owner, tenant, etc.).

Elected authorities have the right to initiate parliamentary inspection of any legal entities, including housing associations, at the request of voters.

Inspection of HOAs by the Audit Commission

The Audit Commission is a permanently functioning elected body. Its task is to exercise control over the conduct of legal, financial, and economic activities of the homeowners’ association. In accordance with Art. 150 of the Housing Code of the Russian Federation, its creation for the implementation of control is mandatory. Legal regulation of activities is carried out on the basis of Chapter. 14 Legal status of HOA members, approved by the general meeting of members.

Attention

Any member of the HOA can be elected to the RC, but he must create a special letter of request.

HOA audit report

The document is drawn up by employees of the auditing organization. The text of the HOA audit report must necessarily contain the following data:

• name of the housing association;
• the time period during which the inspection was carried out;
• areas that were tested;
• errors and shortcomings identified during the event;
• possible ways to eliminate them.

The act acts as a confidential type of documentation and is drawn up in two copies, respectively, for the customer and the executor of the HOA inspection.

Inspection of HOAs by the tax office

Although the HOA is a non-profit organization, it is not exempt from replenishing the state treasury by paying taxes. In relation to homeowners' associations, as in relation to any legal entities, scheduled and unscheduled inspections (on-site and desk) may be carried out by the tax inspectorate. During their implementation, the tax reporting of the HOA is reconciled, errors and inconsistencies are identified in it, responsibility for errors or failure to provide papers is determined.

The purpose and objectives of the HOA

Nonprofit organizations exist primarily to provide assistance or resources to target audiences with special needs. They typically serve public purposes, such as enriching the lives of people in the community, and receive special considerations in terms of taxation, legal status, and accountability.

A nonprofit organization is mission-driven, which requires management and the board of directors to set goals aimed at achieving the organization's stated mission.

Strategic objectives focus on the services provided to its target market. This requires identifying the needs of the community concerned and developing programs and projects to meet those needs.

Audit of HOA

Before the audit procedure, all members of the HOA are notified of this. Any person interested in an audit and initiating it undertakes to undergo the following activities:

• familiarization with the main provisions of the charter document of the HOA;
• appointment of a meeting on the basis of which a set of verification works will be carried out;
• if necessary, raise an issue related to changing the procedures for assigning audits;
• familiarization with the final provisions provided by the professional auditor;
• organizing another meeting if any errors were found during the inspection, the deficiencies found will be discussed and certain decisions will be made.

Additional information
The procedures and other nuances of holding a general meeting of a homeowners’ association are reflected in the current legislation - Art. 145, 146 Housing Code of the Russian Federation.

Control methods

If doubts arise regarding the honesty of the chairmen of the partnership, a corresponding complaint should be sent to representatives of the competent authorities. The latter will conduct the necessary inspection of the HOA (audit). Based on its results, penalties will be applied to the organization.

How to conduct a self-check? You should start by contacting the audit committee. You will need to familiarize yourself with the following documents:

• Accounting department reports.
• Results of the last inventory carried out.
• Reports on completed work.

It is necessary to compare the information received and try to identify any discrepancies. If any work commissioned by the HOA was carried out by contractors, find out information about them through the Unified State Register of Legal Entities.

Cost of HOA audit

There are no specific tariffs for the cost of HOA audit services in the legislation or in any specific regulations. Each situation is subject to individual assessment and depends on the complexity and scope of the proposed activities. Traditionally, as practice shows, the size of the remuneration that auditors ask for is in the range from 25 to 70 thousand rubles. An important role is played by the urgency of the implementation of measures and the qualification level of the expert.

Homeowners association inspection by housing inspection

The State Housing Inspectorate is an independently functioning structural unit of the system of executive authorities. The purpose of its existence is full and comprehensive control over the observance and provision of the rights and interests of citizens in the course of providing housing and communal services to the population.

In relation to HOAs, the housing estate has an extensive list of powers:

• carrying out scheduled inspections and activities at the request of residents;
• control of the appropriate fulfillment of the obligations of the HOA in relation to the operation of the housing stock;
• verification activities regarding documents and conducting a full analysis;
• monitoring the general condition of an apartment building and the territory adjacent to it;
• carrying out administrative work for legal support of a number of technical aspects.

The entire list of powers that this structure has is contained in Government Decree No. 493 of June 11, 2013.

What to do if you don't fulfill your duties

If a conflict arises with the chairman, it is recommended to attempt a peaceful resolution of the dispute. To do this, residents need to draw up a collective appeal with demands.

In order for the claim to be justified, evidence (witness testimony, video or photographs) must be attached to the documents.

Sample complaint against HOA

If the residents' request was not satisfied, then a procedure for re-electing the head is carried out. For this purpose, evidence of the chairman’s incompetence is collected. It is possible to organize an independent audit, to which the head is obliged to submit. Based on its results, a decision will be made on the effectiveness of the person’s work.

In addition to the general meeting, it is possible to file a statement of claim in court to receive compensation for damage caused.

Scheduled inspection of HOAs of municipal housing control

Federal Law No. 93 of June 25, 2012 “On Amendments to Legislative Acts of the Russian Federation” related to issues of state supervision introduced the concept of municipal housing control. It is usually understood as the activities of local bodies that have the authority to organize and carry out inspections on the territory of certain entities to ensure that legal entities comply with the norms of the Housing Code and other legislation. In Art. Section 4 of this document describes the procedure for implementing control measures. The basic standards of implementation are reflected in Federal Law No. 294 “On the protection of the rights of legal entities and individual entrepreneurs” and Art. 20 Housing Code of the Russian Federation.

Responsibility

Neglect of official duties, as well as participation in money fraud and fraud entail the imposition on the citizen of responsibility prescribed in the HOA Charter. Both administrative and criminal penalties are possible.

1. For excesses. The degree of punishment depends on the specifics of the violation. Misappropriation of funds will result in criminal liability. If a person without authority sent documents for consideration, then his request will not be granted, but no penalties will follow. If, due to the fault of a person, damage was caused to the residents of the apartment building, the chairman will be obliged to compensate for it: civil liability is imposed.
2. Inaction. In case of neglect of one's obligations, disciplinary liability is imposed on the person. If, as a result of inaction, damage was caused to the residents of the apartment building, the citizen will be obliged to compensate for it.

Unscheduled inspection

If the Housing Inspectorate or another body has received information that requires verification in the form of an appeal or application, this indicates that the process of unscheduled inspection activities regarding the HOA will soon begin. An unscheduled inspection of the HOA can be carried out in the following situations:

• when the regulatory authority does not have sufficient information about the person who committed the violation;
• if there is not sufficient data on the fact of violation of mandatory requirements.

There is no need to prepare any documents in advance to prepare for this procedure. The inspector may request only some clarifications - additional materials and information. If during the preliminary inspection violations are identified, they will be followed by unscheduled work, which is prescribed in parts 3.2 and 3.3 of Art. 10 Federal Law No. 294.

How to check the work of the housing and communal services management company of an apartment building?

If there are suspicions that the management company is conducting its settlements with homeowners dishonestly and fulfilling its duties in bad faith, then it can always be checked, including for theft.

Ensuring the fulfillment of the obligations of the management organization is within your power! Citizens are granted this right by law. Let us note a very important point - a collective appeal always has greater power than an individual appeal .

Therefore, if the need for such a check arises, it is better to act together. Do not forget that a service agreement is concluded with each owner.

This leads to the conclusion that any errors in calculations or negligent performance of one’s duties are a violation of the terms of the contract . And you need to be responsible for this.

Next, we will try to describe step by step what actions you need to take to check your management company.

Information request

Let's study the calculation of mandatory payments for utilities. To do this, we will request documentation from the management company containing a list of tariffs and their amounts.

The company is obliged to provide such information to the owner upon first request. But, as we have already said, it is better to act together. Therefore, on behalf of the homeowners, a statement is written demanding to provide the necessary information. Read more about the procedure for providing information and submitting an application here.

To know and understand how to deal with an unscrupulous management company, it is worth studying the specifics of the work of this organization. To do this, we have prepared a number of informative articles:

• competition for the selection of management companies;
• how the management agreement is concluded;
• responsibility to owners;
• advantages and disadvantages of management company;
• communication between management companies and resource supply organizations;
• various acts in reporting;
• obtaining and revoking a license;
• bankruptcy of the management company;
• What should debtors do if the Criminal Code has changed?

Data checking

We check the correctness of the calculations and their validity. If questions arise related to accruals, we require the Criminal Code to justify them in writing. You can check the calculations yourself; it is possible that there are people in the house with both legal and economic education.

If there are none, you can contact third-party experts to verify the data provided by the management company . This, of course, is an additional expense, but, more often than not, the costs of experts pay off. After the tariff analysis has been carried out, we move on to the next stage.

Revision of contractual obligations

It is necessary to check how the management company carries out the work stipulated by the contract. To do this, we again demand that the management company provide homeowners with a report on the work done.

In addition to reports, it is worth requesting attachments to them, cost estimates and other similar documentation. From these documents you can find out where and how the funds were spent. Outside experts can again be involved in the analysis.

An expert licensed to conduct such examinations, having completed the analysis, will prepare and transmit its results to the owners in writing. This document will describe in detail where and how the Criminal Code cheated and what exactly it violated.

In addition, the document will be recorded by an official, and this is a very strong argument, both in pre-trial proceedings with the Criminal Code and in the court itself.

There is no need to remind you that before starting the analysis of documents, you need to remember all the work carried out in the house . If they were discussed at a general meeting or someone kept a record of them, even better.

Appeal to control authorities or court

If it turns out that the management company is working carelessly, does not fulfill its obligations, in addition, inflates tariffs, volumes of work, charges for work not completed, and the like, then you can immediately file a claim in court.

It should be noted that in cases of this kind it is better to use the services of a lawyer . Both in the legislation itself and in preparing a claim, there are many pitfalls, and if your interests are represented by a professional, the chances of success will increase significantly. You shouldn’t skimp on paying for a lawyer’s services; all costs will pay off in the end.

For defrauded residents, contacting the Housing Inspectorate and Potrebnadzor after completing the analysis is the most profitable option. In the end, it is their direct responsibility to deal with dishonest and careless performers.

To begin the proceedings, you must write an application to these organizations in two copies. We keep a copy for ourselves.

The Criminal Code appoints an inspection of all economic and financial activities , after which the inspection authorities draw conclusions. If violations are confirmed, the Criminal Code will be forced to reimburse citizens for illegal fees without trial. If residents are dissatisfied with the decision, they can go to court.

Inspection of HOA by the prosecutor's office

Conducting inspections of the HOA by the prosecutor's office is an extreme measure that takes place after violations are identified. The most serious consequence of such an inspection is the liquidation of the HOA and bringing it to criminal and administrative liability. According to Art. 141 of the Housing Code of the Russian Federation, the liquidation of an HOA is carried out within the framework of the procedure established by the Civil Code.

Attention

Based on Art. 61 of the Civil Code of the Russian Federation, an HOA is subject to liquidation by the court if there are violations of the law of a particularly gross nature that are irreparable. Prosecutors, in the course of discovering such phenomena, make an appeal to the court with appropriate statements of claim for the liquidation of the HOA.

Requirements for the chairman of the HOA

The main constant requirement for a candidate is to own an apartment in a given building. Advantages are given to persons who have received a higher education and also have experience in management.

Chairman of the HOA

Among personal qualities, comprehensive development, the ability to achieve goals, and knowledge of human psychology are welcomed. The chairman must be distinguished by good health and the ability to resolve conflicts both with residents of the house and with government organizations.

Important! The position of chairman implies a high moral burden: a citizen must be able to protect the interests of residents within the framework of the law and resist public opinion.

When does the HOA bankruptcy procedure begin?

Bankruptcy is one of the forms of liquidation of an HOA. The right to recognize the fact that the partnership is unable to fulfill its immediate responsibilities rests exclusively with the arbitration court during the investigation. The interim manager analyzes financial and economic activities, holds meetings with counterparties and determines the source of the debt, and then draws up a report, the purpose of which is to identify ways to improve the financial situation. The main reason for bankruptcy is the debts of the HOA to the RSO and the impossibility of solving the problem on its own.

Who is the chairman of the HOA: how is he elected and removed from office?

The creation of a partnership occurs only on the initiative of the residents of the house or land owners in order to organize the management of collective property.
Like any institution, an HOA has employees and a chairman. Any of the property owners has the right to become the head of the partnership. To do this, a citizen must join the HOA and be elected to the board. It is at the meeting of owners that the issues brought up for discussion are resolved, and one of the participants is vested with the rights of chairman as a result of voting.

Important! The decision to elect a citizen is valid if a majority of votes were cast for him, and more than 50% of the HOA members were present at the meeting. The chairman must serve for a period of 2 years.

Removal from the post of head is possible both voluntarily and compulsorily. The main reasons for resigning from a post by the personal decision of the chairman:

• health status;
• changing of the living place;
• personal circumstances.

When voluntarily withdrawing his candidacy from office, a citizen is obliged to notify residents of his decision. In this case, the procedure for electing a new chairman will take place as usual.

Compulsory dismissal from office is carried out for the following reasons:

• the person does not fulfill his duties, ignores requests from residents;
• there is evidence of abuse of power (wasting general funds for personal needs, extortion);
• appropriation of public property;
• carrying out financial fraud.

Both the residents of the house and the tax or housing inspectorate have the right to remove the chairman from the post. To carry out the procedure, it is necessary to provide a package of documents proving the citizen’s guilt.

Important! Removal from office occurs through re-election or through appeal to the courts.

When re-electing themselves, members of the partnership are required to collect evidence of the chairman’s guilt, and then hold a vote to select another candidate for the position.

The meeting will take place if more than 50% of homeowners are present. Candidates must introduce themselves before voting.

When re-electing the chairman, the members of the partnership must fill out the appropriate protocol and send them to the tax and housing inspectorates for re-registration of the constituent documents.