Q&A: Is Audited Budget Required?

Q Does corporate law require that co-ops have an annual audited financial budget for shareholders?

—Budgeter in Brooklyn

A “The law imposes no such requirement on co-op apartment corporations,” says Thomas E. Kass, a partner at the New York-based Kantor, Davidoff, Wolfe, Mandelker, Twomey & Gallanty, P.C. “Budgets generally represent an estimate of expected expenses in the future and may be based on past financial statements which may in fact have been audited. Audited financial statements for co-op apartment corporations are not required under the law; however, such a requirement may be imposed by the corporation's mortgage and/or its bylaws. If not, such a requirement could be imposed on the corporation by its shareholders who have the power to amend the bylaws.”

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