Connecticut unit owners get a court route to an independent audit of association books
Connecticut unit owners get a court route to an independent audit of association books
2026-09-09 · Connecticut · Legislation
Owners holding at least twenty per cent of the votes in a Connecticut common interest community can now ask a judge to order an independent audit of their association's financial records. The new right is Section 1 of Public Act 26-31, approved May 27, 2026 and effective October 1, 2026.1
It is the first Connecticut statute to give unit owners a direct judicial remedy aimed at suspected financial misconduct inside their own association. It is also narrower than the headline suggests: the act builds four conditions into the petition, and one of them has to be satisfied before an owner ever reaches the courthouse.
What the new section does
Section 1 is a new, free-standing section rather than an amendment to the Common Interest Ownership Act. It opens with language that overrides the community's own documents:
“Notwithstanding any provision of the declaration or bylaws to the contrary and except as provided in subsection (c) of section 47-260 of the general statutes, any group of unit owners of units to which at least twenty per cent of the votes in the association are allocated pursuant to the declaration may petition the Superior Court for an order directing such association to retain an independent third party to conduct an audit of such association's financial records.”1
The records reachable are those the association must already keep under § 47-260(a) — the same body of documents that governs ordinary records inspection — limited to those “related to such association's expenditures and any other financial matters.”
A petitioning group must satisfy all four conditions in subsection (a). They must certify in writing a good faith belief in grounds for an audit; obtain the accountant's opinion described below; certify their twenty per cent holding and attach a certified copy of the vote allocation from the recorded declaration; and establish that no such audit has been completed in the preceding twelve months.2
The accountant's opinion is the real gate
Condition two is the one that decides most cases, and it is demanding. The group must obtain
“a signed opinion of an independent certified public accountant who specializes in fraud or financial forensics that there appears to be evidence of financial fraud or misuse of such association's funds. Such signed opinion shall identify the basis for the formation of such opinion.”1
Two things follow from that sentence. The accountant must be a specialist — not any CPA — and the opinion must be reasoned, not conclusory. And the owners must obtain it before filing, which means paying for a forensic review of whatever records they already have, at their own cost, with no assurance the petition will be granted.
The threshold doubled on the way through
This is the second attempt. In the 2025 long session the same measure ran as House Bill 7068, under the identical title, and it set the petitioning threshold at ten per cent of the association's votes rather than twenty. That version cleared the Insurance and Real Estate Committee, was re-referred to Judiciary, won a joint favourable report on April 7, 2025 and reached the House calendar as File No. 749 on April 23, 2025 — where it was never called, and died at adjournment.5
The 2026 bill that passed carries the doubled threshold. In a community of 200 units, the difference is between assembling 20 owners and assembling 40.
Which records an audit reaches, and which it cannot
The act does not create a new category of disclosure. It borrows the existing § 47-260(a) retention list, so a granted petition reaches, among other things, detailed records of receipts and expenditures including reserve account records, minutes of owner and board meetings other than executive sessions, financial statements and tax returns for the past three years, copies of current contracts to which the association is a party, and records of board or committee action approving or denying architectural requests.2
The carve-out matters as much. Section 1 is expressly subject to § 47-260(c), the withholding provision, so an audit ordered under this act does not reach personnel, salary and medical records absent the subject's waiver; unredacted ballots, proxies and other records identifying how an owner voted; or information whose disclosure would violate a law outside CIOA.2
The money runs against the petitioners — three ways
This is the part boards and owners will feel, and it is worth reading in the order the act sets it out.
Subsection (b): the petitioners fund the audit. “Any expenses associated with the completion of an audit by an independent third party of an association's financial records pursuant to the provisions of subsection (a) of this section shall be paid for by the group of unit owners who filed such petition.” There is no provision shifting that cost to the association if the audit finds something.
Subsection (c): the association may charge for producing the records. An association, or a community association manager providing management services to it, “may charge a reasonable fee to the group of unit owners for providing such association's financial records to an independent third party.” The act ties “association management services” and “community association manager” to the definitions in § 20-450.
Subsection (d): the association may recover its attorney's fees. “Any association may be entitled to reasonable attorney's fees incurred by the association pursuant to the provisions of this section.” The Office of Legislative Research read this as fees “presumably paid for by the group of unit owners.”2
Read together, the three subsections put the entire financial risk of an unsuccessful petition on the owners who bring it, on top of the forensic opinion they had to buy to file at all. That is a deliberate design choice, and it is the answer to the objection that a right like this invites harassment of volunteer boards.
What boards and managers face before October 1
Nothing in the act requires an association to do anything until a petition arrives. But two pieces of preparation are cheap and follow directly from the text.
Know whether your § 47-260(a) records are actually complete. The audit reaches the retention list, and a gap in that list is discoverable in the proceeding. Associations that have never tested their own compliance with the retention statute will be doing so under time pressure.
Fix the ordinary inspection process first. The statutory precondition is an accountant's opinion that there “appears to be evidence” of fraud or misuse. Owners who can get straight answers through routine records requests and a legible annual budget rarely reach a forensic accountant at all. The most reliable defence against a petition is that there was never a reason to consult one.
What to watch next
Three questions are open on the face of the act and will be answered, if at all, by Superior Court practice after October 1.
The first is what the court actually weighs. Subsection (a) says a qualifying group “may petition” and lists conditions the group must satisfy, but it does not say the court “shall” order the audit once they are met. Whether the four conditions are a threshold followed by judicial discretion, or a checklist that entitles the group to the order, is not resolved in the text.
The second is the scope of subsection (d). “May be entitled to reasonable attorney's fees” does not say whether the association recovers when it loses, and Connecticut's ordinary rule is that each side bears its own fees absent a clear contrary provision.
The third is how the twelve-month bar is counted where an audit is ordered but not completed, or completed in part. The condition is worded around an audit “completed” in the preceding twelve months, which leaves an abandoned or obstructed audit in an undefined position.
Related Connecticut HOA Topics
- Public Act No. 26-31 (Substitute House Bill No. 5265), full enrolled text, Connecticut General Assembly — approved May 27, 2026 ↩
- OLR Bill Analysis, sHB 5265, Office of Legislative Research, Connecticut General Assembly ↩
- HB 5265 bill status and history, Connecticut General Assembly ↩
- 2026 Acts Affecting Housing and Real Estate, OLR Report 2026-R-0090 (June 15, 2026) ↩
- HB 7068 (2025) bill status and history — the 10% predecessor that died on the House calendar, Connecticut General Assembly ↩
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