Management Liability - Owners Association Law of Apartments - Accounting Records

One of my clients, is a board member of a Owners Association,  has been involved in a court case that encourages me to bring this subject in question to reach a wider audience.

The Turkish Court in question decided that the elected directors of an association of owners have acted criminally reprehensible because they have not properly kept and closed accounting books of the owners' association, officially. Which means that the accounting records has to be closed and approved by a Public Notary in Turkey.

This concerns the formal conclusion of the official books of an association of owners in accordance with Article 36 of the Law on Apartments. Article 36 of this Act stipulates that a director of an association is obliged to keep all official records of the association, such as the agreements, the expenses, the meeting invitations, the powers of attorney and all the briefings with data and overview in time order in an official notarized legalized book that must be closed and approved by a Public Notary at the end of each calendar year. This accounting records are in a separate book (Gelir Gider Defteri) than the official decision book (Karar Defteri) in which the decisions of the association are included.

A board member at an Association of Owners is usually an unpaid job. Voluntary work, unless the members decide otherwise. The nomination for a board position takes place at the time of the annual general members meeting. An association is obliged to meet at least once every year. A director must be appointed by an advanced majority of votes. An advanced majority consists of majority in shareholding as well as majority in the number of members present. A director can only be appointed for a period of maximum one (1) year. The board of an association consists of one or three members. (not 2 or 4).

The appointed board (members) are responsible for correctly recording the accounting records. The administration must be kept in time in a Notary legalized administration book (Gelir Gider Defteri).

The administration book has to be closed and approved by the Public Notary in Turkey at the end of each calendar year. 
When the assembly is closing the year in f.e. April or September. Then the financial year is ending in April or September, before the General Assembly occurs.

Even when the financial activities of the Owners Association are delegated to a third party like a Home Management Company, the appointed board (members) remains responsible for correctly keeping and closing the books.

My advice is make sure that you get a good advice before you enter into a director / board member position as a foreigner. It saves you a lot of headaches at the end.