[The following paragraph is effective on December 15, 2025. See PCAOB Release No. 2024-005. The paragraph effective before December 15, 2025 can be found here.]

31.    Performance of Services for Common Interest Realty Associations (CIRAs), Including Cooperatives, Condominium Associations, Planned Unit Developments, Homeowners Associations, and Timeshare Developments

.061
Question—A member belongs to a common interest realty association (CIRA) as the result of the ownership or lease of real estate. Would independence be considered to be impaired with respect to the CIRA?

.062
Answer—Independence would be considered to be impaired if a covered member was a member of a CIRA unless all of the following conditions are met:

  1. The CIRA performs functions similar to local governments, such as public safety, road maintenance, and utilities.
  2. The covered member's annual assessment is not material to either the covered member or the CIRA's operating budgeted assessments.
  3. The liquidation of the CIRA or the sale of common assets would not result in a distribution to the covered member.
  4. The CIRA's creditors would not have recourse to the covered member's assets if the CIRA became insolvent.

[Revised, effective June 30, 1990, by the Professional Ethics Executive Committee. Revised, July 2002, to reflect conforming changes necessary due to the revision of interpretation 101-1.] 

Also see interpretation 101-1.C [ET section 101.02] for additional restrictions related to associations with a client. 

[Revised, effective May 31, 1998, by the Professional Ethics Executive Committee. Revised, July 2002, to reflect conforming changes necessary due to the revision of interpretation 101-1.]