With the U.S. housing market continuing to confront the significant supply shortage of homes for sale, condos may play an important role in narrowing the supply gap of affordable housing options1. While condos represent nearly 10 percent of the mortgage market, they often play a larger role in many metropolitan areas2. Condos also present unique […]
Three Steps to Simplified HOA Financing
When your association is looking for financing to improve common areas, add a playground, tackle deferred maintenance, or make emergency repairs, here are three steps your community association can take to simplify the financing process. Read the article……………………………….
HOA Q&A: What are our options when common area renovations become unwieldy? (FL)
Q: My condominium association is undergoing a large common area renovation. At the beginning of the project, the Board and the management company announced that we had enough reserves and other operating funds to undertake the renovation without a special assessment. Read the Q&A…………………………………
New law improves online protections for homeowners (NV)
This is the first of two columns by Las Vegas attorney Adam H. Clarkson. Today, he addresses Senate Bill 378, which imposes cybersecurity insurance and data protection requirements for homeowners associations’ online assessment payment processors. Next week, he will address what the new law says about email notices. Read the article………………………..
Navigating the topsy turvy process for major condo association restoration projects (FL)
On June 9, 2023, Gov. Ron DeSantis signed into law Senate Bill 154 (SB 154), which seeks to address select issues from the Florida Condominium Act, SB 4D. All of these measures are intended to mitigate and prevent potentially devastating incidents, including building collapses. Condominium safety laws center around inspection requirements, mandatory reserves and more […]
Weighing the pros and cons of HOAs taking out loans (CT)
In every homeowners association (HOA) community, unexpected expenses such as large repairs or renovations can arise. When these situations occur, it may be necessary for the HOA to look for outside financing to cover the costs. Read the article………………………..
Association Borrowing Questioned (FL)
Q: The board of directors of my condominium association has been discussing taking out a loan to pay for major repairs to our condominium building. To my knowledge, our association has never borrowed money before. It seems to me that for such a serious undertaking, a vote of our owners should be required. Is a […]
Bank Loans for Capital Improvements (CT)
More often than not, it seems community associations find that, despite their best efforts, they are often short on funds when it comes to tackling major repairs and capital improvements. An entire division of the banking industry has now entered the business of lending money to community associations so that they can complete these needed […]
Congress Introduces Making Condos Safer and Affordable Act of 2023
On the eve of the 2nd anniversary of the deadly Surfside building tragedy, U.S. Representatives Debbie Wasserman Schultz (FL-25) and Bill Posey (FL-08) today introduced the bipartisan Making Condos Safer and Affordable Act of 2023 to provide comprehensive condo relief that would expand and ensure access to public and private loans for structural and safety […]
Safeguarding Association Assets in Turbulent Financial Times (OH)
As George Bailey explained to the frightened citizens of Bedford Falls trying to withdraw their savings in the film It’s a Wonderful Life, “The money’s not here. Your money’s in Joe’s house. And in the Kennedy house, and Mrs. Macklin’s house, and a hundred others.” He might not have known it, but George was describing […]
Safeguarding Association Assets in Turbulent Financial Times (OH)
As George Bailey explained to the frightened citizens of Bedford Falls trying to withdraw their savings in the film It’s a Wonderful Life, “The money’s not here. Your money’s in Joe’s house. And in the Kennedy house, and Mrs. Macklin’s house, and a hundred others.” Read the article………………………..
Underfunded Reserves? How your Condominium Association Can Qualify for a Community Association Loan (MI)
Nearly 2 years after the Surfside collapse, the New York Times recently reported that a 35-unit condominium in North Bay Village, Florida was ordered to be evacuated after an engineer deemed the condominium to be structurally unsound. The engineering report provided to North Bay Village officials indicated that the Majestic Isle Condominium had serious structural […]
When condo corporations borrow money (ON)
The directors of a condominium corporation sometimes determine that it’s in the best interest of the corporation to borrow money for purposes related to its affairs. Often, borrowing money is seen as a more palatable alternative to issuing a special assessment where repairs to the common elements are required and there is insufficient money in […]
Co-op and Condo Boards Are Wondering: Is Our Money Safe?
In the wake of the second- and third-largest bank collapses in U.S. history — and the ensuing tumble of stock markets around the world — jittery co-op and condo boards in New York City are asking a chilling question: Is our money safe? Read the article………………………..
Condo Board Wrestles With Ways to Pay for $7 a Million Facade Project (NY)
We’re working with a high-rise, 300-unit condo that needs about $7 million for facade work. At the moment, interest rates are increasing, so banks would probably offer them a 10- to 15-year loan at about 4.5%, maybe 5%. So the association’s monthly mortgage installment would be about $72,500, which would then be spread among all […]
Need More Money for Your Association? Here’s How to Get It! (CO)
Last month I had the privilege of teaching the webinar “Help We Need More Money,” which was all about generating more income for associations. Whether an association needs more money because it has unexpected repairs, or insurance costs have quadrupled, or just due to inflation and other uncontrollable costs, many boards fall into the rhythm […]
Managing Cashflow for Community Associations
The highest use of a community association manager is as an experienced, certified professional who eases the burden on volunteer board members with expert guidance and hands-on management of administrative, financial and maintenance tasks. Read the article………………………..
How Much Money Is Recommended to Keep in a HOA or Condo Operating Bank Account
We frequently are asked about how much money is recommended to keep in a HOA or Condo operating bank account. The answer varies as each HOA is unique (different sizes, different structures and amenities) and so has different financial needs. However, there are some rules of thumb and principles to keep in mind when you […]
Condo Q&A: Checks should be signed by two officers whenever possible (FL)
Question: Under the condominium law, who can sign checks? Read the Q&A……………………………….
Association Loans Explained (FL)
Q: The board of directors of my condominium association has stated they are considering major restoration projects soon and have stated that they are considering a loan from a bank to fund part the projects. While nothing has been decided, the board has mentioned that considering a loan to pay for the work. Does the […]
Sample Reserve Investment Policy
Reserve Investment Policy For XYZ Homeowners Association. For Fiscal Year 20XX. Provided as a courtesy by Association Reserves. Please customize as appropriate and review with appropriate legal and accounting professional counsel Read the article………………………..
Homeowner Association Borrowing
Older HOAs tend to borrow more money than newer HOAs. For the same reasons any homeowner who owns an older home, is more likely to borrow money to renovate, repair or replace major elements of the home, HOAs are also faced with the need to borrow money. Read the article……………………..
Associations and Loans—Are You Doing It Right? (CO)
Whether your community needs to borrow money to pay for a roof replacement or installation of a swimming pool, it is imperative to know all the requirements and limitations your community has before starting the process. Therefore, the first step an association should take prior to applying for a loan is reaching out to its […]
Condominium Association/HOA Financing Options for Major Projects (MI)
Things fall apart. While in an ideal world, residential associations will have adequate reserves set aside to pay for repair and replacement of big-ticket items for which they have responsibility—things like pavement projects, roof replacement, siding replacement, etc., the reality is that, for whatever reason, when the time comes to replace roads or roofs, communities […]
How to Easily Update Your Community’s Investment Policy (NJ)
The Coronavirus pandemic has been with us for almost two years and its impact on the financial market has many community associations asking: “how can we reasonably obtain a greater return on our capital reserve fund investments?” Read the entire article……………………………….
HOA Homefront – How should we invest HOA funds? (CA)
Q: HOAs face a financial issue with interest rates so low. My HOA and the vast majority of other HOAs play it safe with CDs and money market accounts for investment. I am opposed to this. Now that we are averaging something well below 1.5%, the risk to HOAs is enormous. Read the entire article……………………………….
Ensuring a Smooth Fiscal Transition (GA)
All over Georgia, new “volunteers” are preparing to take their seats on an HOA or community association board of directions. Most boards have some, if not a majority, or seats turn over each year, with new board members voted in at annual association meetings. Read the entire article……………………………….
Security Tips for Managing the Association’s Bank Accounts Online (FL)
Increasing numbers of people and small businesses, including community associations, have switched to managing their bank accounts exclusively over the internet. Not surprisingly, these numbers surged even higher during the pandemic. While online banking has become common place, so have incidents of cybercrime and fraud. Banks of course use a variety of security measures to […]
The association suddenly needs a lot of money. How do you get it? Which way makes sense? (FL)
So many of our buildings are approaching the 40 year mark, requiring recertification in electrical and structural. Many buildings are younger yet still need major repairs to the concrete, balconies, pool decks and other portions of the common elements. The board is going to need a lot of money. Assuming you don’t have enough in […]
Basics of an Association’s Investment Policy (CO)
Boards of directors and community managers rely on policies and procedures to guide community operations. The governing documents serve as the law of the land and the policies provide the roadmap. Each area of community operations likely has a corresponding policy to see that the board can make decisions fairly and efficiently. Just as covenant […]
Time to Borrow
A few days ago several of my community manager colleagues and I were talking about how several of their associations had a great deal of deferred maintenance and were concerned about the cost to have it completed. We started talking about borrowing the money for the repairs. One of the managers was the on-site manager […]
In Case of Emergency: 5 Funding Factors in Community Association Finances
Underfunded community associations can be at risk of falling behind on much-needed repair, restoration, or replacement. Read the entire article……………………………….
Can Your Community Association Access Money in a CD Before the Maturity Date?
Condominium associations and HOAs often amass sizeable amounts of cash in their Reserve Funds. The Board is charged with safeguarding those assets and investing only in conservative vehicles. The Certificate of Deposit, better known as a CD, has long been the instrument of choice for investing association funds. The interest on the money is desirable […]
What Do Banks Look for When Lending to Condominium Associations and HOAs?
There are times when a condominium association or HOA absolutely needs more money than what is readily available in the association’s bank account. Unexpected losses, inadequate Reserve Funds, lawsuits, and more can lead an association to seek additional funds. If a Special Assessment seems unlikely, and HOA loan or a condominium association loan is the […]
Anatomy of a Condo Loan – One Building’s Case Study (NY)
As we’ve reported in previous articles, special assessments are not the only tool condo associations and HOAs have to finance common area improvements and major repairs when needed; there are also loans available in the marketplace to help communities pay for big-ticket projects. Read the article……………………………….
Should Your HOA Take An HOA Loan Or Not?
Homeowners associations rely on a constant stream of funds in the form of assessments to cover the community’s operating expenses. But, there might come a time when this stream is interrupted for whatever reason, necessitating an HOA loan. Read the article………………………………….
Secure Online Payment Options Are A Must-Have For HOA Members (NC)
Though providing homeowners with the option to pay their HOA assessments online certainly isn’t a new concept, recent world events such as the COVID-19 pandemic have driven home just how essential electronic payment options are. Allowing association members to pay their assessments securely through owner portals using Automatic Draft, Credit Cards, or E-Checks not only […]
The rainy day is coming. Are you ready? (NH)
As a board, you’ve come to the long dawning realization that you can’t put off replacing the rot around windows, the failing roofs, the cracked and pothole filled parking lot and other needed repairs that have turned your once lovely association into something closer to a third world country. It’s time to get the work […]
How the New Condo Rule is Playing Out for Reverse Mortgage Lenders
In late 2019, the Department of Housing and Urban Development issued new condominium guidelines that aimed to make it easier for single units to be approved for Federal Housing Administration (FHA) financing. This included transactions under the Home Equity Conversion Mortgage (HECM) program. Read the article…………………………..
Association Loans/Lines of Credit
In this time of growing financial crises, associations are increasingly considering loans/lines of credit in order to have sufficient cashflow in the event of budget shortfalls caused by increasing delinquencies or in order to pay for projects that cannot be funded through the operating budget alone but cannot be postponed. Read the article……………………………
Unexpected Expenses? – A community loan may be the solution (CO)
Whether it be an unexpected repair or an insurance deductible, homeowners associations are more commonly turning to lenders for community association loans. This is especially true for condominium associations who may be facing large insurance deductibles related to hail damage. Read the article…………………………….
Condo advice: What’s the best loan for condominium renovations? (FL)
Q: Our condominium board wants to renovate our lobby and amenities but the cost would require a loan. The owners are concerned about repayment options. Do you have any recommendations on how to borrow for this purpose? Read the Q&A………………………….
Benefits of Funding Capital Improvements for HOA Associations
HOAs need to be prepared for any unexpected expenses that come their way. At times, HOAs are not as organized with their finances as they should be. For this reason, many HOAs have issues related to financing any unexpected repairs that they are required to make. What happens as a result is this financial burden […]
Safeguarding Association Reserve Funds over $250,000.00 (OH)
Since the passage of the Ohio Condominium Act in 2004 and the Ohio Planned Community Act in 2010, Ohio’s community associations have been building reserve funds to repair and replace major capital items without the need for special assessments. Fortunately, many associations have built substantial reserve funds and are now more financially sound than ever. […]
Association Loans: What You Need to Know (NC)
Previous posts have looked at options for associations that are in need of money If your association has explored and rejected other possibilities (increased assessments, reserves, special assessment, etc.), a loan may be the best prospect. Questions about whether the loan is a good idea or whether the association will be able to pay back the […]
HOA and Condo Online Banking Tools for Board Members
A key part of financial transparency is access to banking information. We selected one of the few national banks that specializes in HOAs and Condo banking. We use this bank to provide operating accounts since as they interface with our accounting systems to provide online payments and checks mailed directly to the bank’s lockbox (a […]
Understanding HOA Bank Statements
HOA bank statements are just as they sound: a statement from the bank showing all deposits and withdraws from each association account over a certain period of time. The most effective way to prevent fraud within your community association is to keep a close eye on bank statements. Most associations have at least two accounts: […]