Keep Track of the Money: Finance and Condos

Money is a top-of-mind topic for condos. Following the money is hard without good policies and procedures. This blog fills the gap on financial policy.   Read the article………………………..

What Every Board Member Should Know About Financial Reports

Managing and overseeing an association’s finances is one of the board’s most important responsibilities. To successfully fulfill this duty and sustain the financial well-being of your community, you must understand financial reports and their importance to the success of your association. Read on to learn everything you need to know about financial reports.   Read the […]

Condo Conversations: The dreaded special assessment

Has your stomach ever dropped when you opened the envelope from your homeowners association and saw the words “special assessment?” If so, you’re not alone.  Special assessments can be scary creatures, and anyone who lives in a condo community dreads receiving one. Let’s take a little bit to explore what special assessments are, why they […]

Fourth Court of Appeals denies motion to withhold finances (TX)

The La Bota homeowners Association was ordered by District Judge Joe Lopez to release all financial information including expenses regarding association fees.  However, the association fought that ruling by filing an appeal with the Fourth Court of Appeals.     Read the article……………………….

Community Association Keys to Financial Success

Pretty much every community association starts out financially sound. The common areas, amenities and building are shiny and new, and the developer maintains everything. Then the developer turns over the community to the residents, time passes, board members come and go, and the community starts to age. The real challenge is to maintain that financial […]

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 […]

What if an HOA has questionable finances? (OR)

I’m looking at investment property in a subdivision with a homeowners association (HOA). A friend recently bought a home in the same subdivision and (the) lender required a review of HOA documents. These documents turned out to be in a significant state of disarray, which delayed the closing process.  Should this concern me? How big […]

The Complete Guide to HOA Financial Statements

Managing the finances of a community association is one of the most difficult, and most important, responsibilities of an HOA board of directors. Preparing detailed HOA Financial Statements on a regular basis serves a multitude of purposes from providing insight for financial planning, promoting transparency between the board and residents, as well as being 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: […]

Understanding an HOA General Ledger

The foundation to all HOA accounting is the general ledger. Much like your checkbook at home, the HOA general ledger keeps an ongoing record of all transactions made by the community association. All other financial statements such as the balance sheet, income statement, and statement of receivables are created based on the ledger.     Read […]

What is an HOA Income Statement?

Unlike a balance sheet which shows a quick snapshot of HOA finances at a certain point, the income statement shows financial information over a period of time. Usually, the period of time is the rate at which you prepare your financial documents whether it be monthly, quarterly, or annually.  The income statement is considered the […]

What is an HOA Statement of Receivables?

A statement of receivables, or accounts receivable statement, is a document that details the outstanding charges owed to the community association. This can be from sources such as overdue dues, vendor credits, late fees, or any other outstanding source of income. It is essentially a list of every account that still owes the HOA money. Read […]

How To Understand Your HOA Balance Sheet

The balance sheet in your HOA financial statement is the quickest and easiest way to get a feel for the financial strength of your community association. There are three parts to a balance sheet: assets, liabilities, and equity.   Read the article……………………..

Facing Financial Mismanagement: When Boards or Managers Are at Fault (NY)

The board of a building or community association has a fiduciary duty to uphold its community’s governing documents, act in good faith, and advance the interests of the community at large. Occasionally, boards fail to carry out this duty – sometimes through mismanagement and poor decision making, and sometimes through willful disregard for the association’s […]

Special Assessments in Condo (FL)

Special assessments happen. The unfortunate reality is that during the life of a condominium building some unexpected expenses are going to arise and the association must take steps to fulfill its obligations to the membership. If the operating budget cannot handle these expenses, and there is not a funded reserve account which can dray the […]

Financial Management of Community Associations | Assessments

What is an Assessment? An assessment (sometimes referred to as a Maintenance Fee) is an Owner’s financial obligation to a community association during a given period of time (typically one year). It covers the owner’s share of the common expenses. An annual assessment may be paid on a monthly, quarterly or annual basis. An assessment […]

Association Funds – Look Before You Spend

Part of the duties of a community association’s board of directors includes fiscal responsibility. Among other things, the board of directors is tasked with prioritizing and making decisions regarding the best use of the association’s limited financial resources. Expenses such as common area maintenance, insurance, water, and professional services including management, accounting, and legal are […]

Financial Management of Community Associations | Budgets and Replacement Reserves -Part 4 : Reserve Account/Reserve Funds

The reserve account consists of funds put aside in “reserve” for the replacement of major components of a community’s common property (aka “assets”). Typically the reserve account is used to replace asphalt paving, concrete sidewalks, roofs, central heating and cooling plants, swimming pool, tennis courts, elevators, and many other property components. Revenue raised for adding […]

An Overview of Special Assessments (IL)

As you’re probably well aware, Association residents pay regular assessments to cover collective maintenance expenses, based on the annually-budgeted needs of the community. Are you familiar with Special Assessments  Let’s review the basics:    Read the article…………………..

Condo Board at 865 UN Plaza Overcomes a Trio of Tricky Problems (NY)

When Leonard Barish of John P. Lovett & Associates began managing 865 UN Plaza in 2016, he was greeted by a trio of vexing problems. First, the red-brick facade of the 16-story pre-war luxury condominium in the Turtle Bay neighborhood was in need of serious repair. Second, many of the 87 unit-owners were months behind […]

Close Your Old HOA and Condo Bank Accounts

In our continuing education class “Financial Best Practices for Homeowner Associations and Condo Communities” we recommend managers and board members close old bank accounts. In this post we are going to discuss why you should close your old HOA and condo bank accounts.    Read the article……………………..

Can A Condominium Impose Special Assessments For Necessary Or Routine Maintenance? (FL)

Although it is rarely welcomed by the owners, condo associations are permitted by Florida statute to impose special assessments for necessary and routine maintenance. There are a lot of considerations that come into play in deciding whether special assessments for necessary maintenance are required, both procedural and substantive considerations.    Read the article……………………..

HOA Bankruptcy: What you Need to Know

An HOA is an organization that runs on money, similar to other businesses and agencies. And similar to those other organizations, when the HOAs money runs out, they, too, can go bankrupt. Declaring bankruptcy is rarely the answer for HOA communities, although it can, on occasion, happen. If your association has more debts than it […]

Condo and HOA Debit, Credit Card and Petty Cash Best Practices

Your community needs to make small purchases for minor day to day operations. What is the best way to accomplish this without a Board member spending his or her own money, or possibly risking fraud from improper controls around petty cash, debit, or credit card usage?  First, some local supply stores may offer a purchase […]

Condo Smarts: Treasurer should be reviewing strata transactions

Dear Tony: Our strata decided to have an audit done, as we have changed management companies several times in the past five years and we had a number of outstanding issues brought up by our current management company.  The audit was very helpful, as it established definite opening balances for our accounts, and identified a […]

Can Condominiums Charge Capital Contribution Fees? (FL)

Our condominium association clients frequently ask whether they can charge “a new owner fee” or a “working contribution” or “capital contribution” to buyers of a unit. We respond “no.” After our condominium clients get over the initial shock we didn’t provide the usual lawyer answer, “it depends,” the next question usually is “why not”, or […]

3 Options if You Need to Make a Big Repair NOW in Your Association

As a general practice, what does an HOA board do if there’s a problem in the association that exists right now, but not enough money in the reserves to fix it? Is issuing a special assessment the way to go, or can the board use other funds in the reserves?  In other words, the problem […]

Assessing the Financial Health of your HOA

Because of the uniqueness of every homeowners association, it can at times be difficult to form an exact opinion about the financial health of your HOA. However, knowing where your community stands in this area can be extremely helpful. There are a few ways that you and the rest of your board can assess the […]

Should My HOA Add Extra Fees to Increase Income?

Many HOAs experience extreme pushback when trying to raise monthly HOA assessments or add special assessments. As a result, it may be tempting to raise these funds by charging extra fees for amenities or other services in an effort to avoid angry residents. This article will take a look at the topic of extra fees, […]

Condo & HOA Accounts Payables Process Best Practices

Whether you are an accounting geek, a systems person or just want a deeper understanding of accounts payable we are about to get into the nitty gritty of AP. In a full service management company I was a partner of and President I implemented a powerful AP system in 2004 that provides greater tools and […]

Weathering the Storm of Unexpected Community Association Financial Needs

In Florida, particularly in the summer months, a beautiful sunny day can suddenly morph into a torrential downpour. Similarly, an association with no obvious financial problems can suddenly find itself in the perfect storm that arises when restrictive financial language in governing documents, unexpected-yet-necessary repairs and a shortage of funds collide. There are various ways […]

The Importance of Being Treasurer

I attend a lot of annual meetings. When the re-elected or newly elected board of directors has its first meeting, there is a very large expectation gap between what many directors believe their job functions are and what they actually should be. If you look at the bylaws, it’s pretty clear. In many instances, the […]

Fight Fraud With Board Oversight and Strict Internal Controls (NY)

As auditors, we’re required by professional standards to make certain inquiries of the boards in connection with our audit. One of the topics we discuss is their internal control procedures. We assess the risk of material misstatements in the financial statements and consider the co-op or condo’s internal controls as we plan our audit. We […]

Making Cost-Cutting A Priority In Your HOA

Many homeowner associations find it challenging to accumulate the funds they need to provide a reasonable level of services and maintenance. Simply keeping up with inflation currently calls for a 2-3% annual increase in revenue. But fighting inflation can be easy if the board makes cost-cutting a priority. Start by identifying the high-ticket items.    Read […]

Financial Best Practices and Transparency – The Latest Tools to Help Communities Safeguard their Funds

Protecting community finances key assets such as bank accounts and reserve accounts is one of the board’s top jobs. Your associa-tion’s financial soundness affects every member of the community through the ability to pay for services, maintain your property and overall unit values. This article will provide an overview of several financial best practices and […]

6 Easy Ways Your Community Association Can Save Money

Everyone is talking about saving money and cutting expenses these days- but what does that really mean to you and your association? With assessment income down and operating expenses up, many associations find it hard to pay vendors and continue services, so how does an association cut expenses?  Here are a few real, inexpensive ways […]

Court Holds That Condominiums May File Bankruptcy

Recently, the Bankruptcy Appellate Panel for the First Circuit (which includes Puerto Rico) decided that a condominium association is a “person” eligible to file bankruptcy. While the court did not permit the bankruptcy to go forward due to fraud, the decision is significant for condominium associations that are saddled with debt.  The court’s reasoning follows:  […]

It Pays to Have an Extra Pair of Eyes on the Money (NY)

The Murray Hill Crescent co-op, a 21-story, 280-unit post-war building with a distinctive curved facade, is proof that committees can be an invaluable help to co-op boards. First came a makeover of the common areas, then a $1.3 million renovation project. Thanks to active shareholder committees – and a tight rein on its finances – […]

Three Actions to Get Your Condo Association Finances in Order

Without money, your Condo Association is in deep trouble. Fiduciary duty is the only codified duty of a Board member, and thus finances is your top priority. An Association’s financial house can fall into disarray for a variety of reasons. It might be an apathetic Board, a bad Board, or simply a new Association that […]

A Niche Loan for Condo Capital Projects

Condominiums and homeowner’s associations (HOAs), unlike co-ops, do not have the ability to raise funds for capital projects by taking out a mortgage. But a new niche product known as a Common Interest Realty Association, or CIRA, loan can help condos and (HOAs) tackle pricey repairs by spreading the payback over several years, thus avoiding […]

5 Ideas For an HOA Side Hustle

It seems like everyone has got a side hustle nowadays, for Airbnb to Uber and beyond. Many HOAs don’t realize that these revenue generating ideas could be implemented to benefit the HOA and it’s members. We all know that most homeowners associations frown upon tenants subletting their apartments on hospitality websites. But many boards don’t […]

6 Questions to Ask About How the HOA Board Manages Its Finances

The Board of Directors (BOD) for your homeowners association has an immense financial obligation to the community. One of the BOD’s most important jobs is to keep legible and accurate financial reports and records. These reports and records provide an overview of your community’s revenue and expenses against its financial projections or budget.    Read the […]

Should Your Community Report Delinquent Assessments to the Credit Bureaus?

We have been asked by several clients over the past year about whether they can report delinquent assessment debt to the credit bureaus, or whether we will do so on their behalf. This article is intended to walk you through our general position on this matter. While we draw some conclusions herein, this is not […]

Where Do My HOA Dues Go?

During our decades overseeing property management in Irvine, the Inland Empire and throughout Orange County, the most common questions we receive pertain to HOA dues.  Are dues really that important? What are they used for?  The first answer is: yes, they’re extremely important. The second answer is more in-depth. In this article, we’ll break down […]

HOA Finance

Money makes the world, and associations, go round. One of the top priorities for HOA and community association managers is ensuring that budgets are allocated and used wisely.  This means that having sound HOA finance processes, like audits and collections, are essential.  Read through tips on how to handle community finances below.   Read the articles…………………

HOA Financial Statements: Uncovering the Hidden Risks & Opportunities

Members of a condominium or co-op homeowners’ association (HOA) have a fiduciary responsibility to manage their community’s funds wisely, and to protect the financial interests of all owner/shareholders. Breaching this duty carries the real probability of penalties and legal action against the HOA, and potentially against individual board members themselves.  Despite the gravity of this […]