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/ Owner - June 7, 2012

Finance Articles from the Web

Finance & Reserve Videos

Accounting

  • HOAs Are Reporting Companies Under The CTA May 30, 2024
    On 4/18/24, FinCEN updated its Beneficial Ownership Reporting FAQs and included for the first time information regarding HOAs (Home Owners Associations). FinCEN confirms in this update that HOAs are reporting companies under the Corporate Transparency Act (CTA) and are subject to BOI (Beneficial Ownership Information) reporting requirements if they are entities created by filing of a document with a secretary of state or similar office.     Read the article…………………………….
  • What is HOA Balance Sheet And How To Read Them? April 3, 2024
    As a member of a homeowners association (HOA), it’s important to understand the financial health of your community. One key document that provides insight into an HOA’s financial position is the balance sheet. In this post, we’ll explain what an HOA balance sheet is, review its key components, and provide tips on how to read and interpret this important financial statement.     Read the article…………………………….
  • Review or Audit the Books – always do one of these……… March 20, 2024
    …..because if money disappears while you’re on the board, you might as well move, as your neighbors will blame you just as much as the crook. Over the last month or so, we’ve seen another boost in cases of  fraud and embezzlements in HOA’s and condo’s. I imagine this occurs after the beginning of the year because most associations get their audit or financial review at the end of the fiscal/calendar year.  Whereas the instances of crime have appeared are mostly ...
  • Everything You Need to Know About HOA Accounting September 19, 2023
    As with any organization, strong accounting can make all the difference in maintaining a well-run, functional HOA. While good accounting practices can lead to happier homeowners and communities (not to mention HOA boards), poor financial management can have a lasting, negative impact.   Read the article………………………..
  • Sharing Community Financials May 24, 2023
    As a community association board member or manager, you are ultimately responsible for managing the finances of a business – your community. The association members are all stakeholders in that business, so sharing financial information with them is essential to building and maintaining trust and credibility.   Read the article………………………..

Accounting Archives

Audits

  • Audits at Boynton Beach HOA question its finances; board president awarded contracts (FL) August 19, 2023
    Nautica’s HOA budget is more than $600,000 a year. Previous audits have also identified problems and one homeowner said she had to file complaints with the state to see HOA documents.   Read the article………………………..
  • When It’s Time for an Audit – Covering the Basics for Multifamily Boards July 6, 2023
    When the average American taxpayer (or tax-dodger, one supposes) hears the word “audit,” they’re likely struck with a feeling somewhere between annoyance and terror—usually because being audited means that something has been found amiss in their filing. For businesses that rely on the accuracy and timeliness of their financial records, however, including condominium and homeowners associations and cooperative corporations, an audit is—or at least ought to be—a regular part of a healthy fiscal practice.   Read the article………………………..
  • What can residents do when the HOA or condo board hasn’t posted audit or held elections? (FL) July 2, 2023
    Question: According to the Condominium Act, “each year the board of administration must prepare and complete a financial report of the previous year’s financial activities within ninety (90) days following the end of the Association’s fiscal year, or on such other date as the bylaws of the association require.”   Read the Q&A……………………………
  • Your Accountant Wants You To Know About Section 57 Of The Condo Act (MI) June 8, 2023
    Condominium associations with annual revenues exceeding $20,000.00 should take specific note that Section 57(2) of the Michigan Condominium Act provides that an independent certified public accountant must perform an annual review or audit of the association’s financial documents, including its books, records, contracts, and financial statements.    Read the article………………………..

Audit Archives

Budget

  • What Makes a Successful HOA Budget? July 17, 2024
    To begin, a budget’s purpose is to plan out what is needed for cash flow for a period of time. It can also function as a planning tool, depending on the template used. Some associations function on a calendar year (January-December), and some function on a fiscal year, which is any twelve month period, such as June 1st to May 31st. Every budget should have these components to it: Income (Assessments), Expenses, Savings (Capital Reserve Transfers), and Debt Service (if ...
  • Community Messaging During Times of Financial Turmoil (CO) July 17, 2024
    Nobody LIKES to have those hard discussions with board members and homeowners on the reality of the Association’s financial health, but it is increasingly becoming a necessity within the HOA industry. Over the past 10 years, we have endured dramatic price increases across the board, including basic labor rates, material price increases in some industries of more than 100%, and insurance premiums that have skyrocketed. It is a rarity for an HOA board to adjust assessments in a timely manner ...
  • Behind on COA assessments? Your COA may do these things (FL) July 11, 2024
    When a resident moves into a condominium, they may have an idea of what to expect as they join their local Condominium Owners Association (COA). This could be the payment of assessments for maintenance and building policies.  However, life sometimes gets hectic which makes it hard to fulfill financial obligations. This is one of the most common disputes between tenants and COAs. What can a condo resident expect if they fall behind on assessments?     Read the article…………………………….
  • The Role of Special Assessments in Community Management July 8, 2024
    Did you know? This year, a staggering 91% of community associations experienced unexpected increases in their HOA expenses due to inflation and rising costs.These challenges highlight the importance of planning for unforeseen circumstances in our neighborhoods.  Special assessments play a vital role in addressing these unexpected expenses but are often misunderstood.    Read the article…………………………….
  • Everybody Hates Assessments: Handling the Unpleasant Inevitable July 3, 2024
    Ahh, the pleasures of home ownership; a space to call your very own, to arrange and enjoy as you see fit, all while building equity. It’s a key component of the American Dream—but when the faucet leaks in your condo or co-op unit, there’s no more calling the landlord. You’ve got to fix it yourself. In shared interest communities, that’s true of every component of the building, both inside and outside your unit. The upkeep, maintenance, and repair of everything ...

Budget Archives

Collections

  • Tough Enforcement and Foreclosure Cases – What Can be Done to Collect or Resolve? (CO) July 17, 2024
    Covenant enforcement and foreclosures have become harder in the last few years due to legislative and economic changes. As such, certain covenant enforcement and foreclosure cases can become extremely difficult to resolve due to Owners who may attempt to delay the process or due to not following the proper processes and procedures both in the Association’s policies or in legal proceedings.   Read the article…………………………….
  • Behind on COA assessments? Your COA may do these things (FL) July 11, 2024
    When a resident moves into a condominium, they may have an idea of what to expect as they join their local Condominium Owners Association (COA). This could be the payment of assessments for maintenance and building policies.  However, life sometimes gets hectic which makes it hard to fulfill financial obligations. This is one of the most common disputes between tenants and COAs. What can a condo resident expect if they fall behind on assessments?     Read the article…………………………….
  • New law will make it tougher for Colorado HOAs to foreclose on homes July 8, 2024
    Colorado homeowners associations will have a tougher time foreclosing on their residents for unpaid debt starting in August.  House Bill 1337, signed by Gov. Jared Polis in early June, creates new hurdles for HOAs before they can file for foreclosure and limits how much associations can charge in attorney fees when they are trying to collect what they’re owed. It also gives homeowners and renters a second chance at keeping their properties in the event a house is foreclosed on ...
  • Georgia homeowners share nightmarish legal brawls June 22, 2024
    Georgia residents who have faced foreclosure proceedings and, in at least one case, lost their house to their homeowners association detailed frustrating conflicts stemming from what they described as an abuse of power.  Read the article…………………………….
  • California appellate court upholds ruling on debt collection practices June 18, 2024
    Recently, the California Court of Appeal for the First Appellate District upheld a ruling against a defendant and its related entities. Plaintiff had filed a class action lawsuit against the defendants, alleging that they had violated the FDCPA and California’s Unfair Competition Law (UCL) in their debt collection practices related to homeowners’ association (HOA) assessments.     Read the article…………………………….

Collections Archives



Reserves

(Association Reserves has a list of state laws regarding reserves at this location;  

(Building Reserves also has a list of state laws regarding reserves at this location:

  • Maximize your Return on Reserve Interest July 17, 2024
    Over the last three years, inflation has reached 40-year highs. As a result, board members of homeowners associations have been put in a difficult position when trying to optimize their community’s expenses. Inflation was resulted in the expenses incurred by your property increasing in addition to more expense rates when it is necessary for the community to borrow money from banks.   Read the article…………………………….
  • Is Investing HOA Reserve Funds the Right Move? July 15, 2024
    In the world of Homeowners Associations (HOAs), managing reserve funds effectively is crucial for maintaining property values and ensuring the community’s long-term financial health. A question that often arises is: Can HOAs invest their reserve funds? The answer isn’t straightforward, but understanding the nuances can help HOA boards make informed decisions.  Read the article…………………………….
  • Does law now require condo owners pay catch-up fees for years when reserves were waived? (FL) July 8, 2024
    Question: For the last two years, my fellow condominium board members have been running around with their hair on fire because we have been told the new Florida statutes require us to not only fully fund reserves on an annual basis beginning next year, but also to replace the approximately $4 million that would have been in our reserve accounts had we not waived funding reserves over the last 50 years.  A recent webinar I attended disputed that and said ...
  • The State of HOA Reserve Funding: Are Associations Nationwide Meeting the 70% Benchmark? June 20, 2024
    Homeowners associations (HOAs) play a critical role in managing and maintaining the common areas and amenities that enhance the quality of life for residents in communities across the United States. One of the key responsibilities of an HOA board is to ensure the association has adequate reserve funds to cover the future repair and replacement costs of major components, such as roofs, paving, and pools. Achieving a reserve fund that is at least 70% funded is considered a benchmark for ...
  • Condo reserves a growing issue (Part 2) June 20, 2024
    A few weeks ago, we wrote about condo and co-op reserves and the new Florida State law. This new law, passed in the wake of the Surfside collapse in 2021, mandates condo and co-op buildings at least 30 years old do milestone structural inspections by Dec. 31, 2024. They must do additional milestone structural inspections every 10 years thereafter. Also, these condo and co-op properties must have enough cash on hand to match the repairs required by the milestone inspections.  ...

Reserve Archives

Banking & Lending

  • Preparing to Borrow for Major Projects: What Association Management Companies Should Know July 17, 2024
    In the rapidly growing community management space, association managers are responsible for a wide range of projects to maintain and improve the communities they serve. From routine maintenance to large-scale initiatives aimed at enhancing property values and resident satisfaction, each project needs a financial plan as well as a logistical one.   Read the article…………………………….
  • What to know about Obtaining an HOA Loan (CO) July 17, 2024
    There are times when a community association may need to explore its funding options, such as if it is considering a large construction or renovation project for the community. A loan may be an attractive option to avoid relying on increased assessments, special assessments, or reserves alone to fund the project. Ultimately, whether a loan is a good option for your community is up to the association to decide. However, an association must review their governing documents to determine: (1) ...
  • Non-redeemable investments not recommended for strata councils (BC) June 26, 2024
    Q: We are in need of a special assessment to cover an emergency underground repair in our townhouse complex. We have enough funds in our reserves to cover the cost, but our strata president decided to invest the funds in a three year non-redeemable GIC, so we have no choice but to assess the owners. Obviously, our owners are unhappy about this. What are our options? Can we prevent this in the future?    Read the Q&A………………………………..
  • Navigating changing laws and regulations: How HOAs and COAs can work with banking partners to plan and prepare June 13, 2024
    Florida is home to approximately 49,000 homeowner associations (HOAs) and 27,000 condominium associations (COAs), leaving a majority of homeowners impacted by changing association regulations and laws. From dealing with shifts in insurance demands to reserve requirements, HOAs and COAs are responsible for addressing pain points for both the present and future. This tremendous responsibility is made that much easier to navigate with knowledgeable partners, particularly your banker.   Read the article…………………………….

Banking & Lending Archives

Taxes

  • New York City’s Hidden Water Tax May Cause 8% Increase in Bills May 8, 2024
    New Yorkers love to complain about taxes, including but not limited to property taxes, sales taxes and income taxes. Now all city residents — whether they live in co-ops or condos, rental buildings or single-family homes — may soon have a new tax to complain about: a hidden tax on water and sewer service that could cause their bills to spike by more than 8% this summer.    Read the article…………………………….
  • Flip Taxes: Co-Op & Condo Boards’ Tool for Boosting Reserve Funds (NY) April 9, 2024
    It began back in the 1970s as a tool to discourage real estate speculators and to avoid assessments and increases in monthly charges. Today it is primarily a tool for co-op and condo boards to keep their reserve funds robust. And when it comes to setting one — and determining who pays it — there’s a lot of wiggle room.     Read the article…………………………….
  • MHH Condo/Co-op Digest Vol. VI, April 2024 (NY) April 6, 2024
    Court Of Appeals Decision Threatens To Upend NYC Property Tax System:  On March 19, 2024, the New York State Court of Appeals issued a decision in Tax Equity Now NY, LLC v. City of New York et al., Index No. 153759/2017 (Sup. Ct. N.Y. Co.), opening up a path forward to challenging New York City’s property-tax system on the basis that it allegedly “imposes substantially unequal tax bills on similarly-valued properties  Read the article (PDF)…………………………….
  • State Court Ruling Opens Door for Major Changes to NYC Property Tax System (NY) March 27, 2024
    A recent state court ruling has created a path toward major changes to New York City’s property tax system — albeit one that could have mixed consequences for co-ops and condos owners. In a 4-3 ruling, the New York Court of Appeals allowed a lawsuit alleging the city’s property tax system is unfair and illegal to move forward. Tax Equity Now New York (TENNY), a coalition of homeowners, real estate industry groups and civil rights organizations, filed the suit, claiming ...

Taxes Archives

General Financial

  • Thoughts on Achieving Financial and Social Sustainability (TX) July 15, 2024
    In Texas and nationally over the past 15 years we have seen a higher number of condominium projects being developed. The reasons vary, but include a desire for greater density as a means to accommodate higher land prices and/or construction costs, changing demographics, and/or a means to offer the option for homeownership with a higher level of service and amenities.   Read the article…………………………….
  • Financial Literacy for Board Members: Knowing More = Governing Better July 3, 2024
    When a condo or co-op resident runs for a seat on their board, the decision to do so generally comes from a desire to ‘step up’ and participate in the governance of the place they call home, and the building or association community as a whole.   Often, the residents willing to serve on their board aren’t necessarily those with finely-honed skills and formal education in law, finance, and practical business management.   Read the article…………………………….
  • Financial management: Understanding how community managers drive sound decisions June 14, 2024
    Community association managers wear many hats and must be well versed in a wide range of skills, all of which are equally important. One component of a manager’s role is to completely understand the financial management aspects of a business. This means knowing and interpreting the financial pieces as well as the nuances that come along with decisions.   Read the article…………………………….
  • Keeping Your Community Association Solvent in A High Inflation Economy June 6, 2024
    If you are like me, you are becoming acutely aware of rising costs in our current economic environment. While inflation appears to be cooling off a bit, it certainly is not coming down at the rate necessary for most Americans to see much of a difference. In a post COVID world, we have seen prices of food, goods, and labor soar. And while we are all hopeful for some relief from rising costs in the near future, we must prepare ...
  • Best Practices to Combat Payment Fraud June 3, 2024
    Community association management companies are under siege from high-tech con artists determined to rip them off. From phishing schemes and business email compromise attacks to account takeovers and vendor impersonation, fraudsters have become more brazen and sophisticated.    Read the article…………………………….

General Financial Archives

Fraud & Embezzlement

  • Five Steps to Protect a Community Against Fraud & Embezzlement July 17, 2024
    The Board of Directors of an owner’s association wears many hats: decision maker, mediator, judge, and community organizer. Quite possibly the most important role a Board member serves is that of a fiduciary. A fiduciary is a person or entity put in a position of trust to protect the interests of a third party. While establishing and enforcing community design guidelines and use restrictions are essential actions for a Board of Directors, the primary need for a Board is to ...
  • Woman’s indictment includes HOA thefts (VA) July 17, 2024
    A Frederick County woman was indicted Thursday for allegedly embezzling thousands of dollars from two parent teacher organizations and a homeowner’s organization.  Shawn Marie Bianco, 44, of the 100 block of Georgetowne Court in Stephens City, was indicted by a grand jury for 25 charges of embezzlement from three different groups, according to documents.    Read the article…………………………….
  • Former Galveston condo manager charged in $188,000 theft (TX) July 4, 2024
    A former island property manager is behind bars after being charged with felony theft in connection to embezzlement of about $190,000 from a condominium complex over about seven years, according to court documents.  Read the article…………………………….
  • GOP state senate candidate faces September trial for looting Orlando HOA (FL) July 4, 2024
    Cheryl “CJ” Blancett, 64, of Leesburg, is on the ballot for the Aug. 20 State Senate District 13 Republican primary. But the following month, on Sept. 23, the candidate, who describes herself as a “gladiator for the U.S. Constitution,” goes on trial for two counts of felony theft in Orange County’s Ninth Judicial Circuit Court.  If Blancett, the founder of United Conservatives Alliance, is found guilty of stealing nearly $48,000 from the Orlando homeowner’s association (HOA) she was hired to ...
  • Up North condo owners accuse ski resort of rental property management fraud (MI) July 2, 2024
    A group of rental condominium owners at three Boyne resorts in Northern Michigan have filed a lawsuit accusing the company of price gouging and fraud.  (Behind Crain’s subscription paywall………….)

Fraud & Embezzlement Archives

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