HOAs Are Reporting Companies Under The CTA

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 […]

What is HOA Balance Sheet And How To Read Them?

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 […]

Review or Audit the Books – always do one of these………

…..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 […]

Everything You Need to Know About HOA Accounting

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

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………………………..

A Guide to HOA Budget, Accounting, and Finance

Understanding how to interpret your HOA management company’s financials are an important part of your role in an HOA. The management company you’re working with keeps detailed financial records and HOA members’ ability to read and understand them will be key in maintaining community funds. This skill set is even more important if you are […]

HOA Accounting Reports You Should Know That Are Not Financial Reports

Many homeowners associations focus on the operational side of community management. But, the financial aspect is just as important. And one of the ways to evaluate the financial health of the association is through HOA accounting reports.    Read the article………………………..

HOA purchasing policies

Members of HOAs and condo communities pay fees that are used to maintain the development. A lot of that money goes towards purchasing materials and services.  Read the entire article……………………………….

Your Guide to HOA Finance, Accounting, and Budgeting

Keeping the association in good financial standing is one of the most important duties of an HOA board. Poor HOA financial management can have lasting consequences, so it’s crucial for board members to understand the basics of association finance. In doing so, they will know how to properly manage community funds and ensure the continued […]

Understanding the Basics of Board Financial Reporting

As a property manager or community association board member, sometimes it’s tough to remember that associations are businesses. Some of them are pretty large, with hundreds of thousands of dollars in dues collected and expenses paid each year. That requires regular, proactive monitoring to ensure that issues, like mistakes or variances, are quickly identified and […]

HOA balance sheets

Balance sheets are used by all types of businesses. HOAs also use balance sheets to understand how much money is coming in, how much is going out, and how much equity they have.  This financial document provides a clear snapshot of the company’s finances at any given point in time. The items listed on the […]

Your Guide to HOA Finance, Accounting, and Budgeting

Keeping the association in good financial standing is one of the most important duties of an HOA board. Poor HOA financial management can have lasting consequences, so it’s crucial for board members to understand the basics of association finance. In doing so, they will know how to properly manage community funds and ensure the continued […]

What can condo, homeowner associations do to prevent possible fraud activities? (FL)

With potentially millions of dollars at risk, Collier and Lee counties community associations have a very vested interest in monitoring their property management companies.  At least 30 condo associations in Collier County are deep into forensic audits after news that their management company, American Property Management Services of Naples, is facing a $100,000 civil suit […]

HOA Financial Statement Requirements

Among the many records that a homeowners association must keep, the financial statement is definitely an important one. Residents invest in the community through their fees and assessments, and they have the right to see how that money is being used by the HOA board. Transparency and accountability are vital to healthy relationships with the […]

HOA Board of Directors Financial Spring Cleaning (GA)

The end of March is officially national spring-cleaning week! Your Board’s HOA spring-cleaning checklist should include a check-in with your association’s finances and plan for the rest of the year. While we cannot predict what will happen, the best way to protect the association from uncertainty is to have a financial plan.  Read the entire article……………………………….

Why Do HOAs Need To File Form 1099 MISC?

Tax season is always hectic and confusing, especially if you have no experience with it. Like many other organizations, homeowners associations also need to file Form 1099-MISC, even if you are classified as a non-profit. Learn more about this important IRS form below.    Read the article………………………………

Accounting for HOAs

HOAs cannot operate without revenue. It’s as simple as that. Good accounting is critical to the health and happiness of every HOA development.  Managing a multi-million dollar budget is not so simple, however, especially if none of your board members have an accounting background. Accounting can be quite stressful for anyone to navigate, and it’s […]

Five Financial Tips for New HOA Board Members

Congratulations, you’ve been elected to your HOA board! As a board member, you have a fiduciary duty to use sound business judgment in your role. That means you need to think like a business owner and not just a committee member – and that includes understanding the HOA’s financials.  As a new board member, you […]

What Are the Basics of Homeowners Association Accounting?

Accounting has a less than impressive reputation. However, it is critical for the smooth functioning of a wide range of both for-profit and non-profit organizations. Homeowners associations are no exception to this rule.  As for why this is the case, the answer is that accounting provides both internal and external parties. With a clear understanding […]

Your Guide to HOA Finance, Budgeting, and Accounting

Kindly allow us to share a basic refresher on some financial terms related to accounting, financing, and budgeting. You may encounter these concepts in your role as an HOA leader.   Read the article…………………………………..

HOA Financial Management in the New Normal

The direct and indirect impacts of the COVID-19 pandemic will be with us for a while. Careers have been interrupted, we’ve actually gotten used to working from home, and travel – business and vacation – has been severely limited. On the bright side, we’re spending more time with family and friends, getting to those home-improvement […]

What Homeowner Associations Need to Know About Accounting Standard Changes for Revenue Recognition

In 2016, the Financial Accounting Standards Board (FASB) released a new standard, ASC 606 – Revenue from Contracts with Customers. The new standard is effective for Dec. 31, 2019, financial statements, and the changes in revenue recognition it has created, have a significant impact for condominium and homeowner associations (community associations).    Read the article………………………….

HOA Accounting Standards The Board Must Set Up

Much like a business, a functioning community incurs costs and earns revenue. As such, it’s important to set up HOA accounting standards to maintain accurate financial reporting.  Now, accounting can be quite stressful for community managers to navigate. With so much money going in and out, sometimes on a daily basis, it can be a […]

Understanding An HOA Treasurer Report: What’s In It?

The Treasurer of an HOA has one of the most important jobs on the HOA board of directors. It is important for HOA board members to consider carefully who they will be recommending to their treasurer position given that the role will determine the liquidity of the HOA and how it makes its most important […]

Property Manager Steals Hundreds of Thousands of Dollars from Two South Florida Condominium Associations (FL)

As documented in a recent report in the Miami Herald, the property manager of two Sunny Isles Beach condominium towers has been arrested for stealing hundreds of thousands of dollars from the associations for the properties.  Property manager Georgina Pineda (pictured below) was booked into a Miami-Dade County jail recently, and apparently it wasn’t her […]

HOA Financial Reports: What Every HOA Board Member Should Know

Managing and overseeing the finances of your HOA should be the HOA board’s main priorities. That said, many HOA board members may not have experience with HOA financial reports previously, consider this article as a helping hand.    Read the article…………………………

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 […]

Restrict Cashing Checks With Restrictive Endorsements (CO)

What do you do when you receive a check from a delinquent owner with a restrictive endorsement on it? Do you cash it? Do you return it? Do you call the attorney?  A restrictive endorsement is a written statement sent with a payment that either defines what the check is written for (such as “Assessments […]

Safeguarding finances: 9 steps to prevent fraud and embezzlement in your HOA

Community associations fall victim to theft and embezzlement too frequently. Board members should know the warning signs and institute preventive measures before the community is left with a difficult recovery. Combining these safeguards should help to keep your association and homeowners from being victimized.  Read the article……………………….

How Does Transitioning HOA or Condo Community Accounting Work?

Some Boards are hesitant to change accounting mid fiscal year. The fear may be that the accounting for the fiscal year end will be convoluted or inaccurate and can interfere with a year-end audit or tax filing. Or the fear may be that it is a lot of work. You don’t have to fear the […]

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……………………..

How to Prevent HOA Fraud, Theft, & Embezzlement

A homeowner association (HOA) is often made up of trusted friends and neighbors. However, that doesn’t make your community immune to fraudulent behavior. With over 40 million households in the United States belonging to an HOA, there is a lot of money at stake and safeguards should be put into place. Start protecting your community […]

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 […]

Eight Warning Signs For Your HOA Finances

Although no one wants to look upon other board members with suspicion or doubt, there is a risk of fraud and mismanagement with any HOA board. There should always be checks and balances, and your board should always be on the lookout for any red flags that may indicate that your funds are being handled […]

Reading Your HOA Balance Sheet

Though it may seem overwhelming or confusing, it’s not something to be quickly gazed over. If members of the board don’t understand how to read the balance sheet, you run the risk of accidentally spending more than is allotted for a specific budget period. It can also be a tool for examining your associations reserve […]

An Audit of the Association’s Financial Records is Always Wise

When it comes to year-end financial obligations of associations, most boards are aware of general requirements, such as providing financial statements to the owners, finalizing a budget for the upcoming year, and completing a board-review of the association’s financial records. From time to time, boards may also opt for a more thorough assessment of the […]

HOA Accounting 101

One of the most important jobs of any HOA board is managing community finances. Unfortunately, this is also one of the most underestimated jobs. We’ve seen many boards mismanage the money simply because they didn’t understand basic accounting fundamentals. We know most financial trouble for HOA’s has nothing to do with intentional neglect, but everything […]

Does your HOA qualify for Form 1120-H?; HOA No Private Inurement Test

Homeowner (and condominium) associations hold an unusual place in the tax world. On the one hand, most do not squarely meet the definition of a 501(C) nonprofit. On the other, they are not in business pursuing a profit. In fact, the vast majority of HOAs are small, volunteer-run associations that function solely to enforce covenants […]

Protect Your HOA Board Against Embezzlement

It is essential to know how to protect the funds of your community as a member of an HOA Board of Directors. Here are certain practices that will ensure that the accounts of the members of your HOA Board are protected against embezzlement:    Read the article……………..

Do HOAs Need to File a Tax Return?

If you own a home in a planned community or development, there is a good chance you are a member of a homeowners’ association (HOA). One perplexing aspect of HOA management is following the tax reporting requirements of the IRS. Some common questions our office receives are “Must our HOA file a tax return?” “What […]

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 […]

Accounting changes will likely be an added expense (IL)

As I noted in the Nov. 18 column, new Section 1-45(h)(i) of the Common Interest Community Association Act and new Section 18.10 of the Illinois Condominium Property Act provide that: “An association subject to this Act that consists of 100 or more units shall use generally accepted accounting principles (“GAAP”) in fulfilling any accounting obligation […]