Having a proper, fiscally responsible budget in place is necessary for the successful operation of any homeowner’s association. Just as with any budget, income and expenses must be considered ? for an HOA, this income mainly comes in the form of owner assessments. When projecting yearly expenses for an association, those serving on boards of […]
Possibility exists that new board could reduce budget (FL)
Q: Our board spent a lot of time developing the 2020 budget. The budget went up to address actual expenses, and assessments also went up. With the election coming up, we are fearful that a newly elected board could re-open the budget and reduce assessments to the 2019 levels. Is this possible? Read the Q&A………………………………
No increase in dues this year? Don’t pop the champagne corks yet! (MN)
I have lost track of how many times I have been told by the president of an association, “We haven’t had to raise dues in five years.” It’s usually said with great pride. And then I burst her bubble. Managing expenses is of course a primary objective for association boards, but not raising dues (assessments) […]
A condo and homeowners associations annual budget guide
At the end of each year, many condo associations direct their focus to the future and begin to prepare the coming years’ annual budget. While budgeting is undoubtedly one of the most challenging aspects of serving on a condo board it’s not impossible. As with any difficult task, it helps to approach it in different […]
Homeowner Associations And Their Budgets
Many homeowner associations find it difficult to hold the line on expenses. Inflation erodes endlessly increasing budgets and members scream for relief. But help is on the way. There are practical ways to reduce costs without cutting services. The HOA’s budget is like a collection of uncut gems of different type, size and quality. Some […]
Condominium budget varies greatly depending on type of property and amenities (FL)
Q: Is there a “rule of thumb” for the total dollars in the operating budget based on the number of units? E.g., for a condo building with 100 units, is it a reasonable expectation that budget will not exceed $800,000? Read the Q&A…………………………
How to Effectively Present HOA Budgets
When you are serving on the board of your HOA, you have several fiduciary duties that you have to complete each year. One of these fiduciary duties is preparing an annual budget and establishing assessments for your HOA. The budgeting process can be time-consuming and difficult to complete since there are so many factors that […]
Tips to Take Charge of Your HOA’s Budget Planning Process
Your association’s budget impacts the financial and physical health of the community and residents’ property values. The budget is the first, crucial step to restoring aged, once-beautiful communities to their former glory, and it determines the enjoyment residents will derive from their community. Association boards can take several steps to optimize their operating budget to […]
Landscape Budget Planning
Budgeting season is here, and while it might not be the most enjoyable time of year for property managers, your landscaping provider can be a valuable partner when it comes time to take on your biggest yearly expenses. Here are a few best practices to keep in mind when budgeting for landscape expenses this coming […]
10 Ways To Thank a Volunteer, With Little (or No) Budget
Volunteers who serve your HOA board – or provide any other free service for the homeowners association – deserve thanks and gratitude for the invaluable role they play in the HOA. Trouble is, there’s often not an unlimited budget available to throw huge parties or special events. Read the article…………………………
Costs and Income Must Be in Balance (NY)
A lot of co-op and condo boards seem to think that keeping the monthly maintenance or common charges down is the way to go. But what happens when costs outrun income? Read the article……………………….
20/20 Vision on Your HOA’s 2020 Financials
Whether you are a property manager, a management company principal, a new or a seasoned community board member – a clear 20/20 vision of your Homeowner Association’s 2020 budget begins today. It may seem a little early for this discussion, but it is better to understand your community’s financial health now, so you have plenty […]
The right reasons for raising HOA dues (NV)
A community association’s board of directors is elected by fellow homeowners to make decisions for the well-being of the community, including how the community’s finances are managed. Read the article………………………….
Top 13 Budgeting Mistakes Self-Managed Boards Make
Planning the right budget for the community is crucial in making sure the homeowner’s association is not underfunded. However, when the HOA is run by a self-managed board who are not financial experts, financial issues may unfold. Poor budget planning can cause serious conflicts between the HOA board members and homeowners, which is the last […]
Condo Association Budget Season Tips: How to Cut Costs and Increase Your Reserves
One of the most important duties of the community association treasurer is to take the lead on reviewing and approving the annual budget. This annual duty is quite possibly the most important function of the treasurer. Typically, the draft recommended budget is initially prepared by the management company and then it is provided to the […]
It’s Budget Season! Revisiting a Board’s Fiduciary Duties to the Association
If the nights are getting chillier, the leaves are beginning to change color, and kids have gone back to school, what season is it? Fall? Nope. It’s budget season! Since most associations’ fiscal year coincides with the calendar year, many associations are in the throes of planning and budgeting for the upcoming year. 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 […]
Being Proactive with HOA Budget
Money plays a key role in both our professional and personal lives. When people look at organizations from an outside perspective, usually only the most visible financial attributes can be seen, such as who the vendors are, the state of their landscaping, and what social activities are hosted. However, these factors are not a true […]
A Budget Deficit Is a Recipe for Disaster (NY)
They’re running a deficit, and it’s been growing year by year, so their problems are compounding. Every month they’re paying late fees, and interest is accruing on their late payments. Most recently, they paid their property taxes a couple months late and were charged interest. Because they had a line of credit with their bank, […]
Budget Bonus
Thanks to some excellent interchanges with Robert Nordland, PE, RS, founder of Association Reserves as we were rolling out the Building the Budget series, we decided to create a budget template In Excel for anyone to use. Read the article……………………
Building the Association Budget: Fundamentals, Hard Work & Guts – Part 5 (Avoiding Common Pitfalls & Achieving Awesomeness)
Part 1 of this series established the real goal of the association budgeting process. Part 2 presented a method of budgeting to learn from the past, see the present clearly, and plan for the future. The third piece got into the nitty-gritty, outlining the components of a budget. A common theme began to emerge. Budgeting […]
Building the Association Budget: Fundamentals, Hard Work & Guts – Part 4 (Communicating the Results…Especially the Hard News)
You’ve done the hard work. The budget’s built. The plan is solid. Now it’s time to roll it out. You may be delivering the first draft to a Budget & Finance Committee or the Board. If you are in a state that requires the proposed budget to be sent to homeowners in advance of adoption, […]
Building the Association Budget: Fundamentals, Hard Work & Guts – Part 3 (Components of a Great Budget)
We’ve established the purpose of a community association budget. We’ve learned the benefits of applying sound methodology Now we are ready to dive into the nitty gritty. Budget formats can vary significantly. Their contents depend on the complexity of the property. A 300-unit condominium association with a central HVAC plant and staff will have a […]
Building the Association Budget: Fundamentals, Hard Work & Guts – Part 2 (The Method)
In the first blog in this series, we covered the basics. A focal point of that piece was clarifying the real goal of a budget. It’s worth repeating: The purpose of the budget is to create a reasonable plan to finance the operation of a community association in accordance with the realities of property condition […]
Building the Association Budget: Fundamentals, Hard Work & Guts – Part 1 (The Basics)
Budget season for community associations with calendar year-ends are upon us. Even though I’m no longer responsible for writing several budgets each year any longer, I could feel it coming. Thirty years in the management business re-wires your brain, I suppose. Read the article………………………..
The Case for Adequate Reserve Contributions | But… That’s all we can afford!
What’s better – $50/mo Reserve contributions (as part of your condo’s total monthly assessment) or $100/mo? All other things being equal, I’d rather pay the $50 monthly bill. Why would any board, able to set the budget at their association, choose the higher amount for the owners? Read the article…………………..
Maintenance Charge Increases When, Why, and How to Raise Monthly Fees
There are few things upon which most people agree, but a general dislike for paying more today for something that cost less yesterday is pretty universal. This goes for taxes, consumer goods, healthcare, and of course for monthly maintenance or carrying charges to a co-op, condo or HOA. But like it or not, the reality […]
Financial Management of Community Associations |Part 3 : Budgetary Roles and Responsiblities & Budget Presentation
The roles and responsibilities with regards to the budget at your community association can be varied. The manager, board of directors, treasurer, and even the owners all have different roles in planning and maintaining the budget. We will take a detailed look at those roles as well as the best ways to present a budget. […]
Financial Management of Community Associations | Budgets and Replacement Reserves Part 2 : Budget Preparation
A budget usually applies to a 12-month period (Jan 1 to Dec 31, Jul 1 to June 30, etc.). Your community’s budget should be approved a minimum of 45 days in advance of the start of the fiscal or budget year. This will enable distribution of the approved budget to owners before it goes into […]
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…………………..
Financial Management of Community Associations | Budgets and Replacement Reserves
What is a Budget? A budget is an annual financial plan for an organization – in this case, a community association. A budget provides an estimate of a community’s revenue and expenses for a specified period of time. It is the first step in managing your community’s financial operations. Read the article………………….
Are Bargain HOA Assessments Really a Bargain?
Assessments can be a big determining factor for people looking at buying a property in an Association. The amount charged can vary drastically from one HOA to another, and because people often look at the dollar amount and not the whole picture, you might fear shooting yourself in the foot with assessments that are too […]
The Hidden Dangers of Low Assessments (IL)
There is an old saying that goes “penny wise and pound foolish” which is perfectly apt when one discusses homeowner association finances. In other words, in an attempt to save money, associations might fall victim to unwise decisions in the short-term in an attempt to keep assessments low but ultimately regret the decision later when […]
Answering the Age-Old Question: “How Are My HOA Funds Spent?”
Homeowners may not always understand how HOA funds are spent. Often, they pay their monthly, quarterly, or annual assessments, and when they look around, they don’t see any noticeable improvements in the community. This lack of obvious upgrades leads to frustration and confusion . . . and maybe even some suspicion. After all, where is […]
Selling a Special Assessment
One of the most challenging experiences a board member faces is deciding when it’s necessary to assign a special assessment. Homeowners may not always immediately understand how critical it is to fix certain infrastructure issues. Additionally, if a natural disaster, such as a hurricane, were to hit your association, homeowners may themselves have homes in […]
When Raising HOA Dues Is a Good Idea
Dues are always a hot topic for HOAs. The collection and allocation of dues can be a touchy subject for the membership since it directly affects their wallets. However, successful homeowners association management wouldn’t be possible without everyone sharing the cost. Board members are put in a tricky situation: they want to please the membership […]
Navigating the Dreaded Assessment Increase
Well, it happened again. I was on the phone today with a very nice woman who had fallen behind on her condominium assessments. As we discussed a payment plan to help get her caught up, she said, “When I moved in here were so much lower.” I didn’t say anything. We moved on to discuss […]
4 Ways to Trim Your HOA Budget
Typically, homeowner associations will appoint a treasurer to keep track of monthly expenses, create a working budget, and allocate funds appropriately. Yet, it is not the sole responsibility of the treasurer to manage the budget. One of the essential duties of the entire HOA board is to continuously review the annual budget and make adjustments […]
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 […]
Planning Your Annual HOA Budget
Whether you are planning on taking the burden of the yearly budget upon the shoulders of your HOA board, or you plan to get the assistance of an HOA management company, the annual budget is one of the most important items on the agenda of any homeowners association. Here are seven considerations that should be […]
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, […]
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 […]
Proposed budgets must be submitted in advance (IL)
Q. I thought the proposed budget had to be mailed to the owners 25 days prior to the board’s adoption of the budget, for all types of owners’ associations in Illinois. Is that correct? Read the Q&A……………………
Ask Val: Finding Savings in Your 2019 Condo/HOA Budget (VA)
Question: I’m the Treasurer at [redacted Condo Association] and we’re working on the 2019 budget. What’s a good way for us to save money in the budget without compromising the health and maintenance of the building? Read the Q&A………………..
Ask Eli: Find Savings In Your 2019 Condo/HOA Budget (VA)
Question: I’m the Treasurer for my condo association and we’re working on the 2019 budget. What’s a good way for us to save money in the budget without compromising the health and maintenance of the building? Read the Q&A……………
Budget Season (MD)
This is a busy time of year for Board Members and Property Managers, as many are working n their budgets for next year. We have a few tips to guide you through this process. Maryland Clients – Please do not forget to comply with the laws regarding the adoption of your budget. As such, your […]
Boost Property Values with HOA Money Management
Research has confirmed it: smart HOA money management is important to property values. For example, recent study on the “Impact of Reserve Fund Strength on Home Values” was particularly revealing. It found that among comparable condo associations in demographically similar neighborhoods, the sale price of units in communities with a strong reserve fund averaged 12.6% […]
5 Tips for Presenting HOA Budgets
As a board member, preparing an annual budget and establishing assessments for your association falls squarely within your fiduciary duty. The budgeting process can be long and involved, but it is the board’s responsibility to make sure that sufficient funds are readily available to maintain common areas, pay bills and keep things running smoothly. […]
Things an HOA Board Should Consider When Planning Next Year’s Budget
Preparing next year’s budget for your homeowners is one of the most important undertakings for the HOA board. Fiduciary responsibility is something you pledged to look after for your community and this is an area where that really comes into play. There are a few things the Board should consider for next year’s Association budget. […]
Condominium and Homeowners Association Budgets Must be Ratified (WA)
It’s community association budget season! Due to the recent implementation of WUCIOA (see my previous post about this here), all Washington State condominium and homeowners association budgets must be ratified by those associations’ owners in order to take effect. Read the article………………