Across the country people are wondering how and where their HOA dues are being used. It’s a good question to ask, but it also one that an HOA board should be able to answer quickly and easily. To reduce miscommunication with homeowners, the board first needs to understand these things about HOA dues and openly […]
Five Financial Mistakes That Can Be Devastating to Your Community
Being part of an HOA board is a job that comes with a lot of difficult responsibilities. When it comes to the financial side on an HOA, there are so many moving parts that it can get overwhelming. Avoiding these five financial mistakes can help protect your HOA from getting into a difficult position financially. […]
5 Ways to Build Transparency as Condo Laws Tighten Financial Disclosure Requirements
Transparency in operations is key for condominium associations to build trust and ensure accountability amongst community management. Did you know that an association’s financial health and management of association finances is often a deciding factor for potential condo owners to buy or shy away from buying? Potential owners will want to know if the association […]
5 Tips about How HOA’s Determine HOA Assessment Rates
There is a lot about the question how are HOA assessment HOA rates determined that you may not know; indeed, here are five tips that everyone should keep in mind regarding this topic. Read the article………………
What Boards Should Know About Finances: Keeping Your Community in the Black
Money, money, money. The world runs on it. And your building’s well-being depends on it. The issue is not just having funds, but managing them. Handling the finances for an entire building or association is a major responsibility, and boards—even those made up with seasoned members—need to stay on top of their community’s performance. That […]
Is a Loan Right for Your Community?
At a time when many condominiums are old enough to require major repairs or renovations, community associations can be overwhelmed by the cost. The word is definitely out that a community association loan may be a viable option for many communities. In contrast to a lump sum special assessment, the ability to pay a loan […]
Money Doesn’t Grow on Trees, or Does It?
What can a condominium do when it is facing a large deficit or an unexpected repair project has depleted the reserve fund? Typically, the condominium would levy a special assessment or increase the monthly fees. In some cases, a loan might be the best option for the condominium and its owners. Some condominiums have found […]
Making Special Assessments Work: Fixed Incomes, Low Incomes, & Hard Times
For residents on fixed incomes, or those who are already struggling to make ends meet because of a job loss, illness or divorce, any hit to their already-stretched-to-the-max budget can be devastating. So when a board levels an assessment on the residents of a co-op, condo, or HOA because of an emergency repair, an unforeseen […]
Keep Track of the Money: Finance and Condos Part 2
This blog is part 2 of “Keep track of the money: Finance and Condos.” Financial policies are the topic of this post. Part 1 covers reviewing financial statements and condo fees, and Part 2 provides insights into the art of overseeing expenditures. Directors make lots of decisions that involve money. Having policies in place for […]
Keep track of the money: Finance and Condos
Be sure to check out my post on governance policies for condo boards, and an earlier post on best practices for condo board communication. Financial policies are the topic of this post. I have divided into two parts. Part 1 covers reviewing financial statements and condo fees, and Part 2 provides insights into the art […]
Back From the Brink: Financial Ruin — and Recovery
happens infrequently, but when it does, it can be an enormous challenge: a co-op corporation or condo development has a long-running squabble with the building sponsor/developer, falls victim to long-term mishandling of funds — or outright fraud — by the board, or has to undertake a major unexpected or ill-prepared-for repair project. All of a […]
The Importance Of Protecting Your Association’s Money
One of the most important responsibilities of a property or condominium association board of directors is protecting the association’s funds. In doing so, it is important for the board of directors and management company (if you are professionally managed) to understand the necessary internal controls and available insurance coverages to properly protect the association in […]
HOA Funds Transparency
Just about any situation can deteriorate when there is no transparency. This is true in any business setting, including an HOA. With good transparency, homeowners know exactly the direction in which their neighborhood is heading, which leads to less problems. Read the article……………..
Financial Record-Keeping: Following the Money
Whether your community is a condo, HOA, or co-op, proper record-keeping is the difference between a healthy property and one headed toward peril. And while meeting minutes and election results require well-organized documentation, records such as bills, invoices, bank statements, receipts and taxes informs a community’s long-term financial health—and how these financial records are stored […]
5 Signs a Condominium Association May Be in Trouble
Condominiums. Not always everyone’s first pick for housing, however the combination of affordability and location usually make them an ideal choice for city dwellers, especially here in DC. Many people don’t realize how communal condo living can be, particularly when it comes to finances. They think you just magically pay your condo fee, and everything […]
Paying Maintenance with Credit Cards (NY)
Late last year, along about November, Ira Meister started noticing something strange. A lot of people living in co-ops and condos started paying their monthly charges with credit cards. Read the article………….
HOA Board Function: Protect Assets
Part of a board member’s fiduciary obligation is to protect the assets of the association. In addition to money in the bank, these community assets may include tennis courts, golf courses, pools, tot lots, utility rooms or other recreational areas within the association. Often these assets are valued in the millions of dollars. Read […]
Capital Improvements: Getting Financing and Board Approvals
Even if your condominium or homeowner’s association (HOA) is a fortified castle atop a hill and surrounded by a moat, one day, someone will hit it with a really big rock, and thus it’s inevitable: work will be done, repairs will be made, the sun will set. But some projects are of greater consequence than […]
How to Save Your HOA Board Money Without Raising Owner Dues
Are you looking for ways to save money in your homeowners association? After necessary repairs and upkeep, it seems like there’s never enough dollars to get all the jobs done. Your fellow HOA board members all agree that a last resort is raising monthly dues, so instead, consider some of these unique ideas that both […]
Maintenance vs. Capital Improvements – What’s the Difference?
Maintaining your buildings’ assets is not a one-size-fits-all proposition. The common areas require a broad range of routine maintenance and repairs to keep them looking good and operating smoothly. Maintenance activities can include simple lightbulb replacements, housekeeping and paint touch-ups in hallways and garages, landscaping, irrigation repairs, pool cleaning, elevator maintenance and other related tasks […]
What to Do If You Have to Levy a Special Assessment
In a previous post, we talked about the importance of adequately funding your reserves as an HOA. While it would be ideal for every HOA to have a healthy reserve fund that could cover almost any unexpected cost, that’s not always the case. Not all associations have built up a reserve over time. Some may […]
Top Financial Fails of Community Associations
Community associations are like businesses; they need money to function and thrive. However, like many businesses, they can make mistakes, leading to financial fails. Check out these three top financial fails and learn how your association can avoid them. Read the article…………
Condominium Special Assessments in Florida: Understanding the Business Judgment Rule
Special assessments, under the Florida Condominium Act, are those assessments imposed against condominium unit owners, other than those assessments required by the association’s annual budget. See 718.103 (24) of the Florida Statutes. Regular assessments, on the other hand, are fees collected from condominium unit owners for the payment of common expenses of the association. […]
How To Bulletproof Your Association’s Biggest Asset: The Money (Pts. 1-4)
If you are elected treasurer of your community association and accept the challenge, there are many policies and procedures you will need to learn before you start planning budgets, collecting assessments, and signing checks. Board members and officers of all community associations in America should read the 35-point list of financial procedures detailed in “Escaping Condo […]
Money Talks: Communicating About Condo Finances
Imagine sitting down with your significant other to pay the monthly bills. You both put your checks into a joint account and know how much there is to take care of expenses, or so you think. Out of his wallet your husband pulls out receipts for a new suit, dinner with his friends and a […]
Money Talks: Communicating About Co-op/Condo Finances
Imagine sitting down with your significant other to pay the monthly bills. You both put your checks into a joint account and know how much there is to take care of expenses, or so you think. Out of his wallet your husband pulls out receipts for a new suit, dinner with his friends and a […]
Ways to raise funds for big-ticket association projects
Sooner or later, every community association will face an expensive remediation project. Roofs eventually leak, and boilers conk out. Sidewalks, parking lots and tennis courts require periodic resurfacing. Hallway carpeting wears and tears. When your association’s time comes, how are you going to pay for it? Read the article………….
Community Association and HOA Board Finance 101
Every month, your property management company, a board member, or someone with financial experience should be producing some sort of financial reporting for your community. These reports provide an overview of your community’s revenue and expenses against your financial projections or budget. If not, this should be your first order of business at the next […]
Filing for Chapter 11 bankruptcy reorganization: viable option for condo associations, HOA’s
While the housing market in South Florida is continuing its recovery, many of the community associations in the region are still struggling with delinquencies by unit owners in the payment of their association dues. The shortfalls in the associations’ collections, which in some cases have also been exacerbated by gross mismanagement or even theft by […]
2014 Community Association Financial Survey
In 1996, Berding|Weil published “Latent Liabilities” a treatise which explored the long-term impact of underfunding of the reserve accounts of community associations. Some of the data came from our clients, and some from Levy, Erlanger & Company. We predicted that most multi-family community associations were severely underfunded for long-term maintenance and repairs and we opined […]
Protecting Against Embezzlement in Your HOA
An excerpt from a news story read: “Bridgett Freeman of Sheboygan stole more than $11,000 from the Westridge Homeowner’s Association in West Bend. Thursday, she was sentenced to six months in jail and three years probation, and was ordered to pay back $11,617.41. She said she was sorry.” Read more……….
Financial Firestorms: Surviving Fraud & Neglect
In an upscale lakeside community near Orlando, the pace of home sales unaccountably accelerated in 2009. At first, the new owners paid their assessments and fees. Then some of the homes were rented to subtenants, and others changed hands again. Their monthly fees went into arrears, and assessments became delinquent. Read more……..
8 Ways to Protect Your HOA’s Finances
As a member of a homeowners association (HOA) Board of Directors, one of the most important issues you have to manage is the community’s finances. It can be a time consuming task, but one that is essential for running a good HOA and for avoiding any potential lawsuits. The good news is that there are […]
Beginner’s Guide to HOA Finance, Budgeting, and Accounting
When it comes to interpreting your HOA management company’s financial reporting, it’s helpful for HOA members to understand the accounting process used by their management company, especially if they wish to maintain and manage community funds in a practical manner. Below, you’ll find a guide to some basic accounting terms and concepts used by HOAs […]
Now is The Time – Check Today’s Financing Options for Projects
If you’re on a board in a New England condo or HOA, now is the time that you should be talking about making any of the major improvements that you’ve discussed or considered over the past few years. Even if you have a plan in place to do a roofing project or paving job in […]
How an HOA Board Should Use the Reserve Fund vs. Operating Fund
Funding community operations by an HOA Board is one of the most important, if not the most important, functions of the group. Properly overseeing day-to-day actions and long-term projects insures the neighborhood will have a continuous supply of funds to keep the community running effectively. Read more….
Boards can take the surprise out of special assessments
Suppose the decks at your community association are badly deteriorating. The board hires an engineer, who advises total replacement within a couple of years. Not all the owners have decks, but those who do will be assessed about $4,000 each. The board wonders: When should it tell the deck owners a special assessment is coming? […]
Understanding CPA Service Levels: Compilation, Review and Audit. A Primer.
The controlling documents of most co-ops and condominium associations outline the requirement for the preparation of your financial statements. In addition, several states have minimum financial statement requirements. It’s important for boards to understand that there are different levels to what a Certified Public Accountant (CPA) reports. Here’s a primer for condo and co-op board […]
Protect the HOA / Condominium Operating and Reserve Accounts
I know anyone that has any affiliation with an HOA or Homeowners Association has heard of someone stealing or trying to steal money from the Community. The scams are often as simple as writing a check to themselves, either as an administrator, treasurer or president. This is the one constant to which no one paid […]
Condo Associations & HOAs Losing Millions Nationwide
According to recent reports, more than 1.2 million worthless checks enter the banking system every day in the United States. Check fraud losses account for more than 20 billion dollars per year and the number of cases is increasing by approximately 25% each year. I know from my own experience with community associations that fraud, […]
Steps that should be taken to protect a community association’s funds
When property management companies go out of business, they can leave behind trails of unpaid bills and large losses from community associations’ reserve and operating accounts. There are many ways to protect your association funds. Read More……
Boost reserve funds with cell phone antennas
Savvy Home Owner’s Associations (HOAs) should always be looking to augment their reserve funds without raising fees in the community. There are several ways to do this if you think creatively. Some common strategies include the addition of coin-operated washer and dryers or renting out common area rooms or space for community functions. One thing […]
Using Common Sense Could Lead to More Common Cents in Your Community
I am a lawyer. I read, on a regular and ongoing basis, governing documents, statutes, contracts, and other such documents. I am asked to provide my opinion on various legal issues and, in doing so, I review the relevant documents and applicable law, and provide a course of action. And yet, all the legal knowledge […]
Understanding Finances: Reading Between the Line Items
For a crystal-clear picture of how an association is doing, there are few better lenses than the community’s budgets and financial reports. From an investment perspective, they show the shareholders, managers, tenants, owners, and board whether the property is solvent or not. If the numbers add up and the monies coming in and out balance, […]
Cash-Strapped? Getting Residents Behind an Assessment
Money is a topic people are often skittish about discussing—especially when the discussion involves rising fees, or having to pay more money for something. When you’re a board member or the property manager of a condo building or residential association however, there’s no benefit to skirting financial realities just because they may be difficult or […]