HOA Management Blog
All members of the HOA board are responsible for the Association’s overall financial health; but the treasurer has specific duties to protect the Association’s assets. These duties—and the authority to exercise them—are found in the homeowners association’s governing documents and also in state laws. It’s a big responsibility, but fortunately an HOA manager can help with many of the details.
Funding community operations is one of the most important, if not the most important, functions of an HOA board. Properly overseeing day-to-day actions and long-term projects insures the homeowners association will have a continuous supply of funds to keep the community running effectively.
Making and sticking to a budget is not a hard concept for someone to understand. You bring in X amount of dollars each month and you have X amount of bills to pay. The amount of your income is spread out to cover your monthly expenses. Theoretically your income determines the expenses you can afford, although in America we tend to take this too far. But your HOA Board doesn’t have to!
Your homeowners association has tax reporting and filing requirements it must adhere to. It can be difficult for an HOA board to understand what these are all on its own. It’s important that your HOA board contacts your Association’s accounting professional for details but below is a brief summary of California HOA tax return deadlines.
When it comes to the annual budget for your homeowners association, it can feel cumbersome to understand and plan. It can also seem like an overwhelming task because you just don’t have a lot of accounting knowledge.
The budget planning process is a lot of work and a large responsibility for the HOA board to prepare. It’s a complex activity that has to start early so the budget can be finalized and approved prior to the beginning of the new Association fiscal year.
You don’t want to be bored with numbers, spreadsheets, dollars and cents. You already know that’s what a budget is made up of. Instead, what actions are the most important for you to actually do to ensure financial success in your homeowners association? There are a lot of pieces and parts that come into play, but following this advice will help you get started in the right direction of financial health for your community.
Many homeowners associations operate on the fiscal year (July through June). If your Association is one of them then hopefully you have your new and improved budget ready to go because July is just around the corner.
As an HOA board member you probably know the basics of HOA accounting, and that the process is reversed from the typical American’s household budget. In an HOA, first expenses are estimated and then the source of revenue is determined, mostly in the form of HOA fees. Check out the article below to make sure that your budget contains all of the basic components to keep your homeowners running smoothly.
For homeowners associations with a January through December budget year, the time clock is ticking to develop a budget for the upcoming year and have the budget approved in time for the association’s year-end mailing. A budget committee can be comprised of HOA board members, members of your community association or a combination of both. How does the budget committee work and who serves on it?
If you are part of a California Homeowners Association, the time to send out your budget and disclosure package is 30 to 90 days before your new fiscal year begins. For those who have a January to December fiscal year, now is the time! Please see the following suggestions to get you over the hump.
An area where a lot of HOA board members get into trouble relate to properly understanding the operating fund and the reserve fund in a homeowners association. If the two funds aren’t properly maintained a Board can be setting up the Association for failure and don’t even know it. It’s crucial that Boards understand how to use the operating fund and reserve fund, and use them correctly so they don’t find the Association in financial ruin.
