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. HOA Financial Reports and The Board’s Responsibility To be able to run an HOA effectively, HOA board…
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…
As the year comes to a close, Condo/HOA boards need to assess which issues are going to face their organizations in the upcoming year. The Condo/HOA boards that plan well will be able to avoid many common pitfalls that disorganized associations will face. When trying to pinpoint what the top pressing issues will be for…
There has been a great deal of debate about how to successfully afford housing for the younger generations in the United States that have larger financial strains due to excessive debt or limited credit history. The federal government has made an effort to create a policy that enables less-established prospective buyers to have the potential…
When deciding to relocate to a new state, it is important to be constantly aware of new legislation that is going into effect related to your housing circumstances. This is also important for established residents to remain informed about their housing development and what protections they have. This is particularly true in California where recent…
6 Practical Reasons Why You Should Outsource HOA Accounting As volunteers, HOA board members are not always able to sufficiently manage their responsibilities, either because of a lack of expertise or due to time constraints. One of these responsibilities is to handle the financials of the association. A good way to make sure you are…
What is an HOA reserve study, and should you do it now? If you’re one of the board members and wondering what HOA reserve studies are for, this might just be the right time to learn more. A homeowner association reserve study is always a useful tool to have for budgeting. It’s true whether you…
What Are The Standard Financial Statements For An HOA? Knowing what the HOA standard financial statements are, as well as how these documents represent the movement of money within a homeowners association, is vital for transparency and accuracy. Homeowners pay monthly/annual dues. The last thing they’d want is to be kept in the dark as…
Proper HOA board budgeting is crucial in keeping an association operating year after year. However, issues may come up in a self-managed board with no financial experts in the team. HOA board budget mistakes can lead to serious conflicts between the HOA board members and homeowners. It’s the last thing any HOA management team wants…
HOA audit time is always a busy time for associations. At the end of the year, HOA board members have to start considering whether they need to get a financial audit started. Usually, it is a toss-up between getting a financial review vs audit for HOA books. for some HOAs, there is a need to…
The Best HOA Accounting Method: Cash, Accrual, Or Modified Accrual? HOA accounting is a vital part of operating a homeowners association, but it can be very tedious and difficult. Because it is so important, you want to avoid inaccurate or incomplete financial reports at all costs. The first step to financial success is to use…
How to Find a Reserve Study Firm for Your HOA Your HOA’s reserve fund is very important to have in the event of unexpected emergencies. Much newer or even established HOAs are still not sure how to properly establish one of these funds. What is important to realize is that many of these funds are…
The Difference Between HOA Maintenance vs. Capital Improvement There is a great deal of confusion with HOAs about how to properly allocate their various expenses in their accounting practices. The reason for this is that there are very strict regulations for HOAs to follow and many different misunderstandings about where to allocate each expense in…
How to Keep Your Community Association Free From Any Conflicts of Interest Conflict of interest is a real threat to your HOA’s integrity and reputation. As a board member of a community association, you should understand what this means, and how to recognize and avoid it. In this article, we will give you some tips…
Why You Need to Use Quality Vendors for Your HOA When choosing a vendor for your HOA, you may be tempted to go with the cheapest option. It is important to remember though that going with the cheapest option is rarely a good idea. When you select your next vendor, make sure you consider long-term…
How To Keep Snow From Hurting Your Community Budget Any homeowners association manager will tell you that one of the most stressful events is when unexpected expenses come up. Being prepared and thinking ahead can be one of the smartest things HOA management does when ensuring a community is running smoothly. How Can Snow…
How To Improve The Financial Stability of Your Community Association When it comes to having a homeowners association that runs smoothly and is proactive in their planning and financial tracking things can be great. However, by not having proper systems in place or not having someone vigilantly keeping files and records in order things can…
The Right Bank For Community Association Is Important Getting the financial orders of a community association well planned and prepared is vital to help a homeowners association run smoothly. Having these logistics planned and managed well keeps all association board members on the same page and in the know about current finances. Before picking an…
What Your HOA Fees Should Cover When it comes to joining an HOA, it is common to wonder where the fees are going. Sure, you can see some aspects of what an HOA does to help a community. However, in this article, we are going to cover some of the specifics of where the association…
4 Tips For a Strong HOA Financial System For HOA board members, checking the financial reports may not be at the top of your list of tasks to complete your role. Seasoned board members agree that knowing your association’s finances is vital for making good decisions for the association. Keeping board members up to date…
9 Financial Tips for Your Community Association Having the finances well-organized in your Community Association is essential to maintain a great reputation amongst current and future residents. Many HOAs are not responsible with their finances, which causes them to not operate at their maximum potential. To learn more about how to properly manage your Community…
What to Consider When Planning a Community Association Budget Planning your Community Association Budget is essential. If you do not organize your finances well, you will not be able to cover the costs of your residents, which will lead to questioning your practices and ultimately, a lower level of resident satisfaction. If you are trying…
How to Get the Most Out of Your Community Association Budget Planning your Community Association Budget is no easy feat. Many communities are not actively trying to find ways to save money. This is a major mistake because if you can use money effectively, then you will be able to do more for your residents,…
How to Plan a Budget for a Community Association Planning your association’s budget isn’t easy. But properly planning out the budget is a great way of stabilizing the short-term and long-term financial prospects of your community. The budget covers plenty of things, such as maintenance, community improvements, social events, and other items that affect your…
Why You Should Be Transparent With Your Community Association Budget When you create your next community association budget, you will likely make some decisions that are unpopular with certain members of your community. To avoid unnecessary conflicts with community members, it is important to make residents feel like they are included in the budget process.…
Important Information About Modified Accrual Accounting Using Accrual Accounting or Modified Accrual Accounting are two of the most popular forms of accounting methods for HOAs. At first, it can be difficult to master Accrual Accounting or Modified Accrual Accounting for those that do not have prior experience in the accounting sector. To learn more about…
What Does HOA Mean? Many communities have HOAs in the United States. HOA stands for Home Owners Association and they are located in many diverse parts of the United States. Recently, there have been several disputes surrounding them that could have easily been avoided if they were better organized, transparent, and more fiscally responsible. If…
When Are HOAs Permitted to Require Special Assessments? Many residents who move into a community with a homeowners association fear their HOA requiring a special assessment. To fully understand special assessments, it is important to know how an HOA utilizes its money to cover the necessary expenses of its community. Now, let’s discuss HOA management…
Important Information About HOA Dues The homeowners association dues are an aspect of living in a community with a homeowners association in place. However, this can be confusing to many residents. Many individuals do not want to pay for extras that they are not using. Also, there is a great deal of confusion about when…
How to Take Minutes During Your HOA Board Meeting HOA board meetings are necessary to have transparency. The reason for this is that there are several aspects related to management and finances that need to be discussed. HOAs are required to keep a record of their board meeting minutes; however, it is important to ensure…
The Difference Between POA, HOA & COA Many individuals struggle with assessing whether they want to work with any form of HOA, POA, or COA when they are trying to find a new place to live. Before signing any contract where the community you will be living in has any form of HOA, POA, or…
5 Reasons to Collect HOA Fees Online Previously, HOAs collected many of their fees via traditional check. This method took a great deal of time and effort from the association staff along with residents to organize their finances and schedules to make their payments on time. Today, with the development of the Internet, many options…
5 Benefits of Collecting HOA Payments Online Many HOAs are still using traditional check payment methods that can slow down their cash flow and cause inconvenience to their residents. Furthermore, these traditional payment methods have annoyed residents and their HOA. But this can be avoided now. Even though integrating an electronic payment system is costly,…
What Is an HOA? A homeowners association or HOA is an organization overlooking neighborhoods within a community or subdivision. The association creates and implements rules for the residents. People who purchase property within the jurisdiction of the HOA will automatically become members. Like any other organization, there is a monthly fee for homeowners associations. Fees…
What is a COA? A COA or Condo Owners Association is an organization that oversees, regulates, and maintains condo properties. This includes the building itself, the parking lot, lawn, playground, etc. The COA creates and implements rules for the residents and their condo units. People who purchase a unit under the jurisdiction of a COA must…
Legal Responsibilities of Home Owner Associations Typically the rules regarding when a first meeting should occur will depend on when the first sale of a unit in the community is completed. Usually, it is within a certain amount of time, such as 3 or 6 months after the first sale. Having a lawyer working with…
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 assessments, vendor credits, late fees, or any other outstanding source of income. It is essentially a list of every account that still…
The Best Option for Your HOA Could Be Self-Management with Support If your community has less than 200 units, chances are that your HOA is self-managed. It makes sense. Smaller homeowners’ associations do not have the funding, or need, to be professionally managed by a full property management company. The downside of being self-managed, is…
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…
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…
HOA Accounting Services Managing an HOA can be a time-consuming job. When all the members of the board of directors are volunteers with full-time jobs, families, and social lives, taking care of the many aspects of property management can be difficult. Sometimes, it can become too much, and details can start to fall through the…
Hiring a Financial Manager for Your Community All too often, communities start looking for a new property manager because their current manager did not properly keep up with the accounting. Bills start to go unpaid, invoices do not get sent out on time, the books are not kept up with; it can become a real…
Finding Help for Self-Managed HOA There are many benefits to self-manage an HOA. Obviously, it is much cheaper than hiring a full-time property management company, and the association board of directors has much more control over the community. But many community associations are still hesitant to either remain self-managed or leave their management company. The…
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…
What is an 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. Formula for a Successful HOA Balance Sheet Assets = Liabilities +…
A 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…
HOAs, regardless of their size, need a formal structure in order to function in the best way possible for their residents. By having a formal structure in place, it is easier to resolve potential disputes that may occur down the road. Whether you are on the board of your HOA or simply a member, it…
There are many HOAs located all over the United States. Regardless of their size or location, they all require strong financial management. External management services benefit communities large and small. They enable the HOA to focus on more community-based activities. HOA Bookkeeping is an essential aspect of association management. HOAs that have efficient bookkeeping practices…
In the world of HOA finances, there are two principal accounts: the operating fund and the reserve fund. Operating funds pay for daily expenses and ongoing maintenance of the assets of the association. They represent the majority of the transactions in an HOA. Reserve funds, on the other hand, are like the community’s savings account.…
There are a million ways where things could go wrong when it comes to living in a community and being part of a homeowners association (HOA). Nonetheless, it is without a doubt that the HOA board plays a huge role in a community. The HOA board’s responsibilities include various decision-making processes that affect the common…
There are three main bases for accounting: cash basis, accrual basis, and modified accrual basis. The basis of your accounting determines how and when you record transactions. While it may seem like these are simply three different ways to report the same information, they can have a dramatic impact on how your community or homeowners…
As a member of an HOA board, you are representing your entire community. You should know the responsibilities that come with your position. Chief among these is the financial responsibility you have to your community. Homeowners are paying to ensure their neighborhood is running efficiently. They place their trust in the board to optimize their…
Not all communities are created equal. They come all sizes and income levels, from groups of only a dozen or so condos to developments of a hundred or more multi-million dollar homes. The needs of each community will vary just as wildly. The time and money members are able to devote to their association varies…
As an HOA board member, it is your duty to understand the rules, restrictions, and regulations of the association. Some rules have been in place since the association was created and others may be new additions or amendments to older rules. In any case, it is the responsibility of the HOA board to enforce any…
Amenities. Comfort. Community-living. These are just some of the things that draw people to homeowner association communities. Most, if not all, of the benefits that homeowners expect to receive are provided by vendors. Nobody assumes that the members of the HOA board are going to be the ones out there mowing lawns and trimming hedges…
At the start of every new community, the developer is the sole decision maker. Essentially, the developer acts as the HOA board and takes it upon themselves to ensure the community gets off to a good start. More often than not, a developer will enlist the help of an outside management company to help with…
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…
Sorting through a stack of miscellaneous receipts, contracts, and other documents can be tedious at best. Having no organizational system in place to make that search any easier is downright cruelty. Ideally, every HOA board should take time to analyze their current record keeping habits and consider ways to improve them. Otherwise board members will…
One of the association’s key jobs is the protection of homeowners rights. In fact, homeowners have a multitude of legal rights that it is the responsibility of the board to uphold. Most governing documents confirm these rights, but it is important to remember that the governing documents are always subject to federal and local laws.…
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…
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,…
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…
If you are on the board of your HOA, you may already have been confronted with the question of whether or not to have an HOA audit performed. Because there are three different services provided by CPA firms, it can be confusing to know which of the three to choose. Here is how to determine…
Although technology is making it easier and easier for payments to be made online, many homeowners associations have not yet taken the steps to automate their invoices and are stuck in a time-consuming cycle. Often, HOAs have to deal with the many mistakes that can come through internal manual management of invoices and find a…
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…
Delinquent payments are one of the hardest things to deal with as an HOA board because you may be dealing with people who are your friends and neighbors. Although there are certainly strategies for avoiding delinquent payments, every board will likely encounter this problem at some point. Here are a few ways to avoid…
Spring and summer provide unique challenges for HOAs when it comes to spending and saving money. As the days become warmer, residents and employees alike will begin running their air conditioners at all hours of the day and night, and lawns and gardens will need constant watering to keep them healthy. In order to…
Every HOA board always hopes that the residents in the community will pay their dues on time and a situation never has to arise in which they are forced to call on the help of a collection company to collect the funds. However, almost all HOA board members will have to deal with this occurrence…
Although many HOAs have begun to offer the option of electronic dues to their residents, some communities are still stuck in the age of paper statements and checks. If your HOA has not yet provided this option, here are five reasons to begin offering electronic payment options. Electronic Dues Decrease Expenses in Your HOA…
Homeowners associations exist because of and for the residents. Because of this, many HOAs are concerned with keeping costs as low as possible so that these savings can be passed down to the homeowners. In a shifting economy, keeping costs low can be a massive challenge. Committing to the following five tips will help to…
Tax season is upon us, and if you are new to filing taxes with your HOA, you may have many questions about which forms need to be filed, whether you are tax exempt, and what to do if your HOA has not filed in a couple of years. In this post, we will answer some…
One of the most important tasks of an HOA board is property, legally, and effectively using the funds payed monthly by the residents in your community. The two most basic areas of spending that the board will be dealing with is 1) the daily, weekly, and monthly expenses that are recurring, and 2) unexpected and…
End of the Year Budgeting Tips With the end of the year quickly approaching, it is time to put the finishing touches to the year’s budget and start preparing for the new budget. Your yearly budget is one of the most important considerations of the year. As such, to help your HOA succeed as you…
1. Which tax form do HOAs need to file? Associations generally have two tax filing options available, form 1120 or Form 1120-H. Form 1120 is a regular corporation tax form and is required for commercial condominium associations. However, filing this form can be very burdensome and requires a lot of information from the association. Form…
When it comes to HOA management and the treasurer’s responsibilities, there are a variety of things to consider. Preparing a workable budget and keeping things moving properly happens through the work of a competent treasurer who understands what’s required of them. To that end, here are five suggestions to help a treasurer, whether seasoned or…
It can be tempting for HOA board members to try and handle all aspects of association management themselves. And the need for management can depending on the HOA, but there are a few areas where board members should be more cautious — like the community’s finances. Although it’s up to your board whether or not…
If a homeowner’s association is going to be successful, it needs a strong board of directors. The directors need to understand their roles and pursue their goals with passion. For a board of directors to be successful, they need to understand the weaknesses and strengths of the association. Board members also need to understand the…
Working with an association management company can be a great way to increase the quality and efficiency of your community. But unless you know what to look for, bringing on the wrong management can potentially cause more trouble than it’s worth. To avoid the latter, here are a few tips on what to look for…
Several states have already passed laws regulating the licensing of association managers and other states have been considering legislation. Now, one county of Maryland is taking things a step further. Effective January 1, 2016, Montgomery County is requiring that board members receive training and certification. All residential common ownership communities, including homeowners’ associations, condominiums, and…
Differentiating Audit Bids A general rule of thumb when an accounting firm estimates the fee for an association audit, the main factor they consider is the time they must commit to complete the service requested by the association. The audit fee is then dictated by their hourly rate and the amount of time they will have…
The holidays are always a joyful time in which you commune with family members and have a peaceful break the from the corporate world. But, the holiday season also marks a much less alluring time in association accounting- year-end. If you’re not familiar with the industry you may be wondering what the commotion is all about.…
The decision to hire an HOA management company is a significant choice that can depend on several different factors. Some associations can continue running efficiently through their volunteer board members while others need a manager to keep operations running smoothly and free up time for other tasks. Which side does your community fit into? If…
When you’re on the Board of Directors for your homeowners association and you’re involved in HOA accounting, you carry a big financial obligation on your shoulders. If you’re not prepared for the job, the financial reports and records you’ll have to go through, many of which will be inaccurate, can become overwhelming. It’s necessary to…
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