How To Effectively Present HOA Budgets

Preparing your homeowners association annual budget takes a lot of time and effort. But, HOA budget presentation is an entirely separate undertaking — one that not many people know how to do. Thankfully, there are some tips you can adopt to effectively present HOA budgets to your community.


Present HOA Budgets the Right Way

view of fiduciary duty word through eyeglasses | how to present a budget

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 and presenting an annual budget.

Fiduciary duty can be a concept that is difficult for HOA board members to understand. What is important to remember is that HOA board members have been elected by their communities to represent the HOA organization.

What this means is that board members have a fiduciary duty to act as agents on behalf of the HOA and the best interests of their community. It is important to make budgeting decisions that are in the best interest of your community and its residents to uphold your fiduciary duty.

Residents also need to have confidence that HOA board members are following their fiduciary duties to the best of their abilities. If residents begin to doubt the integrity of their HOA board, it can potentially legal disputes in the future that otherwise could have been avoided.

But, after HOA budget preparation comes HOA budget presentation. Here are some tips on how to present a budget effectively:


1. Include a Comparison Column

When you are deciding how to present your budget, it can be valuable to have a comparison between last years’ expenditures and the projected expenditures for the upcoming year. Residents are visual and will benefit from seeing exactly how the funds are going to be allocated. If your board fails to show where the dues are going, residents can begin to not trust your HOA, which can be counterproductive to your progress.


2. Be Sure That Your Budget Is Accurate

It is important to have several board members look over the budget to be sure that all of the upcoming changes are correct and that nothing has been left out. Residents do not respond positively to budget changes later in the year that could have been presented when the initial changes for the year were being made. The most organized HOA boards will have their budgets secured.


3. Explain Any Upcoming Changes

If your HOA board is making upcoming changes to the budget, they should also be explained clearly. One way to do this is to include a notes column on the side margin of your budget comparison chart. If a resident can see a comparison chart and then there are sections explaining the upcoming changes, it will help them understand your board’s plans. If residents are not able to understand what the upcoming changes are and why they are occurring, they will not support the board’s decision.


4. Write a Professional Cover Letter to Present Your Upcoming Budget

man looking at paper | hoa budget presentation

Residents respond to professionalism. They want to see what their dues are paying for. If your HOA board prepares the upcoming budget in a professional packet complete with a cover letter introducing the changes that will be occurring, residents will be more inclined to take your HOA board seriously.

Be sure to take the time to draft a cover letter with your board members to get their main messages across that you want residents to understand. Make sure that your changes are sending across an effective message and strategic plan for the upcoming year.


5. Consider Presenting Upcoming Resident Involvement Projects With the Budget

Many successful HOAs have board members who encourage resident participation. When presenting the budget for the upcoming year, it would be useful to announce new communities that residents can take part in. HOAs have implemented committees including neighborhood watch, events planning committee, among others. Providing your residents with leadership opportunities is a great way to get them to support the objectives of your community and also get behind your budget projections for the upcoming year.


6. Visual Aids Might Help

Not all community members will understand cold, hard numbers. Some people need visual aids to help them see the entire picture. When you present HOA budgets, it may benefit you and everyone else to include graphs and charts. By doing so, residents can get a clear understanding of which line items need more resources than others.


7. Seek Outside Expertise If Necessary

two women sitting on couch and reading documents | presenting hoa budgetsThere are times where HOA boards do need outside assistance to ensure they are complying with state and local laws. If your budget has issues that your HOA board members are not sure about, then it is wise to speak with a lawyer or accountant that has expertise in the area that your HOA board is lacking.

HOAs that take the time to obtain outside expertise is better off in the long-term because they may be able to avoid common pitfalls that could cause a lawsuit in the future. When seeking outside advice, it is wise to research carefully which professionals have the expertise in the areas that your HOA board needs assistance.


8. Have a Final Review With Your Board

Your entire budget presentation must be proofread and check for content. Even if you do not have a great deal of time, board members must find space in their schedules to polish the presentation. This way, you can ensure it is ready for distribution. These extra efforts will further assist residents in supporting any changes or increases in community dues.


9. Be Prepared for Resident Suggestions & Complaints

Some residents may view the period where your budget gets decided to be a time to raise grievances or make comments. It is important to consider the residents’ requests. It will help you when you present substantial changes in the budget for the upcoming year.


Presenting HOA Budgets Made Easier

Board members like you might find it hard to present HOA budgets, especially if you have never done it before. But, a surefire way to make a budget presentation go smoothly is to come prepared. Make sure all information is accurate, write a cover letter, and explain every line item to community members. Visual aids and comparison columns will also help. Finally, it is important to have an open mind and welcome member input.

If you are having trouble with HOA budgets, you might benefit from hiring a remote HOA management company like us. We are just one call away.