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. Keeping your budget process transparent and open makes residents more satisfied and limits potential conflicts.
Why You Should Be Transparent During the Budget Process
Many homeowners believe that there is no transparency involved in the budget process and think that the board refuses to disclose any budget details until they are finalized. Because of this, most homeowners may feel that they have no knowledge or influence over the process. There are ways of avoiding this perception if you take certain steps during your upcoming budget season.
Consider Regular Communication On Financial Updates
Consider a quarterly or semi-annual communication that updates homeowners on the budget situation. For example, if you’re over budget and have to increase HOA fees, let homeowners know what’s going on right off the bat so that they won’t be up-in-arms when they find out there’s an increase for the following year.
Consider shorter and straightforward updates
For best results, many professionals recommend shorter but more frequent communications as opposed to a long, annual update that homeowners can’t understand or don’t have interest in reading. Something as simple as a short monthly update, whether at a meeting or via social media, email, or a letter, will go a long way for the homeowners in your community.
Overcommunicating Is Better Than No Communication At All
And if you feel that you are providing too many budget updates to the community residents, remember that It’s much better to over-communicate than not communicate at all. Little or no communication will create a feeling of mistrust toward the residents to your association. If you explain everything clearly, especially major budget changes, residents will feel more included and will have higher rates of satisfaction with the community.
Make sure to communicate to residents that attending the annual budget meeting is not the only way of learning about the process. Many HOAs create monthly financial reports online, which is a great resource for homeowners. Encourage residents to read all online resources, and help them understand the process. It will make them feel like they are a part of the association, and will answer a lot of their questions.
Get Them Involved
You may also consider getting homeowners involved in your association’s finance and budget committees. You can do this by sending out a request for volunteers for these committees, allowing those who are interested to have a say in the budget process. Doing this can decrease the levels of confusion among the residents, and make the whole process move much more smoothly.
How to Be Transparent After the Budget Process
Once the budget has been approved by the board and presented to homeowners, make sure to be transparent about any big changes you made, such as an increased HOA fee.
Communicating an Increased HOA Fee to Homeowners
The first thing you should do is write a notice to the homeowners, composed by the board or your management team. Make sure to put this notice in writing, at least 30 days before the increased fee goes into effect. You can let community members know of any increase in fees by mailing a notice, and can also hold a public meeting to describe why the board decided to increase the HOA fee. If a homeowner disagrees or has questions about a line item, try to clearly explain the rationale for the specific item. If they don’t accept your reasoning, you can invite them to have a one-on-one discussion to try to resolve any disagreements.
Clark Simson Miller Can Help Manage Your Community’s Finances
Budgeting can be rough, and often forces you to make tough decisions that will rattle some of your residents the wrong way, and potentially lead to disagreements. But if you make sure to keep the budget process transparent, you will keep residents in the loop and reduce confrontations and misunderstandings. If you need a professional management team to help you communicate better with your residents, give CSM a look. We are a full-service HOA management company that offers a wide range of management services, such as homeowner communication, collections, back-office services, and more. To learn more about how CSM can improve your community, contact us online, or give us a call at (865) 315-7505.