Everything Your Board Members Need To Know For Annual Disclosures
Posted on August 19, 2019 8:00 AM by HOA Sites
Categories: HOA Website
Board members that have the best interest of the association in mind do everything to ensure the well-being of the community. From addressing homeowners’ problems on the HOA website to attending board meetings, they need to know how to solve issues in an efficient manner. But, what about complying with any requirements of the law? In that regard, do your board members understand the code that applies to annual disclosures?
What Does The Law State?
Most states have passed legislation that defines the way HOA boards manage their communities. In one state, for instance, they have a portion of civil code that governs condominiums and development communities. This Act contains the provisions for annual disclosures, breaking them down into three categories; the annual policy report, the annual budget report, and the miscellaneous report. Below is an overview of the requirements.
The Annual Budget Report
Some of the disclosures that fall into this category include the full budget or a summary showing the projected revenues and expenses, an overview of the reserves, and data on outstanding loans. The annual budget report needs to be issued one to three months prior to the start of the association’s fiscal year.
The Annual Policy Statement
Homeowners’ rights and policies on how rules are enforced fall into this category, such as what happens when a homeowner fails to pay an assessment. Other items include the procedures used to resolve disputes and how they oversee physical changes to property, like landscaping.
Unlike others, this category doesn’t contain specific requirements. It includes items such as changes in management, election results, notices regarding board meetings, and assessment increases. Failure to comply with these requirements can result in the association losing its Certificate of Good Standing. That can lead to issues like state-imposed penalties and an inability to file lawsuits. Aside from making a disclosure, you could keep members in the know by posting relevant information on the HOA website.
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