Everything Your Board Members Need To Know For Annual Disclosures
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.
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.
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.