What Elements Should Be Included In The Homeowners Association Budget?
Posted on September 17, 2020 8:00 AM by HOA Sites
Categories: HOA Website
An HOA board is tasked with overseeing the development and maintenance of a community which requires a budget for the association to map its future. Whether the budget is tens of thousands, hundreds of thousands, or more, every HOA needs one to create a secure and enjoyable space for residents to live. If your HOA website has posted the association’s new budget, take the time to review it and ensure it contains all the necessary elements.
Every association incurs expenses regularly from the services it offers homeowners on a weekly, monthly, or seasonal basis. Each year, the new HOA budget must identify all the services an association will provide to homeowners and the contractors who deliver them before determining and highlighting the cost. These are categorized as operating expenses.
The HOA board is expected to not only plan for future maintenance, replacement, and repairs but to also create a reserve fund that holds the money used to finance those projects. Reserve funds are important as they enable associations to avoid lawsuits by making sure the community assets remain in the best possible condition. An HOA budget requires a reserve fund that was prepared after a specialist carried out a reserve study. In that, projects should be identified that must be executed in the next few years and decades, as well as their associated costs.
Source of Revenue
Aside from dealing with the operating expenses and reserve fund, the association will usually list the sources on the HOA website that they use to generate the money needed to complete the work. Most HOA boards rely on the fees collected from homeowners to finance their budgets; though, many communities aren’t opposed to the organization having fundraising events to bolster the association’s revenue.
HOA boards are encouraged to consult with experts such as attorneys and property managers to ensure their budget expectations are realistic. These are just a few elements that the board should include when creating a budget.
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