Posted on February 25, 2019 8:00 AM by HOA Sites
It is not uncommon for some HOA’s to be faced with unexpected repairs that require considerable amounts of money to solve. Faced with these problems, finding the most practical solution might seem like an arduous task. In most cases, the choice is to choose between using the funds in the reserves or issue a special assessment. Here are some options you can use to ensure major repairs are performed without jeopardizing your HOA’s finances.
Get Advice From A Reserve Expert
Obviously, a reserve specialist understands the HOA’s reserve funds better than anyone else so they should be the first person you get advice from. Their specific knowledge helps them assess the situation keenly and according to upcoming repairs. As well as the reserve study, the specialist might recommend adding the cost as a one-time item or advise you to issue a special assessment.
In case you don’t have a reserve expert, the next best option is to get advice from a financial expert that deals a lot with property matters. That could be an accountant, a property manager, an insurance agent, or even a HOA website manager who’s well acquainted with HOA costs.
Borrowing From The Reserves
Though not ideal, borrowing from the reserves may be your only practical solution. Just ensure you have a plan in place for paying back the borrowed money. Note that in some states, there are laws governing the process of borrowing money from the reserve funds.
For instance, in one state the board is required to notify members about the transfer of money, as well as the reasons involved and the repayment plan. Through the HOA website, the whole process can be kept transparent so homeowners stay informed.
Dealing with unexpected repairs that are not in the reserve study can be daunting but by following the tips above, the task becomes a lot easier. Consider having a reserve specialist and a manager as part of your team to help you overcome the financial aspect of getting repairs done promptly.
Posted on February 11, 2019 8:00 AM by HOA Sites
The funding levels of your reserves can affect property values and the ability of homeowners to obtain mortgages. While looking at the percentage funded can be a quick way of assessing the reserves, it can also be misleading. The association may be funded 100% and still face difficulties due to unforeseen projects.
On the other hand, the association might be 70% funded and efficiently handle expenses throughout the year. Before answering the question of what percentage funding is ideal, consider the following for dealing with unexpected projects without depleting the reserves.
Consider Raising Assessments
Even without a vote from members, the HOA board can legally increase an assessment by 20 percent. Likewise, the board is allowed by law to raise a special assessment up to 5 percent without having a vote. The homeowner association website could be very useful for notifying all members about the increment.
Forms Of Borrowing
There are two ways of borrowing that an HOA can rely on. The funds may be borrowed from the reserves or ask for a loan. If you decide to take money from the reserves, you need a popular vote by the board members and a repayment plan must be in place to replenish the reserves. Borrowing money from the reserves is usually done for small projects while taking out a loan is done for extensive projects.
Most homeowners associations want to have their reserve funding at 100 percent. However, achieving that is quite a challenge and HOA’s have to enforce special assessments on members. Often, this leads to complaints on the homeowner association website and other platforms.
In order to keep your reserves at a healthy level and not put a huge burden on homeowners, set a minimum figure that you must hit; 70 percent would be a good start. From there, track the cash flow in and out of the reserves meticulously, using fair assessment increments when necessary to avoid depleting the reserves!
Posted on January 29, 2019 8:00 AM by HOA Sites
Annual meetings are one of the best ways to keep HOA board members involved and informed. Unfortunately, for most associations, there are always members who tend to be absent for such meetings. An effective way to ensure members have no excuse for failing to attend is to set a date far in advance. Here are more suggestions to help you prepare and encourage people to attend.
Tactics For Getting Them To Attend
As mentioned, you should set a date far in advance so everyone has time to make plans to be there. But that’s not all; consider sending notifications from time to time via email or text messaging and post reminders on the community website. You could also ask them to mark their calendars as some members may not visit the community website frequently.
Aside from that, food and drinks work well since it serves as an incentive for them to show up. Some HOA’s set their meetings to the evening and notify members that dinner will be served. If many of your board members have a 9 to 5 job, consider other options because these people could be busy in the evening.
Issues To Address
In order to be prepared, take some time beforehand to think about what should be discussed in the meeting. Generally, the board discusses how the HOA thrived in the past year as well as situations to expect in the upcoming year. You could also use the meeting to celebrate achievements such as the completion of a project while coming up with suggestions for dealing with difficult issues.
Additionally, the annual meeting provides a perfect opportunity to talk about the potential for special assessments. Let members know how much money needs to be raised and how it will be used. Preparing for the annual meeting is often a time consuming process. Make sure everyone is ready by coming up with an agenda, placing reminders on the community website, and preparing the ballots if any elections will be held.
Posted on January 21, 2019 8:00 AM by HOA Sites
Each HOA member is important but not everyone adds value to the association. Homeowners offer value to an HOA by participating in the discussions on the homeowners association website, volunteering in various activities, paying HOA fees on time, and more. If you’re looking to be a better member in 2019, here are a few areas to focus on.
Adhere To The Rules & Think Ahead
These days, there’s no excuse for not knowing the rules as most HOA’s have them readily available to every member. If your HOA rules are not on the homeowners association website, consider asking one of the board members to email you a copy of them.
Don’t just read the rules; obey them and if there’s any rule you’re not okay with, bring it up in the next meeting. In case you receive a letter regarding a rules violation, don’t automatically toss it in the trash. Read it and if you’ve been fined, pay the fine or appeal the matter. Failure to pay fines without appealing often leads to bigger fines and causes more trouble.
Pay HOA Fees On Time
HOA fees keep the community going and also help ensure the reserves have adequate funding. If everyone fails to pay, how will the costs be met for common amenity maintenance and other important expenses? When you live in a clean, well-maintained community, make sure you’re doing your part and contribute on time.
Be An Active Member
Due to the demanding nature of many careers, several homeowners barely have enough time to interact with neighbors. However, more companies are adopting policies that allow workers to have extra social time, and it would be great if you spent some of it getting to know your neighbors.
One way of doing that is to connect with them through the homeowners association website as that can be done from a smartphone. Use the strategies discussed above to be more valuable to your HOA this year and really make a notable difference.
Posted on January 7, 2019 8:00 AM by HOA Sites
Some of the factors that contribute to the success and growth of an HOA include a comprehensive financial plan, a competent board, an active neighborhood website, and a good property manager. The last factor will be the main focus for this article as a good property manager is vital for several homeowners associations. When looking for an individual to take charge of a property, here are some of the factors that you should consider.
Property managers deal directly with board members and residents, and thus they need to have great interpersonal skills. For instance, if the board needs to adopt a policy that residents find unusual, the manager should know how to use the neighborhood website to talk with residents about the positive side of it. The most important skill is the ability to handle people of all personalities in an effective way.
The CAI and other professional organizations in the community management industry require managers to keep advancing their education and also set the code of ethics that community managers must follow. Additionally, they keep them up-to-date with the latest trends in HOA management and inform them about the tools needed to offer excellent services. Most managers with certifications from these organizations must be competent and likely possess the traits to be considered for hiring.
A manager is one who not only knows what their job entails but also delivers management services in an efficient and respectful manner. Property management requires skills in accounting, marketing, customer service, and verbal communication. Furthermore, the manager needs to be highly organized and capable of coming up with solutions for problems in a timely manner.
Good property management ensures your community thrives, keeping both the board and homeowners happy. These are just some of the traits you should look for in a manager to know whether or not they have what it takes for your HOA to be successful!
Posted on December 28, 2018 8:00 AM by HOA Sites
Whether an outage happens as a result of a storm, winter ice, or overloading, a power failure can be a devastating occurrence in your HOA. Food storage is one of the most important areas that should be a focus during an outage and it’s only wise that homeowners know the best way to preserve their food. Here are some helpful tips to ensure that happens.
Since an outage rarely happens, many homeowners are not prepared for this type of situation. Use the quarterly newsletter or the HOA website to inform members on how to handle any refrigerated and frozen food when there’s a power failure. With fifty pounds of block ice, that can keep a regular-sized freezer cool for around 48 hours.
Maintain An Ideal Temperature
Make sure you suggest places where homeowners can quickly get dry ice when they need it and include tips on how to handle it safely. Also, caution against touching it with bare hands or inhaling the vapors. One essential item to always have around is a thermometer to test the temperature of food and it should remain lower than 40?? F.
Opening and closing the refrigerator when there’s no power is a bad idea so avoid it unless it’s absolutely necessary. Perishable foods such as meats, fruits, and vegetables are the first foods that should be consumed during this time. Any perishable food that has been warmer than 40?? F for several hours should be discarded.
When Power Is Restored
After the outage, take a few extra minutes to deodorize the freezer and refrigerator. A simple washing solution can be made by combining a few tablespoons of baking soda with water. Additionally, an open baking soda box in the refrigerator will help absorb foul odors efficiently. When posting on the HOA website, be sure to point out the months that most electrical outages happen, though, the best solution is to always be prepared.
Posted on December 17, 2018 8:00 AM by HOA Sites
The holiday season is a time to get together, have fun as a community, and perhaps talk about the future plans of the HOA. During this time, the last problem you want to face is dealing with a board member who is irritable. The close-minded and stingy nature of such a person can make a negative impact on the holiday spirit for the entire HOA and it’s wise to know how to deal with them in a professional manner.
Characteristics To Watch Out For
A board member who lacks the holiday spirit might vote against many items, even when it concerns a proposal to boost the mood of homeowners during the holiday season. Such a person may be greedy and negative-minded, constantly complaining over matters that others are in agreement about. In some cases, they may even want the design of the homeowner association website to be changed.
A scrooge-like member usually prefers to take the easy route and opposes the idea of spending money on holiday decorations even though they’re included in the budget. Often, their argument revolves around saving money and minimizing expenditures with regard to enjoyment.
Dealing With Such A Member
If a selfish board member is ruining your holiday plans, the first step you should take is to talk with them and remind them about their responsibility as a board member. Help them understand that even though it’s their duty to protect the HOA’s resources, they also need to enhance a homeowner’s quality of life.
Additionally, encourage them to use logic rather than force and intimidation to get their points across. Maybe they’re not aware of how to be a good leader and all they need is a little guidance. If that isn’t effective, it might be necessary to call for the member’s removal. In order to reduce the odds of this happening in the future, consider having a page of the homeowner association website where board members learn about good leadership.
Posted on December 5, 2018 8:00 AM by HOA Sites
Determining the budget is an integral part of the fiduciary duty that comes with being a board member. In addition to this, there should be a means of ensuring the fees and assessments are not only appropriate but also fair. 2019 is quickly approaching, and the budget should be prepared as soon as possible so the board has adequate time to deliver a comprehensive financial plan. This post examines a few important budget-related items to review.
Proper budgeting requires that an assessment of the HOA’s current financial situation be done first. Therefore, it’s necessary to examine the HOA’s end-of-year financial statements, including the balance sheet and the income statement. If you notice that expenses are more than the income, then next year’s budget should address that issue by cutting costs.
Contracts With External Parties
Start by assessing all the existing contracts and evaluate if your association will continue to benefit from them next year. Keep in mind the wants versus the needs and the financial capability of the HOA. Similarly, consider the value of the services you receive from your current suppliers. For instance, is the community website manager doing a great job or do you need to replace them?
The task of calculating the homeowners’ fees is quite easy. All you need to do is add up the contributions from the annual reserve and operating expenses then divide the total by the number of homeowners. However, the formula may vary depending on your HOA’s unique needs. Get a financial expert to help you compute some reasonable figures and use the community website to keep homeowners informed.
Preparing the budget is one of the most important duties the HOA board has to fulfill as it affects many key areas. For the HOA to be financially sound in 2019, it’s essential that preparations begin early and board members work together to come up with an accurate budget!
Posted on November 26, 2018 8:00 AM by HOA Sites
A reserve fund is meant to plan for an HOA’s future replacements and repairs. But, what if a component that isn’t included in the reserve study needs funding? For instance, common drainage lines may be failing and you might be forced to decide whether or not to fund the repairs from the reserves. This post offers helpful suggestions on the steps a homeowners association should take.
Add The Item To The Reserve Study
Typically, the first step is to bring the issue to a reserve specialist so they can offer their guidance and help you add the item to the reserve list. One of the cases for items getting added includes unforeseen disasters. Maybe at the time of the last reserve study, the item was mistakenly excluded because it was well concealed, like rusting underground drainage lines.
It’s the board’s fiduciary duty to get the opinion of an HOA manager or a reserve study specialist to ascertain the necessity of adding an expense to the reserves. Also, the HOA’s governing document should be reviewed at this time to see if there are guidelines for handling unlisted components.
If it’s in the HOA’s best interest to use some of the money in the reserves for an item that was not initially included in the study, then the item should be added as long as the governing documents allow it.
When Not To Use The Reserves
There are situations when it’s not acceptable to use the reserve funds for handling unexpected projects. If the rules specifically state the reserves are never to be used for minor projects, then the HOA could secure a loan or issue a special assessment.
Before using the reserves for unlisted components, it’s advisable to inform members about it through the homeowners association website for a wider reach. Anytime a special assessment is issued, consider posting a detailed explanation on the homeowners association website so residents know why the funds are needed.
Posted on November 14, 2018 8:00 AM by HOA Sites
Are you disappointed with the services of your HOA’s management company? In most cases, chances are that the company was hired by past board members. Perhaps because they liked the services of a particular manager who worked for the company but that person no longer works there. As a responsible board member, if you feel that your HOA is not benefiting from the management firm, it may be a good time to make a change.
What Leads To Poor Management?
Often, poor management is the result of inadequate communication between the management firm and the homeowners association. Maybe the manager assigned to your HOA is in charge of multiple tasks from several associations. Additionally, it might be that the firm has grown so much that they view your HOA’s needs as trivial compared to those of larger associations that pay more.
What To Do About It
If you have tried reaching out to the management company but their services are not improving, the best step is to hire another firm. Begin by holding a meeting with board members and make a list of your HOA’s likes and dislikes.
After that, create a list of a few management firms and interview them to see if they would be a good fit for your association. This is a great time to ask them about the systems they use, the managers’ experience, and if they can help you manage the neighborhood website and financial reports. Some members think choosing the right management company only involves talking to the person in charge of the firm.
Instead, you need to interview the manager that’s assigned to your HOA to ensure there’s a personality fit between them and the board. A good manager is able to communicate properly and in a timely manner, and they’re well versed in running any HOA. As soon as you have a new management company, it would be best to notify members through the neighborhood website about the change.
- What Elements Should Be Included In The Homeowners Association Budget?
- Are Neighbors The Best Form Of Security In Your HOA?
- How To Tell If The HOA Has Been Properly Maintained
- The Significance Of Setting Up A Maintenance Plan For The Homeowners Association
- Can The Board Use Reserve Funds For Items Not Listed In The Reserve Study?
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