HOAleader.com - Tip of the Week - January 29, 2010
Published: Mon, 01/18/10
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HOA Finances:
Think Twice Before Throwing a Party with Unused Budget Funds
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This week's tip deals with associations that take leftover money
in a miscellaneous or contingency budget account and fritter them
away with things like parties. Be careful before taking that
step, advises Jeff Vinzani, an attorney at Nexsen Pruet LLC in
Charleston, S.C., who represents associations.
"I've seen boards say, 'We've got $2,000. Let's have a party.'
I don't think that's fair because not everybody goes to
association parties," says Vinzani. "I also think it's breaching
the board's duty to the homeowners because it's not a social
line item but a miscellaneous line item. This budget category
needs to have a list of possible uses so the board and the
management company have some guidance on how to proceed in
spending the funds."
In fact, Lisa A. Magill, a shareholder and association attorney
at Becker & Poliakoff PA in Fort Lauderdale, Fla., says your
association may not even need a miscellaneous line item in your
budget. "Having a miscellaneous line item isn't necessarily a
bad practice, but it's unnecessary," she says. "Your board,
along with management, should be able to estimate the expenses
associated with each budget category, and evaluating the
expenses from the previous year is always a good place to start."
But Robert White, managing director of KW Property Management &
Consulting in Miami, which oversees about 125 associations
totaling 30,000-35,000 units, disagrees. "We call it a
contingency line item," he explains. "In every association,
especially in older ones where maintenance can pop up, you're
working to get the budget as close to actual as possible. But
we usually build that line item in there for a couple of
reasons."
To learn more about whether to have a miscellaneous or
contingency fund in your budget and to determine whether you may
be abusing your authority with funds left over at the end of
your fiscal year, see our new article:
http://www.hoaleader.com/members/379.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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HOA Boards: What Are You Resolving to Do Better in 2010?
This week's tip deals with ways other HOA and condo board
members and association managers and attorneys suggest that you
can resolve to do better in 2010.
Click here to read full article:
< http://www.hoaleader.com/members/384.cfm >
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HOA Finances: 6 Steps to Protect Your Association Against
Mechanic's Liens
Before your HOA or condo board withholds payment in a dispute
with a contractor, you should be fully aware that you risk having
a mechanic's lien filed against your homeowners association. Here,
we explain mechanic's liens and offer tips for resolving
disputes with contractors in a way that avoids liens.
Click here to read full article:
< http://www.hoaleader.com/members/380.cfm >
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HOA Finances: Do You Abuse Your "Miscellaneous" Account?
Keep an eye on how you use the "miscellaneous" line item in your
HOA budget. If you're not careful, you could waste precious condo
or homeowner association funds and possibly violate your
fiduciary duty to act in the best interest of the homeowners
association.
Click here to read full article:
< http://www.hoaleader.com/members/379.cfm >
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Discussion Forum Follow-Up: What's a Reasonable Late Fee?
A reader on the HOAleader.com discussion board asks a simple
question that has vexed many boards: What's a reasonable late fee?
Here's a brief primer.
Click here to read full article:
< http://www.hoaleader.com/members/382.cfm >
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Is Your HOA Management Company Double Dipping?
This week's tip deals with saving money by digging into your
management company's relationships with the vendors it
recommends for association projects.
Click here to read full article:
< http://www.hoaleader.com/public/378.cfm >
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