HOAleader.com - Tip of the Week - June 2, 2023
Published: Fri, 06/02/23
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HOAleader.com - Tip of the Week - June 2, 2023
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In this week's tip, we answer a reader's question about credits found in the wake of a recent transition from developer control.
In a nutshell, this treasurer says numerous residents have credits on the accounts, some from overpayment of dues, some because of monthly autodrafts when dues are due annually, and some because of a credit at closing. Credits range from $25 to more than $2,000.
What to do with wonky, unexplained accounting? Start digging, Sherlock!
This isn't as unheard of as you might initially think. "We take over communities with this type of situation," reports Diane Amaral, an association manager at Alpharetta, Ga.-based Homeowner Management Services Inc., who personally manages a portfolio of eight HOAs. "We took over one in February where I have a list of credits from homeowners, and a lot of them have to do with prepaying their assessments.
"That's not unusual," she adds. "Especially if assessments are monthly, some owners want to pay six months in advance. We have a lot who want to prepay--and we like that."
But what if Amaral took over a community and couldn't tell where credits came from? She says that's unlikely. "In this case, that information should come over in the transition records," she says. "If it doesn't and I see something concerning, I get a hold of the transition department of our company.
"I'll tell them I'm red flagging this because it's a large credit, or it doesn't make sense to me, or it doesn't fit the assessment amount," explains Amaral. "One way or another, we usually find out what that amount came from."
Lots of challenges can arise, such as whether to credit the funds to the current owner or to a past owner after a recent sale. Find out more--including whether you should just issue a credit or, gasp, cut a check!—in our new article: https://www.hoaleader.com/members/4712.cfm
Best regards,
Matt Humphrey
President
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