HOAleader.com - Tip of the Week - November 28, 2025
Published: Fri, 11/28/25
Updated: Mon, 12/01/25
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Oof! HOA Board Learns of a Huge Loan Against Reserves 40 Years Ago (Yes, 40!)
In this week's tip, our experts in various states put their legal skills to the test in evaluating whether a board has to pay back a decades-old loan from an HOA's reserves that nobody knew about until just recently.
The issue isn't hypothetical. It's actually happening in an HOA in which an HOAleader.com reader lives. Our reader says their California HOA board just noticed that $260,000 appears to have been borrowed from the HOA's reserve account and that nobody alive was ever aware of it. Our reader wants to know if a five-year payback plan would be OK.
In fact, it's not an absolute yes that this reader's board needs to pay this loan back at all, let alone in five years, at least based on the little information our reader has provided.
“That's tough,” says Cyrus Koochek, a partner with Swedelson Gottlieb in Santa Monica, Calif., who advises about 100 condos and HOAs throughout the state at any given time. “Do they have to pay it back? Not necessarily.
“We have a statute in California that says when you borrow from the reserves to meet operating expenses, you're supposed to pay the money back within a year,” he explains. “But the statute provides some flexibility to take more than a year.
“Here, we're talking about something 40 years ago,” notes Koochek. “This event may have even predated California's Davis-Stirling Act and the statute on borrowing from reserves. So whatever is in those laws might not have even been the law at the time this money was borrowed. That's a wrinkle in this scenario.”
There are a ton more wrinkles here. Read more, plus how this might play out in other states, in our new article: https://www.hoaleader.com/members/5213.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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When Your Condo/HOA Board Is Being Monday-Morning Quarterbacked By An Owner (Who May or May not Be Qualified to Be Your Ref) [HOAleader.com Video]
In this week’s tip, we discuss owners who, perhaps trying to help, set forth all the many reasons you, as a condo or HOA board, are missing the mark...
Click here to read the full article:
https://www.hoaleader.com/members/When-Your-Condo-HOA-Board-Being-Monday-Morning-Quarterbacked-By-Owner-HOAleader-Video.cfm
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Has This Board Battling an Owner Over Milkweed Wandered Too Far into the Weeds?
An owner in Reston, Va., has been ordered to remove milkweed from her yard based on the language of its governing documents. Milkweed is reportedly vital for monarch butterflies and other pollinators, yet it’s also toxic to the lanternfly. As you could probably predict, the owner is fighting back, claiming her HOA’s deed is outdated...
Click here to read the full article:
https://www.hoaleader.com/members/Has-This-Board-Battling-Owner-Over-Milkweed-Wandered-Too-Far-into-Weeds.cfm
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When An Owner "Audits" Your Condo/HOA Board and Finds Nearly 60 Violations [HOAleader.com Video]
If an owner finds dozens and dozens of instances in which they claim you, as a condo or HOA board, have failed in your duties, is that helpful to know? The question arises from a discussion board post by an HOAleader.com reader, who says they have a background in compliance and conducted an audit of their board's compliance with state law—and sent a letter to their board listing nearly 60 violations...
Click here to read the full article:
https://www.hoaleader.com/members/When-Owner-Audits-Your-Condo-HOA-Board-Finds-Nearly-60-Violations-HOAleader-Video.cfm
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HUD Quietly Withdraws Guidance Affecting Condos and HOAs
On September 17, 2025, the Trump Administration issued a Notice of Withdrawal of Guidance regarding a number of fair housing rules and regulations, including some related to emotional support animals...
Click here to read the full article:
https://www.hoaleader.com/members/HUD-Quietly-Withdraws-Guidance-Affecting-Condos-HOAs.cfm
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HOA Takes Issue With Insurer’s Denial of Coverage Over HOA’s Alleged Neglect
Ugh. Industry insiders wonder whether a recent lawsuit is a signal that more condos and HOAs like yours might need to pick a fight with your insurance company to actually get the coverage you’ve paid dearly for...
Click here to read the full article:
https://www.hoaleader.com/members/HOA-Takes-Issue-With-Insurers-Denial-Coverage-Over-HOAs-Alleged-Neglect.cfm
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