HOAleader.com - Tip of the Week - December 5, 2008
Published: Fri, 12/05/08
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HOA Loans: Should Your Homeowners Association Consider One?
If your HOA community is tightening its belt a notch or two--and
who isn't right now?--and you face a major expense, you might
consider whether an HOA loan is appropriate.
We recently spoke to Deborah M. Casey, a partner at Vandeventer
Black LLP in Norfolk, Va. about HOA loans. In some possibly
counterintuitive advice, she recommends that boards who are
considering loans start by checking their reserves.
"Lenders won't lend unless associations have adequate reserves
and an assessment stream," Deborah told us.
This may seem like a Catch-22. You need reserves to get a loan,
but if you have reserves, why would you need a loan?
Deborah explains, "You might have a $100,000 reserve but a
half-million-dollar repair you never intended." In those cases,
it may be better to take out a loan rather than to drain your
account AND levy a big special assessment.
For more practical guidance on HOA loans, check out our recently
posted article, "HOA Financial Matters: Lean Times May Call for
Loans". Read the article now:
http://www.hoaleader.com/members/197.cfm
Best regards,
Matt Humphrey
President
P.S. In the spirit of the holidays, we've extended the time that
our exclusive special report is available to members! It will be
available until Dec. 31.
Download "HOA Finances: Best Practices for Getting
Your Homeowners Association through Difficult Economic Times"
today: http://www.hoaleader.com/members/179.cfm
Not a member yet? Sign up for a 7-day trial membership. It's
free: https://www.hoaleader.com/public/93.cfm
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Recent articles posted at HOAleader.com:
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State Law Survey December 2008: What's New and Important for HOAs?
FHA Toughens Lending Requirements to Prevent "Buy and Bail" ...
New Law Aids Associations After Foreclosure ... Lawmaker Proposes
Curbing HOA Foreclosure Powers ... Legislation That Would Saddle
Homeowners with $10 Annual Fee Dies
Click here to read full article:
< http://www.hoaleader.com/members/199.cfm >
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HOA Transition Tips: Moving from Developer to Owner Control
The transition from a developer-controlled to a homeowner-
controlled community is fraught with risks for homeowners. If
your HOA board is about to take over from your developer or has
recently done so, here are tips for making sure the transition
goes as smoothly as possible.
Click here to read full article:
< http://www.hoaleader.com/members/200.cfm >
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News Around the Nation: November 2008
Political Sign Theft Prompts Criminal Charges ... Condo Owners
Stick It to Insurer ... Owners Sue to Remove Developer ... When
Did Four of Eight Become a Majority? ... Condos Lose Street Fight
with City
Click here to read full article:
< http://www.hoaleader.com/members/198.cfm >
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HOA Financial Matters: Lean Times May Call for Loans
If your homeowner association has maintenance or repairs it must
do today, along with a limited budget, it may be time to consider
a loan. Here are tips for making sure you get members' approval
and good loan terms before you sign on the dotted line.
Click here to read full article:
< http://www.hoaleader.com/members/197.cfm >
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Alternative Dispute Resolution: Should Your Homeowners
Association Require It?
Would it be smart for your HOA to require nonbonding mediation or
arbitration of disputes? Here's what to consider.
Click here to read full article:
< http://www.hoaleader.com/members/196.cfm >
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