HOAleader.com - Tip of the Week - January 3, 2016
Published: Sun, 01/03/16
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Before Bidding Adieu to the Recession, Take These HOA Lessons
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In this week’s tip, we aim to start the new year by looking back.
The recession that began around 2008 hammered HOAs for years. Thankfully, the worst seems to be over, and each day looks brighter and brighter for today’s HOAs.
That doesn’t mean, however, we should put the recession behind us just yet. Before we do that, we should mull what that awful economic downturn has—or should have—taught us. Here our HOA experts do that, offering four lessons smart boards will remember going forward.
1. Annual financial reviews are critical. “The recession reminded everyone how important it is to do a full annual review of all income and expenses, as well as what potential future capital projects should be performed, prior to preparing an annual budget,” says Mark Durakovic, vice president of Kass Management Services, which manages 4,000 condominium units in Chicago. “That will also allow for long-term planning and budgeting to take place.
“As a part of that analysis, we suggest a review of all service contracts (scavenger, window-washing, boiler/HVAC, and so on), insurance policies, and energy contracts to determine what savings may be available for the coming years,” adds Durakovic. “We also recommend our managers consult with boards to determine what capital project plans should enter the planning stages.
“By doing all that, boards can make determinations on annual budgets along with what, if any, increases are necessary to the budgets and to plan for future expenditures,” he concludes.
2. Collections should be formalized and strengthened. “One of the required governance policies HOAs are required to have here in Colorado deals directly with collections,” explains Hal Kyles, a partner at Denver’s Orten Cavanagh & Holmes LLC, which represents more than 600 associations in Colorado.
“HOAs are required to have a written collection policy that defines the process by which an association will enforce assessment collections,” explains Kyles. “It should cover things like the type of notices you’ll provide and when you can file with attorney or collection agency. I’m constantly telling board members or community managers that your collections policy isn’t complicated—it’s rarely more than three or four pages. But it should serve as a guide post to direct how the community should handle these types of accounts. I won’t even open a collection account unless I’m certain the association has fully complied with the requirements of its collection policy.
“The biggest issue I have, however, is that HOAs shouldn’t let accounts stagnate in delinquency,” adds Kyles.
What does Kyles mean by stagnate? And what else can you learn from the past? Find out in our new article: http://www.hoaleader.com/members/1304.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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Before Bidding Adieu to the Recession, Take These HOA Lessons
In this week's tip, we aim to start the new year by looking back.
The recession that began around 2008 hammered HOAs for years. Thankfully, the worst seems to be over, and each day looks brighter and brighter for today's HOAs.
Click here to read full article: http://www.hoaleader.com/public/Before-Bidding-Adieu-Recession-Take-These-HOA-Lessons.cfm
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4 Lessons from the Fading Recession to Kick Off the New Year
The recession that began around 2008 hammered HOAs for years. Thankfully, the worst seems to be over, and each day looks brighter and brighter for today's HOAs.
That doesn't mean, however, we should put the recession behind us just yet. Before we do that, we should mull what that awful economic downturn has--or should have--taught us. Here our HOA experts do that, offering four lessons smart boards will remember going forward.
Click here to read full article: http://www.hoaleader.com/members/4-Lessons-from-Fading-Recession-Kick-Off-New-Year.cfm
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Withholding HOA Dues: This Owner Sure Woke Up Her Board
A Michigan homeowner has been ordered to pay dues she was withholding from her association to protest the HOA board's failure to act on a number of community matters.
In this week's tip, we admit she was wrong but point out that she actually had a valid point.
Click here to read full article: http://www.hoaleader.com/public/Withholding-HOA-Dues-This-Owner-Sure-Woke-Up-Her-Board.cfm
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When an HOA Owner's Wrong and Right at the Same Time
A Michigan homeowner has been ordered to pay dues she was withholding from her association to protest the HOA board's failure to act on a number of community matters.
The board appears to have gotten the message. And yes, the owner was wrong, but what took this board so long to realize its owners had valid complaints? Here we explain and offer advice.
Click here to read full article: http://www.hoaleader.com/members/When-HOA-Owners-Wrong-Right-at-Same-Time.cfm
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Can You Make Owners Insure Things the HOA is Responsible to Maintain?
An HOAleader.com reader asks: "Are there any limits to a board's authority to add rules? Specifically, can a board add a rule to the association rule book that requires homeowners to purchase insurance to cover items the CC&R makes the board or association responsible for repairing or replacing? It would seem the association would be responsible for insuring what the association is responsible for repairing. It would also seem that such an insurance requirement belongs in the CC&R and not in association rules that can be added or amended by a simple board majority."
Click here to read full article: http://www.hoaleader.com/members/Can-You-Make-Owners-Insure-Things-HOA-Responsible-Maintain.cfm
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