HOAleader.com - Tip of the Week - December 15, 2017
Published: Fri, 12/15/17
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Are You Following Your State Laws on HOA Budgeting?
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In this week’s tip, we turn to your budget.
Bored already? No need. This is good information, so stick with us.
Here’s an interesting fact about North Carolina law: It requires that HOAs
hold an annual budget ratification meeting before each fiscal year.
Do your state laws or governing documents require that you do something
similar? If so, what does it involve exactly? And what if owners ratify your
budget—does that mean you can’t vary from it? Or do you need to get certain
permissions to vary from it?
Mike Hunter, an attorney and partner at Horack Talley in Charlotte, N.C.,
who represents associations, is our resident expert in the state.
He says the state requires that nonprofits, which most HOAs are, hold an
annual budget ratification meeting before their fiscal year begins.
Hunter says the meeting is often paired with the HOA’s annual meeting and
election.
The budget ratification meeting doesn’t need to meet the quorum
requirement typically needed for meetings, states Hunter. It needs only
proper notice and the lack of an objection to the proposed budget by the
majority of the association’s members to be considered ratified. That’s
complicated wording. In short, it means that if the owners object to the
budget, a majority of them must appear and do so in person at that meeting for
their objection to be effective.
The process is somewhat similar in Illinois, particular when it comes to the
majority of owners objecting to the budget. “In Illinois condos, you’re
suppose to distribute the proposed budget so owners have it at least 25 days
before it’s adopted by the board,” notes Michael Kim who, through his
Chicago law firm, Michael C. Kim & Associates, represents about 500
associations. “When the board meets to adopt the budget, some are fairly
open about entertaining comments and questions from homeowners before
they proceed to adopt it. One client has taken it to an extreme where they go
line by line, which is a painful process. But the board ultimately decides to
adopt the budget or not.”
Here’s where the similarity to North Carolina comes in. “In Illinois for
condos, if the budget exceeds last year’s budget by more than 15 percent,
owners have a referendum right,” notes Kim. “If 20 percent of the owners file
a petition, the board must call a meeting to have a referendum vote on the
budget. Opponents need to get at least a majority of all the owners to vote
against the budget. If they don’t get that, the budget is ratified.”
Find out why that’s the fair way to proceed, in Kim’s opinion, and get
information on how much you can change your budget after it’s ratified, in
our new article: https://www.hoaleader.com/members/3650.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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Are You Following Your State Laws on HOA Budgeting?
In this week's tip, we turn to your budget. Bored already? No need. This is
good information, so stick with us. Here's an interesting fact about North
Carolina law: It requires that HOAs hold an annual budget ratification
meeting before each fiscal year.
Click here to read full article:
https://www.hoaleader.com/public/Are-You-Following-Your-State-Laws-on-HOA-Budgeting.cfm
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Are You Required to Submit a Budget for HOA Owners to Ratify? What Does That
Mean?
Interesting fact about North Carolina law: It requires that HOAs hold an
annual budget ratification meeting before each fiscal year.
Click here to read full article:
https://www.hoaleader.com/members/Are-You-Required-Submit-Budget-for-HOA-Owners-Ratify-What-Does-That-Mean.cfm
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Remember that New Florida Law to Curb Fraud? Prosecutors Announce Charges
We recently reported that Florida has toughened its laws against board
fraud and unethical activity in condos and HOAs. In August, prosecutors
announced charges against a condo manager for fraudulent activity.
Click here to read full article:
https://www.hoaleader.com/members/Remember-that-New-Florida-Law-Curb-Fraud-Prosecutors-Announce-Charges.cfm
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Easier Enforcement of Your HOA's Rules: Steps to Create Enforceable Rules,
Effective Fines, and a Fair Violation Process
Enforcing rules doesn't have to be a pitched, tense, and unpleasant battle
between your homeowner association board and your homeowners. With some
smart planning, you can make enforcing your HOA's rules fairer, quicker,
easier, and less stressful. Watch this in-depth webinar led by two
community association experts: a lawyer with more than a decade of hands-on
experience in advising associations on how to create and enforce rules,
along with a veteran association manager and recognized educator with
insights on the day-to-day operations of rules enforcement. You'll get
practical ideas, systems, and processes you can begin to take advantage of
at your association the minute the webinar ends.
Click here to read full article:
https://www.hoaleader.com/products/easier-enforcement-hoa-rules-b.cfm
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How to Read Your Association's Financial Reports (and Fulfill Your
Fiduciary Duty)
Nobody expects you, as a board member, to be a CPA or a super-high-level
financial whiz. But to fulfill your fiduciary duties, you do need to be able
to understand your association's financial statements, ask good
questions about its financial status, and spot potential problems.
Click here to read full article:
https://www.hoaleader.com/products/how-to-read-associations-financial-reports-a.cfm
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