Category: Articles

With the cooler temps, what better time to get together for community activities? There is much to do during the spring and fall months, no matter where you live. Let us talk about some fun events HOA Boards could offer in your community this fall and, most importantly, how to execute them effectively!

Successful HOA events all come down to planning. The more you plan, the better your event will be executed. Below is a checklist or guide of items you can do before your event to ensure success. 

HOA Event Planning Tips

Choosing a date/time 

When choosing an event date and time, it’s essential to avoid scheduling multiple events on the same day or time. Also, be sure to check your local events, such as those in your city, state, and neighboring communities. It may not always be possible to avoid planning events on the same day as others, but try to avoid scheduling “like” events on the same day. For example, if your city has a Fun Run, don’t schedule a community Fun Run around the same time.

Know your Association

Know your Association. What exactly do we mean by that? If you plan an event in a multi-generational community, there are better options than weekdays or weeknights during the school year. Family communities offer events on Friday evenings or the weekends to maximize attendance. If your community is for Active Adults (55+), do most of your residents still work? If so, then weekday or weeknight events may also not be ideal. However, if your association comprises a majority of retired residents, you may have more flexibility when offering events. Knowing your community can ensure the most attendance at your events.

Know your budget

Defining and sticking to your budget is crucial for planning successful events by reducing the stress of going over budget and having to cut corners to make the event happen. Knowing your budget for each event will ensure a successful year of events!

Booking your vendors for HOA events

Be sure to do your due diligence when choosing your vendors, whether a band, a caterer, or a performer. Please do your homework, get referrals, check YouTube videos, or call a colleague who may have used them. Knowing what you are getting upfront will help you have a successful event.

Building your team 

Build your team! Putting on a successful HOA event is not a one-person job and requires a team. Every team needs a leader and support behind them. So, whether your team is supporting staff or volunteers, be sure to equip them with the necessary tools. Timelines and job assignments with detailed information will help your team support you in being effective. Plan accordingly with team meetings leading up to your event, and always have a post-event meeting. There is always room for improvement, so post-event discussions are an excellent tool for continuing to plan successful events. 

Promoting your event

Utilize your team to promote your events. It is crucial to ensure that event details are adequately promoted. Create flyers, announce them in community newsletters, send emails, add them to your website, and mention them at Board meetings. The more ways you can inform the members of your HOA, the more successful your event will be.

Event Ideas

Low-cost, high turnout—sharing food always brings people together.

Recurring events that establish tradition and community pride.

Build connections while promoting health and personal growth.

Appeal to hands-on hobbyists and families alike.

Inclusive events that bring out kids, parents, and grandparents.

Events that create pride and a sense of shared responsibility.

HOA events can be a lot of work, but they can certainly help build a stronger sense of community and increase overall resident satisfaction. Events are also a good time to activate homeowner participation by creating a Social Committee to help the Board plan and execute community events. Learn more about Building HOA Committees. Use this information provided to get inspired, organized, and ready to implement successful events for years to come.

When it comes to helping Boards and residents get the most out of their HOA, AAM is here to help. Communities under our care benefit from the direct support of a lifestyle team that serves as AAM’s global resource for community events and lifestyle programming. The team is also responsible for ensuring that all programs, services, and events are conducted and fulfilled in a manner consistent with the community’s goals and objectives and remain compliant with local, state, and federal regulations.

• 10 Tips for Successful HOA Board Members
• How to Increase HOA Homeowner Participation
• 10 Habits of Successful Community Associations

Whether you are a homeowner living in an HOA, a recently elected Board member, or an aspiring Community Manager, it is important to understand the differences between the multiple HOA governing documents: the HOA Bylaws, CC&Rs, and Rules & Regulations, by which an HOA operates. If you are a homeowner, for example, becoming familiar with your community’s rules, knowing what is and isn’t permitted concerning your home, and knowing where and how to find this information will prevent you from having to deal with the consequences of non-compliance, which in most cases, can include fines and other types of penalties.

What are the HOA Governing Documents

Typically, all associations have governing documents, including Bylaws, CC&Rs (Covenants, Conditions, and Restrictions), and Rules and Regulations. These HOA governing documents outline the rules, policies, and contractual terms that Board members and homeowners must follow within the homeowners association.

In most cases, these governing documents are initially drafted by the community’s developer and enforced and modified as necessary by the Board of Directors.

All new owners moving into a property within an HOA will be given access to the association’s official records for review. As soon as they close escrow, they agree to the legally binding rules and policies mentioned.

HOA Governing Documents Hierarchy

Legal Requirements:

All federal, state, and local laws must be followed across all levels of governance.

Covenants, Conditions, and Restrictions (CC&Rs):

This key document outlines the balance of authority and the HOA’s and its homeowners’ respective obligations.

Articles of Incorporation:

Establishes the HOA as a legal entity and defines its basic structure and purpose.

Bylaws:

Detail the internal rules and procedures by which the HOA operates, including voting, meetings, and board responsibilities.

Understanding the Differences Between HOA Documents

CC&Rs

Generally, the CC&Rs are the most extensive HOA governing document of an HOA. They contain homeowners’ rights and responsibilities and outline the architectural guidelines of the properties within the association. The primary purpose of CC&Rs is to regulate homeowners’ association architectural modifications based on community-approved standards. This regulation aligns with the HOA’s core mission: to protect, preserve, and enhance home values within the community.

For example, your homeowners association CC&Rs might require that all homes be painted tan for aesthetic reasons. If your neighbor decides to paint their house red, the HOA might fine them until they comply. Fines and other penalties for non-compliance will vary from association to association. Nonetheless, all should be clearly outlined in the CC&Rs.

It is important to note that if any conflict exists between a provision stated in the CC&Rs and an “HOA rule” generated by the HOA board members, the one outlined in the CC&Rs will always precede, and the latter will become invalid.

Common HOA CC&Rs can include: 

• HOA Dues and Assessment Obligations
• Association and Homeowner Maintenance Obligations
• Architectural and Design Standards
• Vehicle Restrictions
• Pet Restrictions
• Rule Enforcement Procedures and Penalties
• Short-Term Rental Restrictions

Rules & Regulations

Many associations adopt additional rules to help enforce or clarify the guidelines outlined in the CC&Rs, known as Rules & Regulations. They’re commonly referred to as a catch-all for items not specifically addressed in the other governing documents of the homeowners association. Typically, these rules will be more detailed than the CC&Rs and will likely be modified based on the community’s current needs.

For example, pool hours, gym hours, visitors’ parking hours, pet policies, and others. These things could change based on seasonality, membership demographics, the community’s current state, and current events, e.g., pandemics etc.

The Board of Directors can modify the Rules and Regulations by vote. However, HOA members should always be informed of any changes or additions to the Rules and Regulations or any other governing document.

Bylaws

The Bylaws of an HOA contain all the information and rules specifically related to the association’s operations and management. In most cases, they outline the Board of Directors’ governing structure, the procedures for matters such as Board elections and membership meetings, and the board’s rights and responsibilities.

More detailed examples of what you can find in your HOA Bylaws are:

• Membership Requirements
• Board Requirements
• Meeting Notices
• Board Meeting Frequency
• Quorum Requirements
• Voting Requirements and Frequency
• Term Limits for Board Members

A basic understanding of the differences between an association’s governing documents is crucial for harmonious living in an HOA. Familiarize yourself with your HOA governing documents, including HOA Bylaws, CC&Rs, and Rules & Regulations. It’s always wise to follow your HOA governing documents. When community members collaborate to improve their neighborhood, everyone shares in the positive results.

• HOA Board Member Roles
• HOA Resolution vs. Amendment
• Legislative Updates

Tips for reviewing HOA financial statements.

Reviewing your HOA’s financial statements isn’t just a best practice—it’s essential for protecting your community’s long-term stability. Whether you’re a seasoned board member or new to HOA leadership, knowing what to look for in your financial reports can help you spot trends, catch inconsistencies, and confidently make informed decisions.

1. Comparison Variance Report

The month-to-date and year-to-date budget comparison variance report is a great place to start your financial report review. This report is designed to provide board members with explanations of variances beyond the information supplied by dollar figures in a standard income and expense report. Your Community Manager can explain valuable operating and reserve activity details that cannot be captured in standard accounting reports. Also, it will assist you with questions you may have about the financial performance of your community. It may also answer many questions before board meetings, so meeting time can be allocated as efficiently as possible.

2. Balance Sheet

A review of the balance sheet will provide the Board with a snapshot of the Association’s assets, liabilities, and equity as of the end of each month. Operating and reserve cash balances are listed separately so the Board can make informed cash flow decisions. AAM’s accounting staff members reconcile each operating and reserve bank account every month. The full HOA financial package provides Bank reconciliations and statements to ensure financial transparency. As part of the reconciliation process, our accountants ensure that total account balances do not exceed FDIC limits at each financial institution. They also assist in setting up new money markets and certificate of deposit accounts.

3. General Ledger

The General Ledger is the source of all accounting data used to build the monthly HOA financial reports. Reviewing this activity provides detailed debit and credit information for each transaction processed during the monthly reporting period. Digesting this information may be a challenge, but once you are familiar with the report format, you can find many of the answers you might be searching for. It provides transaction dates, code descriptions, memos, debits, credits, and dollar figures.

4. Transparency

At least one designated Board member (generally the Board Treasurer) receives an additional monthly PDF file by email containing images of all paid invoices. This information is available to provide financial peace of mind and full transparency.

These are just a few quick tips for reviewing the monthly financial reports. Please feel free to contact your Community Manager as a starting point for any questions related to the financials. Additionally, we have an experienced and dedicated accounting support team ready to assist your Community Manager and Board of Directors at all times.

You can download this guide here

• Guide to HOA Budgets
• Mastering HOA Finances: 8 Signs You Need an Expert Management Company
• How to Successfully Change Your HOA Management Company
• 10 Tips for Successful HOA Board Members

HOA Board of Directors Duties – Who are they, and what do they do? Generally, an HOA Board of Directors comprises community volunteers elected by fellow residents to serve on the Board and make decisions on the residents’ behalf regarding the HOA.

Below is a brief overview of the HOA Board of Directors’ duties and responsibilities.

What is the structure of your HOA Board of Directors? 

In general, the Board of Directors consists of five (5) officers:

President:

The HOA President’s role is performed by someone knowledgeable of the community’s governing documents, oversees the community association’s operations by ensuring orders and resolutions are carried out, signs contracts, and co-signs checks. He or she leads all meetings, acting as the foreman.

Responsibilities:

• Managing the overall operations and initiatives of the association
• Making key decisions that impact the community
• Leading and facilitating board meetings

Vice President:

The Vice President performs other duties as required and will replace the President when necessary. Equally, the Vice President should have in-depth knowledge of the community bylaws and regulations.

Responsibilities:

• Assumes the president’s responsibilities when the president is unavailable

Secretary:

The Secretary keeps meeting minutes, records votes, and maintains compliance with essential association documents. The secretary is also responsible for informing board members and residents about upcoming meetings and documenting the meeting minutes.

Responsibilities:

• Manages the association’s official records and documentation
• Sends meeting notices and takes minutes during board meetings

Treasurer:

The Treasurer keeps track of the association’s finances and reports on monthly financials at board meetings.

Responsibilities:

• Supervising the financial operations of the association
• Creating and planning the annual budget
• Maintaining accurate and up-to-date financial documentation
• Handling tax-related obligations for the association

Member at Large:

The Member at Large acts as the fifth voting member of the Board and conducts other assigned duties. Learn more about what a member at large does.

What are the primary duties of your HOA Board?

The HOA Board members must ensure that the community is maintained by enforcing the community’s CC&Rs and Bylaws. Most importantly, board members should be fair and honest and keep the homeowners’ and the association’s best interests in mind when making decisions.

Managing the association’s financials is a collective effort by the entire Board, though the Treasurer often takes the lead. Responsibilities may include creating the annual budget, allocating funds for community needs, overseeing assessment collections, approving expenditures, and maintaining accurate financial records.

Together, the Board ensures the HOA’s financial health supports the long-term success of the community.

What is the relationship between the Board of Directors and your professional community management partner?

As community volunteers, most of the HOA Board elects to hire a professional community management company to leverage their expertise on community governance, ongoing maintenance, and resident communication. In partnership with the Board, the professional community management company helps provide structure to a community, protect property values, and ensure positive living environments.  

Do HOA Board Members Get Paid for Their Work?

Serving on your homeowners association’s Board of Directors is a voluntary commitment. Board members generously contribute their time and talents to support the community, and while their role is vital, it is not a paid position.

Sometimes, Board members may be reimbursed for out-of-pocket expenses related to their official duties. To request reimbursement, receipts are typically submitted to the Association’s treasurer for review and approval.

By contrast, the community manager is a paid professional. Though not a member of the Board, the Board hires the manager to help oversee the association’s day-to-day operations and ensure the community runs smoothly. More likely, the Board hires an HOA Management company like AAM that employs trained management professionals to manage the association.

Have A Question?

If you live in an association and have questions about Board Member Roles and Responsibilities, fill out our CONTACT US form, and we will happily contact you to answer them. 

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• HOA Board Member Roles
• What is a Member at Large
• Common HOA Community Management Strategies
• HOA Annual Board Meetings

A well-managed HOA is essential for maintaining property values and sustaining a thriving community. HOA management companies are pivotal in assisting HOA board members in handling day-to-day operations, confirming compliance, and enhancing resident satisfaction. Their expertise spans financial management, policy enforcement, vendor coordination, and community engagement.

This article delves into the primary responsibilities of HOA management companies and their significance in promoting a harmonious and efficient residential community.

Financial Management: Ensuring Stability and Transparency

Effective financial oversight is a cornerstone of a management company’s duties. Proper budgeting and detailed expense management are vital for the community’s financial health.

• Budget Planning and Forecasting: Developing detailed annual budgets that reflect the community’s immediate needs and long-term objectives. This process involves analyzing past expenditures and anticipating future costs to ensure financial preparedness.

• Assessment Collection and Processing: Managing the timely collection of dues, assessments, and fines is crucial for maintaining financial stability. This includes issuing invoices, tracking payments, and addressing delinquencies promptly.

• Expense Management and Cost Optimization: Monitoring expenditures, negotiating favorable contracts with vendors, and identifying cost-saving opportunities without compromising service quality.

• Financial Reporting and Transparency: Providing the HOA board with regular financial statements and detailed reports and facilitating audits to ensure accountability and informed decision-making.

• Reserve Fund Management: Overseeing reserve funds to prepare for significant repairs and capital improvements, ensuring the community is financially equipped for unforeseen expenses.
  

Enforcing Community Rules: Ensuring Compliance and Order

HOAs operate under governing documents, including Covenants, Conditions, and Restrictions (CC&Rs), bylaws, and community guidelines. A community association manager consistently enforces community policies to maintain community standards.

• Policy Implementation: The community manager assists the HOA board in establishing and updating policies that align with the community’s evolving needs and legal requirements.

• Routine Property Inspections: Conducting regular inspections to identify and address violations of community standards, ensuring properties adhere to established guidelines.

• Issuing Violation Notices: Notifying homeowners of infractions and working collaboratively towards resolution, fostering a culture of compliance and mutual respect.

• Conflict Resolution: Mediating disputes between homeowners, ensuring a fair and transparent process for handling rule violations, and maintaining community harmony.

Vendor and Maintenance Coordination: Keeping the Community Well-Maintained

Maintaining a clean, safe, and aesthetically pleasing environment is fundamental to an HOA’s success. A HOA management company’s responsibilities include coordinating vendor services and overseeing maintenance projects to uphold these standards.

• Vendor Selection and Contract Management: Researching, vetting, and hiring qualified vendors for services such as landscaping, security, and maintenance. This includes negotiating contracts and ensuring vendors meet community expectations.

• Project Oversight: Supervising maintenance and improvement projects to ensure timely completion, adherence to quality standards, and budget compliance.

• Emergency Repairs and Incident Response: Managing urgent repairs and coordinating responses to unexpected issues like storm damage, ensuring swift action to minimize disruption.

• Facility and Common Area Maintenance: Overseeing the upkeep of amenities such as pools, clubhouses, and common areas, ensuring they remain safe and enjoyable for residents.
  

Administrative and Board Support: Enhancing HOA Governance

A community management company supports administrative functions and effective governance, facilitating clear communication between residents and leadership.

• Board Meeting Facilitation: Scheduling meetings, preparing agendas, documenting minutes, and ensuring productive discussions that lead to actionable decisions.

• Record Keeping and Compliance: Maintaining legal records, contracts, correspondence, and governance documents, ensuring compliance with state and federal regulations.

• Communication Management: An HOA manager acts as a liaison between the board members and HOA members, handling inquiries, sharing critical updates, and building transparent communication.

• HOA Elections and Voting: Organizing annual elections, ensuring a fair and compliant voting process, and facilitating smooth transitions in leadership.
  

Leveraging Technology: Enhancing Efficiency and Communication

In today’s digital age, technology is crucial in streamlining homeowners association operations, improving transparency, and enhancing resident engagement. Hence, the HOA management company’s responsibilities include integrating and maintaining digital tools that simplify administrative tasks, financial oversight, and community communication.

• Online Payment and Financial Management: Implementing secure online platforms for assessment collection, expense tracking, and financial reporting, ensuring transparency and ease of use for homeowners and HOA board members.

• HOA Web Portals and Mobile Apps: Giving homeowners digital access to account information, governing documents, maintenance requests, and community updates, promoting engagement and accessibility.

• Automated Communication Systems: Utilizing email, text notifications, and digital newsletters to inform community members about policy changes, upcoming meetings, and community events, fostering timely and transparent communication.

• Smart Security and Access Controls: Overseeing the integration of gated entry systems, security cameras, and visitor management software to enhance community safety and protect shared amenities.

• Cloud-Based Record Keeping: Maintaining secure digital storage for governing documents, contracts, financial reports, and compliance records, ensuring accessibility and reducing administrative workload.

Overall, by leveraging technology, HOA management companies create a more connected, efficient, and responsive community. Incorporating modern digital solutions ensures streamlined operations, enhances homeowner satisfaction, and simplifies board member responsibilities.

Risk and Liability Management: Protecting the Community’s Interests

A management company’s vital responsibilities include minimizing risks and ensuring compliance with legal standards, which protects the association from potential challenges.

• Insurance Oversight: Ensuring the HOA has appropriate insurance coverage for liability, property damage, and other risks, safeguarding the community’s assets.

• Safety and Security Protocols: Implementing procedures to enhance security, prevent accidents, and reduce liabilities, contributing to a safe living environment.

• Legal Compliance and Regulatory Updates: To ensure compliance with legal obligations, the HOA must be informed about new laws, fair housing regulations, and municipal ordinances.

• Disaster and Emergency Preparedness: Developing contingency plans for natural disasters and emergencies, ensuring the community is prepared for unforeseen events.
  

Enhancing Resident Engagement: Strengthening Community Bonds

Beyond operational tasks, HOA management companies foster a sense of belonging and engagement among residents, strengthening the community’s social fabric.

• Community Events and Social Programs: Organizing events that unite neighbors, enhance community spirit, and promote social interaction.

• Resident Feedback and Surveys: Gathering input from homeowners improves HOA policies and services and ensures decisions reflect the community’s preferences.

• Newsletters and Digital Updates: Providing timely updates on community projects, upcoming meetings, and important notices, keeping residents informed and engaged.

• Homeowner Education: Offering informational sessions helps residents understand HOA rules, responsibilities, and rights and promotes informed participation.
  

In conclusion, a well-managed HOA is the backbone of a thriving, sustainable community. HOA management companies handle financial oversight, vendor coordination, rule enforcement, risk management, and resident engagement. This ensures stability, compliance, and an enhanced quality of life for all residents. Their expertise allows HOA boards to focus on strategic decisions while ensuring seamless day-to-day operations.

Choosing the right HOA management company is crucial to your community’s success. Ultimately, if you looking for a partner who delivers reliability, transparency, and exceptional service? Reach out today to see how a professional management team can elevate your HOA’s efficiency and resident satisfaction.

• A Management Company for your HOA
• 10 Benefits of Hiring an HOA Management Company
• How to Get the Most from Your HOA Management Company
• How to Change Your HOA Management Company

As a Board Member, you rely on your HOA management company to facilitate the day-to-day tasks and responsibilities of the Association. A great HOA management company helps streamline operations, enforce community rules, and ensure financial stability. However, not all management companies meet these expectations. If your HOA Board struggles with communication, financial mismanagement, or poor service, it may be time to reconsider your partnership. Sometimes, the Board identifies noticeable gaps in performance, which leads the entire community to feel the result of poor management and make a switch to a new HOA Management company.

When issues arise, a tactical conversation with the management company is generally helpful in implementing new practices and correcting the concerns. Still, the Association often changes management companies if a problem persists and a resolution is not met.

It is important to note that these ten reasons are not in any particular order—usually, the decision to make the switch results from many failed attempts to correct poor performance. Your community management company should prioritize customer satisfaction, create an environment of transparent communication, and be active in your Association.

Your homeowners’ association deserves a management company prioritizing communication, transparency, and proactive service. Ignoring these red flags can lead to financial instability, homeowner dissatisfaction, and unnecessary stress on Board members. A well-managed, engaged, and thriving community —if your current provider isn’t delivering that, it’s time for a change.

Is it time to search for a new management company? Don’t wait until minor issues become major problems. Please schedule a consultation with AAM today to discover how our expert team can provide the support, technology, and financial oversight your community needs to succeed.

• 10 Benefits of Hiring an HOA Management Company
• How to Get the Most from Your HOA Management Company
• How to Change Your HOA Management Company

What is Selective Enforcement

HOA selective enforcement involves enforcing some rules more strictly than others or targeting specific homeowners while ignoring others’ violations. This can lead to unfairness and loss of credibility, ultimately undermining homeowners’ trust and confidence in their HOA. Consistent enforcement of the governing documents, including CC&Rs and design guidelines, is essential for building trust and ensuring compliance.

Owners purchase properties within homeowners’ associations, expecting that governing document provisions will be enforced fairly and consistently for all members. One of the Board’s primary responsibilities is enforcing the association’s governing documents. However, if an HOA is inconsistent in its enforcement, it may legally waive its right to enforce those rules in the future.

Consistency is Key

HOAs must establish clear procedures for enforcing rules and restrictions that apply equally to all members. Governing documents outline specific requirements and restrictions for each unit/lot, and members must be aware of all conditions. Without consistent enforcement, the HOA risks legal challenges and diminishing community trust.

Board members should remain objective, even when compliance issues involve friends or neighbors. Community managers should identify violations promptly, and the Board of Directors should establish and approve an appropriate fine policy. Having a structured and well-documented process in place helps ensure that all residents follow community rules and that the consequences of non-compliance are reasonable and predictable.

Enforcement Procedures

There are several ways HOA Boards can choose to manage the enforcement process:

1) Complaint-Based Enforcement: The association will investigate, verify, and act on a rule violation only upon receiving a formal written complaint from a member.

2) Regular Inspections: A designated Board or Committee member(s) performs their periodic reviews of the community and provides written reports of violations to management, and letters are sent out requesting compliance.

3) Community Manager Inspections: The Board instructs the Community Manager or other designated representative to perform routine community inspections, record the violations, and send letters requesting compliance. Include photo documentation in the compliance letter.

Regardless of the method, the key is consistent application. Selective enforcement can lead to legal disputes, resentment among homeowners, and weakened HOA authority.

The Role of the Board

The HOA board enforces rules and regulations fairly and consistently across the community. To do this effectively, board members must know the rules and processes for identifying and addressing violations.

The Board must enforce policies consistently to avoid appearing “arbitrary and capricious. Inconsistent enforcement can result in lawsuits against the association and management. Board members should avoid hasty decisions on violations and enforcement. Instead, they should review the situation thoroughly, evaluate all relevant facts, and apply the governing documents equitably.

Preventing Selective Enforcement and Building Trust:

To avoid selective enforcement claims and potential lawsuits, the Board should:

• Lead by Example: Board members should adhere to the rules as association members.
• Gather Facts & Evidence: Ensure due diligence when investigating violations, including photos and witness statements.
• Respectful Communication: Treat all members with fairness and dignity when addressing violations.
• Seek Amicable Resolutions: Appoint Board members to meet with violating homeowners in good faith to resolve issues.
• Legal Consultation: If all enforcement efforts fail, the association’s attorney may need to advise the Board on the next steps.

Why Consistency Matters in HOA Enforcement

Consistency in HOA enforcement builds trust with homeowners and fosters a sense of fairness in the community. Regular inspections, a clear fine policy, and objective rule application hold all residents to the same standards. HOAs can create a strong, vibrant, cooperative community by maintaining an even-handed approach.

Finally, selective enforcement is not just a legal issue—it’s a moral one. Homeowners who feel unfairly targeted may resist compliance, leading to more significant disputes. Prioritizing fairness and consistency helps prevent conflicts, strengthens homeowner relationships, and supports the long-term success of the HOA.

• Building HOA Committees
• Fair Housing and HOA Enforcement
• 10 Tips for Successful HOA Board Members

Homeowners Associations (HOAs) are increasingly popular among homebuyers in the United States. These communities offer residents access to swimming pools, fitness centers, and gated security. HOAs also have strict rules and regulations that homeowners must adhere to, and failure to comply can result in fines or legal action.

If you’re buying or selling a home in an HOA, you may have heard the term “HOA estoppel” come up. An HOA estoppel is a crucial document that provides vital information about the property’s status and the homeowner’s financial obligations. This article will examine an HOA estoppel, why it’s essential, and how it affects you as a homeowner.

What is an HOA Estoppel, and what does it include?

An HOA Estoppel provides all fees that must be collected upon the successful closing of a resale property. The Estoppel is also known as a demand statement, certificate of assessment, resale statement, or closing statement, depending on the state. It includes fees like delinquent amounts from the seller, attorney fees for collections, working capital, transfer, reserve fund, and community enhancement fees. Fines for compliance issues may also be listed. The document also includes any fees owed to the managing agent. Most of these fees are payable only if escrow closes.

The document will include any special assessments due at closing or afterward, ensuring the buyer knows of future obligations. It also provides a brief description of the assessment’s purpose. The document may also list compliance issues, ensuring the buyer knows what needs correction to comply with governing documents.

The Purpose of HOA Estoppel

An HOA estoppel aims to protect the buyer and seller in a real estate transaction. The document informs the buyer of the exact HOA fees and outstanding debts they must pay before closing. It also protects the seller from being held responsible for any fees or fines after selling the property.

What does it cost?

The cost for preparing this statement varies by state. Some states cap the fee, governed by state statutes or HOA Acts. Typically, the managing agent receives the fee outlined in the association’s management agreement.

Who orders an Estoppel?

The “Estoppel” request is usually ordered by the title company or the closing attorney, depending on the state. In rare cases, the seller can order it, who will then provide the title or the closing attorney. The title company or the closing attorney professionals should complete the request since they will handle the closing documents. If AAM manages the community and you have questions about preparing or ordering this document, email AAM’s Disclosures team at disclosures@AssociatedAsset.com or visit our AAM Resales page.

In Summary

An HOA estoppel is crucial for buyers and sellers in real estate transactions. As a buyer, you must know the HOA fees and any outstanding debts before closing the property. As a seller, an HOA estoppel protects you from being responsible for any outstanding fees or fines after the sale.

• HOA Transfer Fees: What are they & Who pays them
• Association Contracts, What to Look for to Protect Your HOA

The HOA budget serves as the financial blueprint of a homeowner’s association (HOA). Specifically, the budget gives a detailed estimation of the association’s revenues, expenditures, and allocations toward reserve funds over a set time frame, typically a year.

Generally, the association’s Community Manager collaborates with the HOA Board Treasurer to formulate a preliminary budget. Alternatively, some associations form a Budgetary Committee involving community member volunteers. This approach not only divides the responsibility but also boosts understanding and approval of the budget, enabling residents to have a say in allocating their contributions.

What is an HOA Budget?

An HOA budget is more than a financial document; it is the cornerstone of a homeowner association’s operations, providing a comprehensive plan for managing community finances effectively. An HOA budget helps ensure the association thrives by addressing specific needs and challenges.

Here are the core components that define an HOA budget:

• Informed Financial Decision-Making
  • Guides the board in making well-informed financial choices.

• Anticipating Future Costs
  • Helps the board plan for the association’s upcoming expenses.

• Managing Association Funds
  • Allocates funds responsibly for:
    • Maintenance
    • Utilities
    • Insurance
    • Administrative fees

• Maintaining a Reserve Fund
  • Ensures a dedicated reserve fund is available for major repairs and replacements.

• Setting Homeowner Dues
  • Determines the homeowner dues, the primary source of revenue for the HOA.

• Accurate Financial Assessments
  • Equips the board to evaluate expenses and set fair assessments accurately.

By incorporating these elements, an HOA budget functions as a financial roadmap, supporting day-to-day operations while fostering long-term stability and transparency for the community.

An HOA budget can be segmented into three primary divisions:

Income primarily comes from homeowner assessments and dues, providing the funds needed to operate the community. Expenses cover day-to-day costs such as legal, management, landscaping, water, and waste, to name a few. The reserve funds are a dedicated allocation for significant repairs and future projects, ensuring the HOA remains financially stable and prepared for long-term needs. Together, these categories create a balanced financial plan that supports the community’s success.

When the HOA Board partners with a professional HOA management team, like AAM, an experienced accounting team guides the process or prepares a proper budget while offering invaluable insights for your annual budget planning.

Preparing Your HOA’s Annual Budget: A Step-by-Step Guide

A well-thought-out annual budget is essential to maintaining your HOA’s financial health and adhering to governing documents. Begin by identifying your community’s financial objectives, setting clear milestones for the year ahead, and aligning the process with essential deadlines. Many governing documents require that the approved budget be delivered to homeowners at least 30 days before the effective date or year-end, making early planning and organization crucial.

Follow These Strategic Steps for HOA Budget Preparation:

• Understand Governing Requirements:
  Review your association’s governing documents and state statutes for budget preparation and distribution requirements. Confirm if an annual reserve fund analysis is mandated or if updates to regulations impact your budget process.

• Analyze Historical Financial Data:
  Examine prior budgets and compare past projections to actual expenditures to identify trends or variances. Use this information to make informed adjustments to your new budget.

• Evaluate Reserve Fund Needs:
  Review the reserve study to ensure sufficient funding for long-term repairs and replacements. Aim for at least 70% funding and include plans for major upcoming expenditures, ensuring adequate cash flow.

• Plan for Vendor and Utility Costs:
  Contact vendors and utility providers to confirm expected costs for the upcoming year. For expiring contracts, solicit competitive bids through RFPs to maintain accurate financial forecasting.

• Account for Inflation and Cost Adjustments:
  Factor in potential changes due to inflation, wage increases, or fluctuating service rates. Ensure all anticipated expenses are captured by reviewing each line item in detail.

• Provide Transparency with Budget Narratives:
  Include explanations for income and expense projections, helping board members and homeowners understand how figures were determined. Use budgeting tools or spreadsheets to streamline data organization and calculation of homeowner dues.

• Secure Approval and Communicate the Budget:
  Present the completed budget at an open board meeting for approval. Once approved, share it with homeowners to foster transparency and build trust within the community.

How to Balance an HOA Budget?

The goal is to keep your budget balanced. If expenses exceed income, find ways to cut costs without lowering service quality. However, consider raising dues or a special assessment if balancing is still tricky. The main aim is to break even by the end of the year since associations are not-for-profit.

Additionally, adhering to due dates and stipulated deadlines for budgetary approval, as mentioned in the association’s legal documents, is paramount. Any delay or oversight could spark owner disputes or non-payment of dues.

HOA Budget Template

Example of an HOA Budget Template

Typical HOA budgets list expected income, expenses, and savings for reserves. If you’re new to this, online templates can help you with budgeting. We also have a Budgeting Tips Guide with a sample budget to help you plan.

In Conclusion

The HOA budget is an integral component of successful community management. It relies on rigorous data collection and computation, and the importance of early planning. Additionally, the budget indicates the residents’ dues amount while serving as a fiscal roadmap for the association’s finances.

Partner with AAM today to streamline your HOA budgeting process. Contact us for expert financial guidance tailored to your community.

• It’s Never Too Early to Start Planning
• Reviewing HOA Financials
• Budgeting Tips for Master Planned-Communities
• HOA Annual Board Meetings

HOA management companies handle a community’s day-to-day operations. Their services generally include maintaining common areas, managing financials, and enforcing rules and regulations. However, the level of service provided is not always equal and may not satisfy the needs of the community, residents, or Board. Sometimes, the Board faces switching HOA management companies due to poor communication, lack of transparency, or simply a change in the homeowner’s association’s priorities or needs.

Know What Your HOA Needs

Before you search for an HOA management company, you must clearly understand your association’s unique needs. Some of the things you should consider include the following:

• Community Size: The size of your community will impact the services you need from a management company. A larger community may require more frequent maintenance, implementation of community staff, and a higher level of financial management, while a smaller community may need less support.

• Priorities: What are your community’s top priorities?

• Budget: Your community’s budget will also impact the services you need from a management company. Consider how much you can afford to spend on management fees and ensure the management team can deliver the necessary services within your budget.

• Expertise: Finally, consider the specific knowledge your community needs from an HOA management team and HOA manager. For example, if your community requires extensive landscaping and outdoor maintenance, you should include a company with this expertise in the search process.

Qualities to Look for When Changing HOA Management Companies

Experience and Expertise

One of the most critical factors to consider when choosing a new management company is its experience and expertise. You want to choose a company with a proven track record of successfully managing similar properties. At AAM, we have decades of experience managing various properties, including single-family homes, master-planned communities, lifestyle communities, and condominiums. Questions to ask: How long have they been in business? Do they have experience managing communities similar to yours?

Services Offered

Another essential factor to consider when selecting an HOA management company is its range of services. A good HOA management company should offer a wide range of services to cover all aspects of your community. Some services to look for include financial management, administrative support, and vendor management. Additionally, the company should clearly outline its service offerings so you can determine if they meet your community’s unique needs. Questions to ask: do they offer the specific services your community needs? How do their fees compare to those of your current management company? Are there any hidden fees or charges you should be aware of?

Customer Service

Another essential factor to consider when choosing an HOA management company is its customer service. Your management company will work closely with your homeowners, so you want to ensure they have a reputation for excellent customer service. At AAM, we pride ourselves on providing exceptional customer service to our clients. We understand that every association has different needs, and we work closely with our clients to meet those needs.

Professionalism and Communication

Selecting an HOA management company with high professionalism and strong communication skills is crucial. You want to choose a management company that is responsive and proactive in communicating. At AAM, we have an open-door policy and encourage our clients to reach out with any questions or concerns. Our Client Relations division and regional leadership teams respond to HOA Board member concerns to resolve them quickly and diplomatically. We also provide regular communication through newsletters, email updates, and meetings.

Financial Management

Managing finances is one of the most critical aspects of HOA management. You want to choose a management company with a reputation for excellent financial management. At AAM, we have a team of experienced accountants dedicated to managing your association’s finances. We provide regular and accurate financial reports and work closely with clients to create budgets and financial plans.

Technology

With the ever-evolving technological landscape, it is essential to select an HOA management company that is up to date with the latest technology. At AAM, we use state-of-the-art software to manage all aspects of HOA management, from accounting to communication. Our online portal and mobile app allow homeowners to access important information and make payments online, making the process more convenient for everyone.

Considering the above factors, you can make an informed decision to ensure that your community is well-managed, efficiently run, and highly functional.

Request a Proposal from Potential HOA Management companies

Once you have a list of potential companies, contact them and request proposals. Ask for a detailed proposal outlining their services, fees, and additional costs. Ensure the proposal clearly describes the company’s experience, credentials, and references. We have an article, HOA RFP Specifications, that can aid HOA Board Members in preparing an RFP.

Once you’ve identified a management company you want to work with, you must communicate your needs and expectations. This is the time to ask questions about their services, fees, and processes. You should also be clear about your community’s priorities and any specific needs you have. Some of the things you should discuss with the potential management companies include the following:

Scope of services

What services will they provide? Will they handle financial management, maintenance, association records, and rule enforcement?

Fees

What are their fees, and how do they compare to your current management provider? This can be tricky. Be aware of low management fees; unfortunately, it’s common for HOA management companies to pad other costs, such as envelopes, printing, and mailing, to make up the difference. Make sure you are thorough when reviewing fees.

Communication

How will they communicate with the Board and homeowners? Will they provide regular updates and reports?

Expectations

What are their expectations for the Board and homeowners? What are your expectations of them? It is always a good idea to conduct a walk-through of the community with potential service providers.

Accreditations

It is also essential to check if the management company is licensed, insured, and accredited by industry associations. This accreditation ensures that the management company adheres to industry best practices and maintains high levels of professionalism.

Communicating with the new HOA management company ensures everyone is on the same page and the transition is as smooth as possible.

Notify Your Current HOA Management Company & Prepare for Transition

You must notify your current HOA management company after selecting your new HOA management company. Please provide them with written notice of your decision to terminate their services. Ensure that you follow the termination procedures outlined in your current contract.

Preparing for the transition is essential once you’ve chosen a new HOA management company. This will help ensure the switch is smooth and your community’s needs are met. Some of the things you should consider include the following:

Communicate the Change

Communicate the change to all homeowners in your community. Provide information on the new management provider, its services, and what homeowners can expect during the transition.

Organize Important Documents

Organize and transfer all important documents and information to the new HOA management company. This may include financial statements, contracts, governing documents, and other relevant information.

Coordinate with the Current HOA Management Company

Work with your current HOA management company to ensure a smooth transition. Provide them with any necessary information and ensure that no outstanding issues need to be resolved before the transition.

Establish a Transition Timeline

Establish a transition timeline with the new company. This timeline should include key dates for document transfer, the start date for the new company’s services, and any other important milestones.

Conduct a Walk-Through

Schedule another walk-through of the community with the new Community Manager. This will allow them to become familiar with the community and any maintenance needs.

Preparing for the transition can ensure that your community’s needs are met and that the new management provider can begin services immediately.

Monitor the Transition

Monitoring the new HOA management company’s performance is essential during the transition. Ensure that they follow the contract and provide quality services. Regular communication with the new company will help identify issues and ensure a smooth transition.

Board members often need help with decisions that require implementing changes in a way that doesn’t disrupt the association. Switching to a new HOA management company is one of those decisions. It can be incredibly challenging if the Board has no experience with transitioning or has had a negative experience in the past. However, by choosing a management company with a dedicated team focused on streamlining the onboarding process, you can be confident that the transition will be smooth, professional, and respectful to your community and its residents.

At AAM, we understand the importance of a seamless transition when switching HOA management companies. That’s why we have a dedicated Transition Team to ensure the process runs smoothly from day one. Our team follows a well-defined transition plan, which sets clear benchmarks for task completion at 30, 60, 90, and 120-day intervals, tailored to the size and needs of the community. With the help of advanced technology and effective communication, our experienced team can assume the association’s management without causing disruptions to the community’s daily operations. We are committed to providing excellent customer service and financial management to the residents right from the start.

Some of the things a Board should consider during the transition process:

Regular Communication

Establish regular communication with the new Manager throughout the transition. This will help you stay informed of any issues or challenges and ensure the transition is on track.

Monitor Financials

During the transition, monitor the community’s finances closely. Ensure that all financial information has been transferred to the new management company and that there are no discrepancies or billing issues.

Review Maintenance Reports

Review maintenance reports to ensure your community management company properly maintains the community. This includes things like landscaping, building maintenance, and repairs.

Address Any Issues Promptly

If you identify any issues during the transition, address them promptly. This will help ensure that the transition stays on track and that your community’s needs are being met.

By monitoring the transition to the new community management company, you can ensure that the process is successful and that your community’s needs are met. This will help ensure a stress-free transition and a successful long-term relationship with the new management company.

Conclusion:

Changing your HOA management company can be daunting, but with proper preparation, it can be a smooth and successful transition. By communicating the change, organizing important documents, coordinating with the current management company, establishing a transition timeline, and conducting a walk-through, you can ensure that the new management company is prepared to meet your community’s needs from day one.

If you’re an HOA Board Member considering changing your community’s management company, consider AAM HOA Management. With decades of experience managing communities of all sizes, AAM has the expertise and resources to provide your community with the highest level of service. We understand that each community is unique, and we work closely with our clients to provide customized services that meet their needs. With a focus on communication, transparency, and quality service, AAM is committed to delivering our clients the highest level of satisfaction. Contact us today to learn more about how we can help your community thrive with our top-tier HOA management services.

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