Posted on Wed, Jun 16, 2010 @ 06:30 AM
Am seeking advice if condo associations should distribute along with any budget proposals the showing of “Current Expenses and Income” as well as a balance sheet to the unit members, as a guide in any decision making. Simple question is this a Standard Procedure in Condo Associations?
Posted on Wed, May 26, 2010 @ 09:24 PM
The financial responsibilities of a nonprofit community association, condo association, HOA or Homeowners Association are to:
1. Stay solvent: The condo association or HOA must manage its finances to avoid bankruptcy.
2. Be efficient: The association should provide services as efficiently as possible so funds aren't wasted.
3. Spend in accordance with the condo association's budget: By adopting a budget, the condo association establishes a plan for spending community association funds and identifies amounts that can be spent for each purpose.
4. Satisfy legal reporting requirements: State law requires nonprofit corporations to file several reports each year.
In meeting these responsibilities, the community association will satisfy other financial responsibilities.
For example, managing community association finances well means the condo association can meet payroll and pay bills and taxes.
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Posted on Tue, May 25, 2010 @ 07:53 AM
Our condo association paid attorney's fees from condo association reserve funds that were residing in the operating bank account. Now all monies are depleted. As assessment to condo owners be will be tremendous. Who is liable?
The short answer is no one is liable. Where was the money to pay the bill to come from? Did you want a special assessment? As a homeowner, be proactive. Know your documents, attend meetings, understand the issues. Good luck.
The board has a fiduciary responsibility to properly reserve. Your statement that they used "all the reserve money residing in the operating account" is somewhat troubling and interesting. Most often, reserves are kept in a separate account. If in operating, it may be this year's reserve contributions that were used for a legal case. Since that is unknown and you ask a very broad question (it appears to me in an effort at "gotcha!") the board may be assessing to replace the unexpected expense in legal fees.
I don't know anyone that reserves for a lawsuit or legal action. If the legal action (either in response to legal action taken against the community or taken on behalf of the community toward another entitiy in the interest of the community) apparently caused expenditures of funds, then it is an association expense.
Urge your board to be forthright and informative about what has happened. If it is still a legal case, they probably should not discuss the particulars but can give an overview so that people have a better understanding of what has happened.
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Posted on Wed, May 12, 2010 @ 06:50 AM
I am the head trustee of our small condo association. We have six owners total in our condo association. I am looking to update our financial management (move account to a more web-friendly, easier to manage bank) and am wondering if you have any idea on how this should happen. Can we collect interest? Do we have to file taxes? Are we a business? Are we a non-profit? How are we classified? I am new to this and the prior trustee didn't know much about the money.
HBWGGWYTSNAT
Posted on Tue, May 11, 2010 @ 06:35 AM
I have lived in a 17 unit condo building for 3 years. Over the past 10 months we have incurred a special assessment to cover the rebuilding of our back porches to be updated to Chicago's required code. I recently found out that we are being given another special assessment to cover an overdue utility bill and several tenants are afraid that they will no longer be able to afford their assessments. I also recently found out that several unit owners are not paying their assessments at all. Is there anything that can be done to retrieve this money from the non-paying owners and also to stop the condo association board from approving ridiculous increases to monthly assessments?
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Posted on Mon, May 10, 2010 @ 06:41 AM
I was on the our HOA board and volunteered for the budget committee. We located well over $350,000 of errors in the $897,000 HOA reserve. Records show this has been going on for three years. Even through I have a witness when finding these mistakes the BOD and Property Manager wanted to hide them from the owners. At the annual meeting they denied they were aware of any mistakes and this was the first they heard about it. This was an outright lie to the owners. Some of this is documented via email and the corrections made on the final reserve. In the process we were repeatedly denied all financial records. The HOA Board pushed the budget thru even known there were more errors to deal with. Does anyone know if legal action should/can be taken?
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Posted on Wed, Apr 28, 2010 @ 05:34 AM
My
condo association (HOA) is charging a "special assessment" this year. (The second in 8 years.) They sent a letter at the beginning of the year telling us we could make a discounted lump sum payment, or make payments each month. The total (without discount) is due at the end of this year.
I sent them a letter to tell them I have been unemployed for 2 years, and cannot pay monthly, but hopefully will have a job this year, and pay the total by the end of the year. They have changed the locks on the clubhouse and pool, and were distributing the keys today at the yearly "voting for new members" meeting. I went to get my key, and was denied because they say I'm behind in my fees. I am paid to date in the fees, but not the new assessment.
Can they do this? Deny giving me the new key to the pool, which I had access until they decided to spend money on changing the locks, which they have done twice in the last 8 years. Does this mean I don't need to pay the assessment unless I want pool access? I was unaware of this "rule" until I went to get my key. This is in Indiana. Is it legal?
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Posted on Tue, Apr 27, 2010 @ 06:23 AM
At our 2008 annual condo association meeting, the membership voted to have a "full" audit conducted for the 2008 year and put aside $6,000 for it. At our 2009 annual meeting, there was no vote regarding a full audit but $6,000 was budgeted for it. The current Condo Board doesn't feel that a full audit is necessary since the membership did not specifically vote for it, just a "review" is required.
Is the Condo Board required to have a full audit of the books since it was budgeted? Many of the membership want a full audit. Help?
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Posted on Thu, Apr 15, 2010 @ 05:10 AM
I'm looking for ideas on how to determine real estate value of existing and
new amenities at my condo in VA area of Washington DC.
I know it varies by state and all, but I'm hoping that by including some new and updating some of our amenities at least we can help to compensate for the fact that our monthly condo fees are a bit over market average and with no way to push them down.
We have a major $1M building renovation underway so I figure another $100K would be a good investment and since it'll be absorbed into the total debt. Here's some of the things on my mind which are of likely interest to our market (single & couple young professionals, young couple with 1-2 kids under 3).
- Add a jacuzzi to our spa area (already wired)
- add outdoor rooms with nice grill/fireplaces and pergolas (grills are banned on the individual patios)
- fenced dog run
- convert overgrown tree areas with drainage problem to a nature walk with waterfall
- replace pathetic 1 swing/slide tot lot with a new fancy one with cool things
- add a new modular building to serve as an exercise room, community room, on site management office
Suggestions on how to help value this so my condo association board of directors can understand that these do add value even if they personally won't use each. Thanks
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Posted on Wed, Apr 14, 2010 @ 05:27 AM
I was in the process of closing on a condo in Florida. Two days before the cl
osing we found out that there was 7
liens against the condo for a roofing job that was done 3 years ago. The job was $2.2 million and they have a balance of $206,000. The only way for the liens to be removed would be from the contractor. The only thing is that come June a reassessment is going to be done and the balance owed would be spread out again among the 115 condo owners that are there. They have an overdue balance for HOA fees for $126,000 and over due roof job of $208,000. The condo association will not sign a SFA form stating the association does not have the money to cover this amount. Is this normal for a condo association to be like this? (in this much debt).
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