Condo Association Management Blog

Because you are investing other people's money, it might be best to consider very safe investments. Find a investment banker used to taking care of these kinds of investments. Low risk is best and something relatively accessible should you need it.

I would say "low" risk investments are out and only "no" risk investments would be legal (according to my bylaws anyway) such as money market accounts and cds even if the interest rate is currently so low. Better yet I think a budget surplus should be "returned" to the owners by reducing their monthly "dues" or suspending dues payments for a number of months. As long as there is money for usual operating expenses (plus two months' worth set aside), and money regularly being set aside for long-term replacement projects, and some set aside for emergencies (such as to cover the deductible for the master insurance plan), the money belongs to the owners. I am sure in this economy they could find a way to spend it on their own. Your budget for the next fiscal year should be more realistic. Why did you end up with a surplus?

You may invest the money on the T-Bill or Bond  
 
Or just put the money on the reserve account for future use on replacements items  
 
You may check your association docs. Or State Status for guidance

You sir or madam are the first association I've heard of in many moons that has a surplus in this economy. The first thing you should do is to give a small gift of appreciation to the board members or treasurer or whomever is responsible for your surplus. They are either insanely lucky or great financial stewards. You can't pay them, but you can certainly give them a small token of your appreciation. 
 
Next, I would say save it and put it in a CD. Our attorneys have said that the only investment appropriate for public funds are zero risk investments. Zero risk is defined as fully insured with no possibility of loss. The atty went on to say that these included ONLY CD's, savings, or insured money market accounts at federally insured depository institutions. 
 
Darron 
 
HOA Receivables

Check your documents. They may define your limits for investment. I do echo the other comments - it should be as safe as possible. 
 
The money should most likely go into reserves or an unplanned improvement project that would benefit the association, such as improving your entrance or improving a common facility. This project could be done to also make it more cost effective to maintain than the current item or facility. 
 
I would also recognize your board for the good work.

It should go to the reserves. Then, if after a reserve analysis it is determined you are ahead on reserve funding, you may be able to postpone fee increases for a year or more.