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By Maria C. Kao & Matt Meadors  Note: This article first appeared in the Summer 2024 Edition of The Communicator Magazine.

EVERY DEVELOPMENT GOES through a transition where the original developers hand over the management and operations to the homeowners. Such a transition will include the finances of the association. Here, we focus on an association’s legal obligations, but also offer real-life advice from a professional manager experienced in turning over a community.

The finances should not be overlooked during the transition phase, and it is of utmost importance to make sure the basics are set up correctly. They should include assessment calculations, reserve studies, a thorough investigation into the operating budget and many, more discreet issues. Let’s synthesize the legal obligation information together with operational know-how for those interested in setting up the future of financial stability for a transitioning project.

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So, you have deferred maintenance, sharply rising costs, and the coffers are bare…

By Caroline McCormick, CAMEx, CCAM

Civil Code requires that HOAs disclose deferred maintenance, but many do not. Boards try to "save money" by waiting to perform maintenance or make needed repairs. This mentality, coupled with inflation, post-COVID19 labor and material price increases, and the notion that maintaining assessments artificially low is a benefit to the community, has created funding challenges for many associations.

WHERE DO WE START?

Robert W. Browning, PCAM, RS, and owner of Browning Reserve Group, believes that reserve studies are essential to the strategic planning of any community. "Having a professional study that’s reviewed annually just makes good business sense," says Browning. Start nine months before the fiscal year end by examining in detail the reserve study component list and funding scenario to make sure it is reasonable for your community. Make sure any...