The HOA board of your building has a number of responsibilities: planning budgets, monitoring financial reports, updating insurance policies, and enforcing rules.
There are times when all of this can become a challenge for the HOA, resulting in mistakes and problems in building operations. Read on to find out about five of the most common HOA mistakes, and how to avoid them.
Failing to Review Financials
When board members fail to review their financials and run a tight ship, it leaves the system open to abuse and inefficiencies. Fraud can happen when board members don’t review the financials regularly.
A thorough quarterly review of all building financials by at least 3 board members should offer sufficient coverage against mismanagement.
Not Budgeting for the Future
Too many HOAs fail to budget for the future. The building’s reserves need to be managed with a short-term, mid-term, and long-term view to the building’s financial security. In particular, always ensure you have enough money in the building’s reserves to cover unplanned maintenance of the urgent variety (new HVAC system, leaky roof).
Neglecting to Maintain Adequate Insurance
It’s your board’s responsibility to maintain updated and adequate insurance for the building. Failure to keep up with the board’s master insurance policy can put the entire building and all the owners’ investments at risk.
What You Can Do
Running an HOA board is never easy. There are a million things to do, and slip ups can happen from time to time. If you feel overwhelmed or think that you might benefit from some assistance, you can partner with a management company such as Hales Property Management. A proactive team at your side is only a phone call away!