Reminder to review association finances during COVIDDrew Hendricks
Greetings to CLA clients and community association managers. The purpose of this e-mail is to provide you a “pep-talk” as to how to keep your communities strong going into the fourth quarter of 2020.
Keep Meeting: Most of our clients are meeting on Zoom and utilizing other all-electronic measures. Meetings for residential HOA’s, unless executive session, must remain open to all members. Note that features on Zoom (and other related software) allow you to mute rude members, or the membership at large following open session for owners. If you want to hold meetings in person be sure to meet all social distancing, sanitizing and density/quantity requirements. Also, please continue to refrain from using executive session for discussions which, even if uncomfortable, should be held in open session.
Review Financials: At meetings, keep minutes documenting your monthly review of association finances. Directors must review:
- Reconciliations of both the association’s operating and reserve accounts.
- This year’s revenues and expenses compared to this year’s budget.
- The latest bank account statements for operating and reserve accounts.
- The latest income statement for the association’s operating and reserve accounts.
- The most recent check register (also look for voids in the check number pattern).
- The monthly general ledger.
- Any delinquent assessment receivable reports.
Budget Season. Most communities will come to the start of their new fiscal year within the next 90 days. Some will have major expenses within the next three years because of required balcony inspections (and their related repairs), preventative and deferred maintenance, or capital expenditures. Every director should sit down with a copy of the community’s maintenance obligations (look in the CC&Rs), maintenance matrix and its most recent reserve study. It is important to come to the budget meeting with a firm understanding of the state of the community and a cooperative spirit as to how the Board can best slay these maintenance dragons. Budgets are generally agreed upon during the October meetings which are then to be distributed by the end of November.
We are Here to Help. The attorneys at CLA strive every day to not only assist, but to educate our clients. Please feel free to reach out to us for more information regarding this or any other community association legal issue.
Community Legal Advisors Inc.
Mark T. Guithues