What are the key features of a homeowner online account portal?

A homeowner online account portal should include security protocols, access to account information and account balance, the ability to make online payments, request management, communication tools, the ability to conduct surveys, community event management, access to community documents, and permission controls.

What are the benefits of a homeowner online account portal?

With an online account portal, homeowners have round-the-clock access to information, can conveniently pay dues and file requests, and can remain up-to-date on all the latest community information.

What are the pros and cons of HOA loans?

An HOA loan is a long-term financial commitment, but it provides associations with the funds they need to complete necessary or emergency repairs. It is especially helpful for HOAs who have depleted reserves or those who are unable to levy special assessments. HOAs can benefit from the fast completion of projects but at the same time, have the payments spread over time. Perhaps, the main con of HOA loans is the increased financial burden on homeowners. Even though the increase is significantly less than what they would have paid with a special assessment, homeowners will still have higher monthly assessment dues. If your homeowners become delinquent, the HOA will have a hard time paying back the loan.

What is the fiduciary responsibility of HOA board members?

As fiduciaries, board members have a legal duty to act in the best interests of their HOA. Their fiduciary duty can be broken down into three parts: duty of loyalty, duty of care, and duty to act within the scope of their authority. Board members must act fairly and in good faith to promote the well-being of the entire community. Board members must make informed decisions. Board members must follow the scope and limitations of their authority.

What are HOA board member responsibilities?

As part of the HOA board of directors, you must ensure compliance with governing documents and laws, create annual budgets, collect assessments, maintain common areas, and protect the wellbeing of your community.

What are the specific roles of HOA board members?

The HOA president oversees all board members' activities and serves as the leader of the community. The vice president takes the president's place if the latter is unable to perform his or her duties. Meanwhile, the HOA secretary performs clerical duties such as taking down meeting minutes, sending notices of meetings, and maintaining HOA records. The HOA treasurer is in charge of the HOA's finances. He or she maintains the books, monitors collections and delinquencies, and creates the budget.

What are the types of HOA fraud?

Fraud is a deliberate act of deception for the purpose of personal or financial gain. There are different types of HOA fraud including embezzlement and misappropriation of funds, kickbacks and bribes, and election fraud.

How to prevent HOA fraud?

HOA fraud can occur due to a lack of oversight. If you want to prevent HOA fraud, it’s important to establish checks and balances. This includes ensuring that all checks are made out to the HOA, requiring double signatures for checks, not letting management sign their own checks, having the entire board review financial documents, delegating financial responsibilities to the board, requiring board approval for new vendors, ensuring there is insurance for fraud, and establishing an HOA election committee.

What are the five account types?

Accounts are typically classified according to one of five primary types: Assets, Liabilities, Equity, Income, and Expense.

What is the difference between debit and credit?

A common misconception about debits and credits is that the former is always positive while the latter is always negative. This is not the case. Here is what you should remember when it comes to debits and credits: Debits raise asset and expense accounts and reduce liability and equity accounts, while credits reduce asset and expense accounts and raise liability and equity accounts.

What do tenants want in a rental property?

They want a clean space with nice amenities and working utilities. Taking care of your rental property is one way to ensure your tenants stay satisfied.

How do you treat tenants?

It's important to treat all tenants equally, showing no favoritism or disdain for select tenants. You should also treat them fairly and without personal bias.

How do I find good tenants?

Here are some tips on how to find good tenants: Come up with a rental criteria, list your property online, pay attention at property showings, and conduct background, credit, rental history, and employment checks.

Can landlords deny tenants?

It's essential to maintain the utmost professionalism when finding and screening tenants. Making decisions based on personal biases or reasons can put you in legal trouble. There are many reasons to deny renting tenants, such as: Monthly income can't cover rent and deposits, incomplete rental application, doesn't authorize background, credit, or rental history checks, fails to provide you with proof of income or employment, gives you fake references, has a history of late rent payments or damaging rental properties, etc.

admin, Author at HOA Management Software

Homeowner Online Account: How To Improve User Experience

admin on January 2, 2019

From access to various information to easy dues payments, a homeowner online account can help members of an HOA in many ways. The challenge is finding the right one that meets your standards.

Key Features of a Homeowner Online Account Portal

The modern world is always online. People expect instant access to information whenever and wherever they are. The idea that someone would have to call or email a request for something as simple as an account balance and then wait for a response is, frankly, unacceptable for most people today. A homeowner web portal, though, makes for an easy solution.

When considering which software to use for your homeowners or condo association, always remember the following integral features of the homeowner web portal:

1. Security

Security is a feature that you shouldn’t overlook. Because HOAs often deal with sensitive and confidential information, it’s paramount to make sure such information remains secure. Thus, when you’re considering your options, look for a homeowner online account portal that offers SSL encryption to protect your data.

Your provider’s servers should have several firewalls and redundant hard drives. It’s also important to have an offline backup in case of corrupted or hacked data.

In addition, every association member should have their own unique user ID and password. For management companies with numerous HOAs under their guidance, it’s critical to have a separate online portal login page for every HOA.

2. Account and Contact Information

Homeowners should have the ability to view their account information as well as manage their contact details. This way, if they need to change anything — such as their phone number, emergency contacts, or email address — they can do so straight from their computer. This will allow your HOA to remain up-to-date on all critical homeowner information.

3. Account Balance and Online Payments

Homeowners’ lives don’t revolve around the HOA. They have personal and professional lives that take up most of their time. Therefore, it can often be difficult to keep track of unpaid dues.

Your homeowner web account portal should allow homeowners to view their account balance and make payments online. This level of convenience is beneficial for both homeowners and the HOA as it can reduce the number of delinquencies as a result of forgotten payments.

4. Request Management

Gone are the days of printing out forms and manually filling them out to make service or architectural requests. Your homeowner web account portal should have a request management feature.

With this feature, homeowners should have the ability to make requests using their accounts. These requests then go straight to management or the board for review and approval or denial. Requesting homeowners should also be able to view the status of their requests with ease.

5. Communication Tools

Your homeowner portal should allow you to send reminders or notices to homeowners, whether it’s a mass message or meant for individual members. Some providers even have customizable, built-in templates that you can use. A portal with integrated communication tools will make it easier for all parties because they can access everything all in one place.

6. Conduct Surveys

It’s often difficult to acquire feedback from homeowners, especially if you have a large community with hundreds of members. Your homeowner’s online account portal should allow you to conduct surveys en masse. This way, you can obtain suggestions from homeowners or gauge how they feel about a particular change. You don’t even need to print out the questionnaires and physically hand them out. Save time and money with a digital portal.

7. Community Event Management

Community events are only fun if attendance is high. But, how can you ensure attendance when your members don’t even know that an event is coming up? Your online portal should allow you to post upcoming community events, complete with all the necessary details. Homeowners can then view these events using their individual accounts.

8. Community Documents Access

One of the hallmarks of a great online homeowner portal is document management. Your portal should let you upload and store important community documents, such as your meeting minutes and governing documents.

Homeowners should then have the ability to view and download these documents as they wish. Of course, that doesn’t mean all HOA documents should be available to them. Sensitive or confidential documents must remain protected and for management’s eyes only.

9. Permission Controls

Obviously, sensitive information like account balances, ledgers, and violation notices should not be freely available for anyone to see. However, this kind of information is still extremely valuable to the people it pertains to and should be easy to access.

That’s why your homeowner online account should include a robust account system that makes it easy to determine who sees what. You should have the ability to tag someone as a board member or a regular member of the community.

Beyond that, you should be able to control what each user is allowed to do, such as add new information, approve a request, view financial statements, and the like. Typically, only board members and HOA managers are privy to confidential or sensitive data. In the same way, only homeowners should have access to their own information. Other than that, your homeowner online portal should give you the ability to grant access to the permissions system.

Benefits of an Online Homeowner Portal

If you still feel on the fence about investing in a homeowner portal, take the following benefits into consideration:

1. Round-the-Clock Access to Information

The largest advantage of a web portal is the ease of access to various information and documents. Rather than getting in touch with the board, community manager, or support department, association members can download and read these documents online whenever they want.

This ease of access is great for both the community members and the support members who would otherwise be taking their call. They can make better use of their time by addressing more pressing issues.

2. Convenience

With an online portal, homeowners have an easier time completing HOA-related activities. There’s no need to do things the manual way, which is more time-consuming.

For instance, a homeowner online account makes it more convenient to pay HOA dues. You can send scheduled reminders or notices to homeowners, which they can see immediately. They can view their account balance and settle any overdue payments.

Another area a portal can help with is service requests. Homeowners can quickly make a service or architectural request without having to physically file the paperwork. All they need to do is enter their resident portal login information and navigate to the service they need.

3. Stay Up-to-Date

Once documents are written, they don’t always stay the same. As communities grow and need to tackle new challenges, the governing documents are often edited to meet them. To make sure everyone is following the same rules and guidelines, it’s important for them to have access to the most up-to-date version of all documents. The same is true for personal account information like balances and violations.

Automated, scheduled updates easily address this problem. Just make sure the most recent documents are always in the system, and your HOA management software or portal does the rest.

The Best Homeowner Online Portal for You

A homeowner online account portal is a great way to connect to your community, keep association members up-to-date, and streamline otherwise time-consuming processes. Rather than calling support and waiting around for a response, they can conveniently access all their information from a single, secure location.

Condo Manager offers the best HOA management software for communities of any size. Our comprehensive homeowner online account portal comes with all the features detailed above. Reap the benefits of our sophisticated management solutions today. When you are ready to upgrade your community’s online presence, request a demo or give us a call at (800)-626-1267.

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Frequently Asked Questions On HOA Loans

admin on July 12, 2018

When faced with unexpected expenses or necessary repairs, not all homeowners have funded reserves or the capacity to levy special assessments. Instead, they will take out a loan. HOA loans require adequate planning and understanding the intricacies of association loans can increase your chances of approval as well as help you get the best rates.

Everything You Need to Know About HOA Loans

What Is an HOA loan?

An HOA loan is when you receive a sum of money from a bank, creditor, or financial institution in exchange for future repayment of the total amount loaned — called the principal — plus interest. The interest, which is a percentage of the loan, is the fee charged by the creditor for being able to use their money.

What Is the Purpose of HOA Loans?

One of the most common reasons for taking out a loan is for financing HOA projects or repairs. These could be capital improvement projects that have been long in the making or repairs due to unexpected or emergency situations.

In both cases, the HOA may not have enough funds to pay for the anticipated expenses. HOAs will then take out a loan so that the homeowners won’t have to pay for the entire cost upfront. With a loan, the HOA can spread the total amount over the span of a year or more.

How Do HOA Loans Work?

Compared to personal loans, these loans are issued to the HOA as a non-profit corporation. Thus, creditors do not need to review the finances of individual homeowners. Since associations do not own any property, loans are collateralized through the HOA’s right to assess.

Banks may require HOAs to itemize loan repayments in their annual budget as a sign of loan commitment or levy a special assessment in the amount of the loan plus interest to serve as collateral. In case an HOA is unable to make the loan repayments, the bank may ask for the right to collect from individual homeowners.

What Are the Different Types of HOA Loans?

1. Line of Credit

A line of credit is a flexible type of HOA loan where there is a preset borrowing limit. The HOA can borrow as much as they need until the preset limit is reached. The bank will only charge interest on the actual amount borrowed. Since the interest rate is variable, monthly loan payments are not fixed. A line of credit loan has quick-term periods; it can typically last from a year up to 5 years.

A line of credit is an interest-only loan. The HOA is only required to pay interest while repairs or construction are ongoing. Loan repayments start upon completion of the project or when the credit limit has been reached.

A line of credit loan is ideal for HOAs who have short-term funding gaps. It can bridge the gap until the time when the HOA can come up with sufficient funds. For instance, the HOA may take out a line of credit to repair property damage caused by a natural disaster.

Since repairs are urgent, the association can use the loan to pay for expenses while they are waiting for their insurance payout, which they will then use to repay the loan. A line of credit can also bridge the gap between homeowner assessments and the actual amount needed for repairs.

2. Standard Term HOA Loan

In a standard term loan, HOAs receive the entire loaned amount from their creditor. This is ideal for large-scale repairs or land acquisition. The term period can range from 5 to 15 years. The interest rate is locked so the association pays the same amount each month. Since the loaned amount can be high, HOAs can lower monthly payments by choosing a longer-term period. However, they will end up paying more due to interest charges.

3. Short-Term HOA Loan

This type of HOA loan is the same as a standard term loan, but with a shorter-term period. These loans can last from 3 to 10 years.

HOAs will have higher monthly loan payments but can become debt-free much quicker. You also pay less interest.

4. Line of Credit with Conversion

HOAs can also opt for a line of credit with conversion. This HOA loan has two phases. In the first phase, the loan exists as a line of credit. You will only pay interest on the actual amount borrowed.

At the end of 12 months or upon completion of the project, the loan is converted to a standard term HOA loan. The bank establishes HOA loan rates and the association will then start repaying the principal plus interest until the end of the term period.

What Are the Pros of HOA Loans?

An HOA loan is a long-term financial commitment, but it provides associations with the funds they need to complete necessary or emergency repairs. It is especially helpful for HOAs who have depleted reserves or those who are unable to levy special assessments. Even for HOAs who levy a special assessment, the amount is often not enough to cover all the anticipated expenses.

HOAs can benefit from the fast completion of projects but at the same time, have the payments spread over time. Even if the HOA incurs a debt, they can restore the quality of life of homeowners prior to the damage. Meanwhile, capital improvement projects can increase property values and attract potential homebuyers to the community.

What Are the Cons of HOA Loans?

Perhaps, the main con of HOA loans is the increased financial burden on homeowners. Even though the increase is significantly less than what they would have paid with a special assessment, homeowners will still have higher monthly assessment dues.

If your homeowners become delinquent, the HOA will have a hard time paying back the loan. Incurring debt may also be disadvantageous if your HOA board lacks experience when dealing with loan repayments and capital planning. These scenarios can put your HOA in a precarious financial situation.

Can Condo Associations Take Out Loans?

Both HOAs and COAs can apply for loans. However, it’s important to consult your governing documents to see if HOA loans are allowed. If so, what are the requirements or stipulations? For instance, most HOAs will require approval from the majority of the homeowners before the board can take out a loan.

HOAs should also check their state laws regarding HOA loans. For instance, some states prohibit HOAs to borrow from their reserves or use the reserve fund as collateral for the loan. It’s best to consult an HOA attorney to ensure that everything is okay from a legal standpoint.

How Do I Qualify for an HOA Loan?

HOA loan requirements will depend on the financial institution you are borrowing from. However, in order to assess your HOA’s credit risk, they may ask for the following:

Delinquency Rate and Total Amount of Delinquencies: If an HOA has a high delinquency rate, the bank may question your ability to make loan payments.
Total Number of Units and Percentage of Owners vs. Renters
Reserve Study: Banks may require an HOA reserve study completed in the last 2 years.
Current Amount in Reserves: Banks prefer HOAs with funded reserves so even if homeowners do not pay their dues, the HOA can still make loan repayments.
Scope of Repairs and Estimated Cost of Repairs
Capacity of HOA Board for Loan Management
Homeowners’ Support for Borrowing
Monthly Assessment Dues: Banks may be less likely to approve HOAs with already high assessment dues. If loan payments are further added, there is a higher chance of delinquencies.
Professional Team of Contractors: Banks will also assess the skills and capabilities of the team you are planning to hire for repairs or construction.

Are HOAs Eligible for PPP?

The Payment Protection Program (PPP) is a federal loan to help keep small businesses afloat, particularly in difficult times such as the coronavirus pandemic.

HOAs may apply for a PPP loan as long as funding is still available and the association meets the requirements.

How Do I Plan for an HOA Loan?

HOAs often underestimate the amount of planning required when applying for a loan. Adequate planning is a must if you want to increase your chances of approval. Do not wait until the last minute before consulting your bank. Talk to them early on so that you know which requirements to prepare. Many banks will even work with you throughout the process.

Another way to plan for an HOA loan is to establish the scope of repair and identify your team of professionals. The bank will use this information to determine the size of your loan and your credit risk. Choosing a highly-qualified team of professionals to conduct repairs can increase your chances of loan approval.

HOAs may also choose to levy a special assessment ahead of an HOA loan. The funds raised can be used to resupply your reserve account. This shows the bank that the HOA has several options for repaying the loan. Levying a special assessment can also help you flush out delinquent homeowners.

Are HOA Loans Right for Your Association?

After reading the FAQs about HOA loans, you have a better understanding of what is an HOA loan, how they work, and how to increase your chances of approval. Based on the information, you can also gauge if taking out a loan is reasonable for your HOA. If the HOA foresees any difficulties, it may be worth sticking to other funding options such as increased assessments or a special assessment. Ultimately, the decision will depend on your association’s needs and capabilities.

If you have additional questions about HOA loans and other financial requirements, feel free to contact the Condo Manager team today! Call us at (800)-626-1267, email us at sales@condomanagerusa.com, or contact us online to learn more about our HOA software solutions.

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13 Tips And Ideas On How to Improve An HOA Newsletter

admin on May 21, 2018

Having a regular HOA newsletter sent to the homeowners in your community, whether by mail or by email, is a great way to keep everyone involved and inform the community of upcoming projects and events. It is something that you should not forego as it is an important step to improving your HOA.

HOA Newsletter Ideas: What to Include in Your Regular Newsletter

What should be included in an HOA newsletter? That is a common question many homeowners associations ask. It can be difficult to know what to put in your newsletter, especially if you write and distribute one on a regular basis. Below, you will find the essential items and some ideas on what you can include in your homeowner’s association newsletter:

1. Date, Issue, and Volume Number

Staying organized is paramount when it comes to writing and distributing community newsletters. A good way to keep track of your newsletters and maintain organization is to date each issue. If you can, it is even better to include an issue and volume number on each one.

This way, both the newsletter committee and the members of the community know which newsletter is the most current. It also eliminates the possibility of members mistakenly reading old news.

2. A Brief Overview

It is a good idea to let readers know what to expect in the HOA newsletter. How do you do that? By including a brief overview at the opening, of course!

Make sure to call attention to the most critical items that the newsletter will cover. This will allow you to capture their interest right from the start and encourage them to read through the whole thing.

3. A Message from the Board

If the HOA board has anything important to share, include it in the newsletter, too. It does not even need to be anything major or critical. The board or the president can simply share a few friendly words with community members at the beginning of the newsletter. This will help create a warm and neighborly atmosphere.

4. Updates from Recent Board Meetings

Your HOA newsletter is a valuable communication tool. It is the ideal place to let residents know about any issues recently brought to the board’s attention.

Any decision that the board made should also appear in the newsletter. Homeowners value transparency, and newsletters are a great way to communicate this information clearly and quickly to the whole community. You can also include updates regarding construction or maintenance as well as notices of upcoming projects.

5. Relevant Local News

Events in the wider community and the city as a whole can greatly affect your homeowner’s association. You can include any local news that may have an impact on the residents of your community so that everyone stays informed about these issues. Not everyone in your community watches the news, so residents will appreciate your newsletter filling in the gap for them.

6. Energy-Saving Tips

Energy conservation is a hot issue, and your HOA newsletter is a great place to share energy-saving tips. You need not limit yourself to energy-saving tips either. You can dive into other topics like water conservation, emergency preparedness, and the like. If your newsletter offers value to its readers, more people are more likely to anticipate the next issue.

7. Maintenance Tips

Your HOA newsletter can also be a place for other tips relating to maintenance in the community, such as gardening, taking care of the lawn, or preparing your residence for bad weather. You can even include tips on how homeowners can maintain and repair their household appliances, floor tiles, sidings, and the like. Again, it is all about offering information your readers will find value in.

8. Rules and Regulations Reminders

At times, it becomes necessary to remind homeowners of certain rules, especially if there are new rules or changes to existing ones. Reminding them in the form of an HOA newsletter can be a gentle way of encouraging homeowners to adhere to the rules set forth by the governing documents. This is particularly important as not all residents are familiar with the minute details of these documents.

9. Upcoming Events

Of course, it is always important to include a calendar in the newsletter with a list of all upcoming events in your HOA. This can be anything from your annual ice-cream social to dates of expected building projects. But, most importantly, it should include the dates of upcoming board meetings. This will help community members to stay involved.

10. Commendations of Residents or Board Members

Perhaps one of the most overlooked homeowners association newsletter ideas is to include commendations. Acknowledging residents, board members, or committee members through the written medium of a newsletter is a great way to spread goodwill throughout the HOA. It is important for these volunteers to feel valued. In each issue, you can include thanks and praises for community members that have gone above and beyond in making the association a better place.

11. Member News

Community members likely want to know what is going on with their neighbors as well. As such, give them an opportunity to share their own exciting news, such as an upcoming wedding, graduation, retirement, and any other milestone.

Members can also write their own content and submit it to the newsletter committee. When their content makes it to print, do not forget to give credit. Encouraging members to get involved in the writing process is one way to improve readership, too.

12. Photos

A good newsletter has a healthy mix of text and images. Along with sharing pertinent news, events, reminders, and tips, you should also include visuals that complement the content of your newsletter. This can be in the form of photos, graphs, charts, and infographics.

Additionally, you can even dedicate an entire section of the newsletter just for photos. A photo gallery showing fun times at a past community event, for instance, will allow members to relive good memories and encourage others to participate in future events. Just make sure you get permission to share the photos from the people in them and the people who took them.

13. A Summary

How do you end a newsletter? One way to effectively close a newsletter is to write a summary of its contents. You can also include an outline of the upcoming newsletter so that people know what to expect in the next issue.

How to Improve Your Homeowner Association Newsletter

What makes a good newsletter? A quick search online will give you access to a number of HOA newsletter templates and newsletter examples, but a good newsletter is more than just purely aesthetics. Although the design is definitely part of it, there are other things that comprise a good newsletter.

1. Make It Attractive

People are visual creatures, so it comes as no surprise that the design and layout of your HOA newsletter can affect readership. If a newsletter looks dull or boring, members will likely drop it.

Make sure to capture reader attention with an appealing yet professional design. The design should be coherent and consistent with the image of your homeowner’s association. Mix it up with different font styles, but see to it that they complement each other instead of clashing with each other. Keep it clean and classy yet engaging and attractive.

If you can’t spare the time or resources to have one professionally designed, you can look for free newsletter templates online. There are many websites that offer them, such as StockLayouts and even Pinterest. A well-rounded HOA software can also provide a homeowners association newsletter template together with other management solutions.

2. Make It Easy to Scan

You might ask, “How do I write a community newsletter?” The contents of your HOA newsletter should be concise and direct. That means no beating around the bush and keeping passive tones to a minimum. No one wants to read thick blocks of continuous text. Instead, break them up into shorter, more manageable paragraphs. Only expound on points further if you think it is necessary. Otherwise, keep it short and sweet.

It is also not a good idea to use jargon or technical terms within your newsletter. Make it easy for your readers to understand what you are trying to say. This is also where photos and graphics can come in handy. Images can break up the text and support your points as well.

3. Use Accurate Information

The main purpose of an HOA newsletter is to spread information to community members.

Therefore, it should go without saying that the information you do present should be accurate and up-to-date. Stay away from rumors. Your newsletter is not a tabloid or gossip column.

For instance, if you are reporting news, make sure to report it truthfully. Do not embellish. If you include contact information or website links, they should also be accurate. Test out the URLs before printing (for hard copies) or disseminating (for digital) your newsletter.

4. Maintain an Overall Positive Impression

Your HOA newsletter should discuss problems within the association as well as solutions, but that does not mean you can write in an overall negative tone. As a whole, your newsletter should be encouraging and constructive. This is where commendations and member news play a significant role. You should also refrain from discussing neighbor disputes.

5. Assign Important Roles

At the very least, your HOA newsletter should have an editor and a lead writer. Assigning people to these roles ensures that the responsibility of writing newsletters is always fulfilled. Although it is not necessary, board members can take part as well.

A Key Communication Tool

A regular HOA newsletter is a great way to keep community members involved, boost the morale of board members, and keep everyone educated and informed. Take some time this month to focus on the newsletter to see where you can improve it. Then, use these tips to help expand the content to make it relevant and interesting to everyone who reads it.

Communication is imperative in any homeowners association. Simplify communication in your community with the help of a comprehensive HOA management software like Condo Manager. Give us a call today at (800) 626-1267 or fill out this online form for a free demo of our product.

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Condo Fees: Everything You Need To Know

admin on March 12, 2018

Condominiums are becoming increasingly popular in the United States, with many choosing to live in condos due to their affordability and convenience. But, with condo living comes condo fees.

What Are Condo Fees?

If you have ever lived in a condominium, then you know there are common areas that all owners share. These common areas, though, do not just maintain themselves. All owners are responsible for keeping these common areas in good condition. This is where condominium fees come in.

Condo fees, also known as condo maintenance fees, are fees that condo owners pay to the condo association (COA). The association then uses these fees to pay for various maintenance and repair costs. Condo owners pay these fees on a regular basis. Depending on the association, it could be on a monthly, quarterly, semi-annual, or annual basis.

Given the number of condominiums nowadays, it is essential to weigh your options first before coming to a decision. That means comparing the cost of condo dues as well as what these fees cover. After all, not all condo associations charge the same fees for the same things. For instance, a COA’s fees might cover the cost of common area maintenance but not trash removal services.

Are condo fees and HOA fees the same? In a lot of ways, condo fees and HOA fees are the same. But, the difference is that condominium fees related to condo associations, while homeowners association fees relate to — surprise, surprise — homeowners associations. The former exists to cover the maintenance and repair of common areas, which all condo owners have joint ownership of. On the other hand, in a homeowners association, the common areas are owned by the HOA.

Additionally, you may wonder, “Do all condos have HOA fees?” Almost all condominiums charge fees to owners for the maintenance and upkeep of common areas.

What Is Included in a Condo Fee?

Before choosing a condominium to live in, you must first understand how condominium fees work and what they cover. Again, not all condo maintenance fees cover the same things.

So, what do condo HOA fees cover? Typically, a condominium maintenance fee covers the maintenance of amenities and common areas. This includes landscaping, lobbies, sidewalks, patios, tennis courts, gyms, and elevators. They might also cover utilities, wages, management fees, and emergencies.

Apart from the operating fund, which the association uses to pay for day-to-day expenses, condo associations should also have a reserve fund. The association taps into this fund to cover the cost of large repairs or replacements as well as contingencies. Every association must keep its reserves properly funded.

How Are Condo Association Fees Calculated?

Every condo association has a set of members, called the board of directors, who manage the association. Along with overseeing the maintenance of the community, the board also carries the task of preparing the budget for the upcoming year. From this, the board can calculate how much to charge each condo owner in fees.

To prepare the budget, the condo board must consider all of the association’s basic expenses. They anticipate how much the COA expects to pay for things like trash collection, snow removal, landscaping, and other maintenance work. They also take into account things like insurance, utilities, housekeeping, property taxes, legal fees, wages, office expenses, etc.

Once the board has a projected cost of expenses in mind, they will then divide this by the total number of condo owners in the association. This includes the board members themselves as they are not exempt from paying condo dues.

Condo Fees on Average

How much are condo fees? Condominium fees can vary from association to association. If your condominium has a lot of amenities, your fees tend to reflect that. After all, swimming pools, tennis courts, gyms, and outdoor areas cannot stay in good condition without proper care.

Similarly, larger amenities also usually command a higher condo fee given the extent of maintenance required. The location and exclusivity of your condominium can also play a part in influencing the cost of your condo fee. If you live in an upscale neighborhood, then expect to pay a higher condo fee. Some associations even calculate fees based on how large your unit is.

Condo maintenance fees can vary wildly from $50 to $1,000. Again, there are a lot of factors that can affect the cost. Average condo fees, though, sit somewhere in the $300 to $400 range.

Can the Board Increase Condo Fees?

The short answer is yes. Condo boards do hold the power to raise condo maintenance fees, provided the association’s governing documents say so. Some states have laws regulating the increase in fees, though. For example, according to Civil Code Section 5605 in California, a condo board may not raise the fee by more than 20 percent of the amount levied the previous fiscal year.

Additionally, your association’s CC&Rs might have certain restrictions about a fee increase. It is worth noting, though, that should your CC&Rs conflict with state laws, the latter takes precedence.

Why Are Condo Fees So Expensive?

The location, exclusivity, and amount or extent of amenities in your condo can affect the cost of your fees. If you feel like your fees are too high, though, the condo board should take a look at some of the ways it can reduce the association’s expenses.

Investing in energy-efficient solutions, for instance, can have a long-lasting impact on a condominium’s budget. Additionally, condo associations should not be afraid to ask for special promos or discounts from vendors. It is also worth digitizing COA processes with the help of management software.

What Happens When You Don’t Pay Condo Fees?

If your daily living expenses are already too high for you to handle, you may feel tempted to skip paying your condominium fees altogether. That is a bad idea, though.

These fees are mandatory, which means there is no way you can get out of paying them. Once you agree to live in a condo managed by an association, you agree to its many stipulations as well. That includes paying condo dues.

Condo owners who default on their payments can face a number of potential consequences. Depending on what state laws and a COA’s governing documents permit, a condo board can impose one or all of the following:

Charge a Late Fee. Failure to pay your dues on time can result in a late fee.
Restrict Owner Privileges. The condo board can suspend your privileges and restrict your access to condo amenities if you stop paying your fees.
Take Legal Action. Refusing to pay your fees can lead to the board filing a lawsuit against you. In more extreme cases, the condo board may file a lien on your unit and initiate a foreclosure.

Given the severity of some of these outcomes, it is best to simply pay your dues on time. If you are experiencing financial troubles, talk to your board about setting up a payment plan.

Take Everything Into Consideration

While it is true that condo living poses many benefits, it also comes with responsibilities. Whether or not you intend to use a condo’s amenities, you still need to pay condo fees regularly. As such, before you dive straight into a decision, you must examine all the pros and cons first. Condo living is not for everyone, but it is certainly a lifestyle worth considering.

Managing a condo association can come as a challenge, especially if you have little to no experience. Condo Manager streamlines and automates most of the management processes, making it easier for any condo board or management company. Call us today at (800) 626-1267 or contact us online for a free demo.

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What Do The HOA Board of Directors Do For A Community?

admin on February 23, 2018

A successful homeowners association requires a strong board of directors. It’s important to have HOA board members who can fulfill their roles and responsibilities to the community. Here’s what homeowners should expect from their HOA board of directors.

HOA Board of Directors: An Overview of Their Roles and Responsibilities

An HOA board is comprised of homeowners who volunteer to assist in the day-to-day operations of their community. The association grants these board members authority so that they can fulfill their HOA responsibilities to homeowners.

Fiduciary Responsibility of HOA Board Members

Board members are placed in a position of trust and authority, which they need to effectively govern their HOA community. However, to prevent board members from abusing their power, the association imposes a fiduciary duty on the board. It is an essential component of the board member code of ethics.

As fiduciaries, board members have a legal duty to act in the best interests of their HOA. Their fiduciary duties can be broken down into three parts: duty of loyalty, duty of care, and duty to act within the scope of their authority.

Duty of Loyalty: Those who hold board member positions must act fairly and in good faith to promote the well-being of the entire community. Board members must not make decisions that promote their personal interests or result in personal gain.
Duty of Care: HOA board members must make informed decisions. They must have sound judgment and do the necessary research before making decisions on behalf of the community.
Duty to Act: Board members must also act within the scope of their authority. They must follow the scope and limitations of their authority, which are outlined in the HOA’s governing documents.

These fiduciary duties of HOA board members ensure that they fulfill their roles and responsibilities.

A Complete List of HOA Board Member Responsibilities

Here is a list of the roles and responsibilities of the HOA board of directors.

1. Compliance with Governing Documents and Laws

Board members are tasked with ensuring that all homeowners comply with the governing documents at all times. This entails strict and uniform enforcement of HOA rules and regulations.

For instance, homeowners must follow the architectural standards of the association. Failure to do so will require appropriate action from the board — such as the imposition of violations and fines.

Board members also ensure that the HOA community abides by federal, state, and local laws. HOAs must comply with federal laws such as the Fair Housing Act (FHA) and Americans with Disabilities Act (ADA), as well as other state and local laws that apply to HOAs.

By ensuring strict compliance with the governing documents and laws, HOA board members can maintain a high standard of living for homeowners. Compliance is also crucial in preserving the property values of the entire community.

2. HOA Budget and Assessments

The annual budget is one of the main responsibilities of the HOA board. To create the budget, the board must determine necessary expenses including operating costs, utilities, insurance payments, and reserve contributions. They then look at the estimated income from homeowner dues to check if it is enough to cover expenses. Apart from creating the budget, the board must ensure that the budget is maintained throughout the fiscal year.

Board members also have a responsibility to collect assessments. They must take reasonable action to ensure that all homeowners comply with their collection efforts. Otherwise, the board has the authority to impose fines, liens, or foreclosures on delinquent homeowners.

3. Maintenance of Common Areas

The HOA board of directors is responsible for the maintenance and upkeep of common areas. Board members must create plans for meeting their maintenance responsibilities. Maintenance plans are essential so board members can keep track of assets and determine which ones need to be prioritized.

Board members perform routine inspections to ensure that shared assets are in good working condition and to avoid unnecessary breakdowns and extensive repairs. For instance, the board schedules monthly roof repairs to ensure that there are no leaks. This is cost-effective as emergency roof repairs can be very expensive.

They must also ensure that maintenance expenses are well within the limits of the annual HOA budget. If the HOA has a limited budget, the board determines priority maintenance tasks and ensures that deferred tasks do not put the community at risk.

4. Protect the Community

It is the HOA board of directors’ responsibility to protect the general well-being of the community. Along with uniform compliance and enforcement, board members must also ensure that there are no discriminatory practices or behaviors happening in their community.

They make sure that HOA rules are neutral and that homeowners are not judged based on their status, sex, race, or religion. It’s also important to provide individuals with disabilities with the accommodations they need to achieve a standard of living that is on par with other homeowners.

The HOA board must also promote procedures that will protect the community from crimes or injuries. For instance, if a certain house is posing as an immediate health or safety risk, the board has the authority to enter the premises and rectify the emergency situation.

Specific HOA Board Member Roles and Responsibilities

Apart from general roles and responsibilities, board members also have individual responsibilities based on the position that they hold. Here is a list of duties for the different HOA board of directors positions:

HOA President

The HOA president serves as the leader of the board. He or she supervises other board members and oversees most of the board’s activities. An HOA president also presides over board meetings and establishes order and decorum; appoints committees and delegates tasks; represents the HOA in activities and events and serves as the authority on HOA rules and governing documents.

HOA Vice President

The HOA vice president assumes the roles and responsibilities of the president in his or her absence. This ensures a smooth flow of business even if the president is absent. As such, the vice president must have the same capabilities as the president. The vice president may also perform duties that are assigned to him or her by the board.

HOA Secretary

The HOA secretary performs a variety of clerical duties. They keep the minutes of board meetings and publish them in a timely manner, provide proper notice of meetings, keep official records and documents, maintain a master list of homeowners, distribute reports and documents during meetings or upon request, keep track of document deadlines and requirements, and certify documents that are submitted to third parties or authorities.

HOA Treasurer

The HOA treasurer is tasked with maintaining the finances of the community.

This includes accounting and maintaining financial records; overseeing collections and monitoring delinquencies; receiving monies and checks; creating and maintaining the annual budget; creating financial reports for the board and homeowners. The treasurer may also receive assistance from an HOA management company or use HOA software to perform their duties.

HOA Board of Directors Qualifications

The requirements or qualifications for being a board member will depend on your governing documents. Though not all HOAs will require their board to have a degree or experience in community management, it’s important for aspiring board members who have the initiative to learn about managing an HOA. To fulfill HOA board member roles and responsibilities, it’s also important for aspiring members to know their governing documents by heart. Choosing a qualified board of directors can then prevent financial mistakes and other consequences that can impact the wellbeing of the community.

Serving Your Community as Part of the HOA Board of Directors

If you think that being part of the HOA board of directors is all about power and authority, think again. Becoming an HOA board member is not easy; you’ll be faced with what seems like a never-ending list of tasks and responsibilities. As a volunteer position, there’s no compensation for being a board member either.

However, if you have a passion for serving your community, joining the HOA board of directors may be one of the most fulfilling roles that you’ll ever have. So make sure to talk to your HOA about board member opportunities.

Does your HOA board of directors need help with community management? If so, feel free to reach out to the Condo Manager team today! Call us at (800) 626-1267, email us at sales@condomanagerusa.com, or contact us online to learn about our HOA software solutions.

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How To Prevent Homeowners Association Fraud

admin on January 2, 2018

Homeowners association fraud or embezzlement can happen anytime, anywhere, and anyone — even to the closest, tight-knit communities. If you want to safeguard the financial health of your community, consider these strategies to prevent HOA fraud.

Most Common Types of HOA Fraud to Look Out For

HOAs are run by a handful of people, known as the board of directors. They handle the day-to-day operations of the association, including the management of funds. If there are no checks and balances set in place, it can be very easy for a dishonest board member to commit fraud. However, HOA fraud isn’t exclusive to board members. Managers, employees, and volunteer homeowners can also commit fraud if the HOA has lax rules and standards.

What is HOA fraud? Fraud is a deliberate act of deception for the purpose of personal or financial gain. If you don’t want your community to become an unwitting victim, here are the most common types of HOA fraud that you need to look out for.

HOA Embezzlement

Homeowners association embezzlement is a form of theft. It involves a person taking property that was entrusted in his/her care by the association and using it for him/herself. HOA embezzlement comes in different forms. It can be a board member issuing checks made out to their name, collecting dues and payments but pocketing the funds, or altering financial documents.

HOA Mismanagement of Funds

Mismanagement or misappropriation of funds in a specific type of embezzlement. It involves a person taking HOA funds and using them for his or her personal benefit.

HOA Kickbacks

Kickbacks are payments or gifts that a vendor gives to a board member in exchange for hiring their company. It is also HOA fraud when a board member receives a portion of the contract money.

HOA Election Fraud

Election fraud can have many forms. The board can skip the annual elections or postpone it indefinitely to keep their positions. Individuals may also rig the election results to produce their desired outcome or forge proxy signatures to collect votes.

Best Ways to Prevent HOA Fraud

HOA fraud can occur due to a lack of oversight. If you want to prevent HOA fraud, it’s important to establish checks and balances. These will make board members, managers, and employees accountable for their actions, thereby reducing the potential for fraud or embezzlement.

1. All Checks Should Be Made Out to the HOA

Sometimes, for the sake of convenience, the board may issue checks to themselves or to certain individuals. However, this makes it easy for a dishonest member to commit fraud.

To prevent check fraud, ensure that all checks are made out to the HOA. You should also limit access to the checks to prevent unauthorized persons from issuing checks out to themselves.

2. Require Double Signatures for Checks

Another way to avoid check fraud is to require signatures from two members of the board. While this strategy may not be as efficient, especially when there are emergency situations, it helps prevent HOA fraud.

An option would be to set up this rule for transactions that exceed $500. The HOA can safeguard its bank accounts without hampering the essential day-to-day operations.

3. Do Not Let Management Sign Checks for Themselves

HOA management makes life easier for board members. Your manager handles HOA operations, including financial transactions that may occur throughout the day.

However, to discourage potential fraud from your management, do not let them issue checks for their own services. They can still issue checks for third parties. But if they perform maintenance work or other services, have a board member review the invoices and issue the checks.

4. Have Board Review Financial Documents

The HOA treasurer shouldn’t be left to do all the financial tasks. One way to safeguard the HOA is to have the board (or at least two members) independently review financial documents each month. This will make it harder to alter bank statements, inflate budgets, or duplicate reimbursements.

Regularly monitoring financial documents will also make it easier to spot anomalies or errors. Whether it’s an honest mistake or a sign of HOA fraud, the board can address the issue quickly.

5. Delegate Financial Responsibilities

Having just one person in charge of finances — whether it’s the treasurer or the manager — makes it very easy to commit fraud. As such, consider delegating the financial responsibilities to different members of the board.

You can have one person in charge of making the deposits while another is in charge of reconciling bank statements. This is a good example of introducing checks and balances in your HOA.

6. Require Board Approval for New Vendors

HOAs should be suspicious if a board member is pushing for a new, more expensive vendor even if the current one has been providing quality service. He or she may be receiving a kickback in exchange for the vendor contract.

Also, watch out for board members who recommend a company that is unqualified for the job. There may also be a kickback or the company may not even exist at all. Make sure that the board of directors is aware of vendor changes. You also need to properly vet new vendors to ensure that they are qualified professionals and that their prices are reasonable.

7. Make Sure HOA Is Insured for Fraud

To protect the financial status of your HOA, make sure that you are insured for fraud. Crime and fidelity insurance coverage will cover financial losses due to fraud or embezzlement.

You should also have directors and officers (D&O) insurance. This can protect board members from personal liability in case an employee or manager commits HOA fraud. Just because you have insurance, though, doesn’t mean that you should be complacent. In many cases, the payout can take a very long time and the HOA is left to deal with rising expenses.

8. Establish an HOA Election Committee

The board is responsible for scheduling and announcing the HOA elections. However, beyond that, the board should not be involved in the election process. Create an election committee that is comprised of homeowners who are guaranteed to be fair and impartial. They will be the ones to handle the election process to prevent HOA corruption or fraud.

Examples of HOA Fraud

Most HOA board members, managers, and employees are hard-working and good-intentioned people. However, this doesn’t mean that associations should be lax or complacent. We are all human and under dire or unfavorable circumstances, it’s possible that an individual might feel compelled to commit HOA fraud. To overstate the importance of vigilance, here are some examples of HOA embezzlement cases:

Case #1

A woman, who served as the secretary of her Florida HOA, was charged with grand theft after taking over $300,000 from HOA funds. The woman withdrew $121,390 from the HOA’s bank accounts and had written checks to herself and her husband for $97,045. She admitted that she used the stolen funds to pay for her mortgage and other bills.

Case #2

A man was indicted for money laundering and embezzlement after stealing more than $450,000 from a Virginia HOA over the course of four years. The man served as the association’s finance manager. The HOA discovered his theft through an HOA audit, which uncovered evidence of his wrongdoings.

Case #3

In New Jersey, a property manager was sentenced to six years in prison after embezzling over $400,000 from the condominium complex that he managed. The judge also ordered the woman to make full restitution to the HOA. She was caught after HOA residents notified residents of their delinquent dues despite having paid the fees.

Always Be On the Lookout for Signs of HOA Embezzlement or Fraud

Most HOAs don’t know that there has been fraud or embezzlement until it’s too late. By then, your association may have already lost a large sum of money. It could take years to recover these stolen funds — if they can be recovered at all.

This puts the HOA in a precarious financial situation. Add to that, bad press can also turn off new homebuyers and cause property values to drop.

To protect the financial well-being of your community, consider implementing these strategies we recommended. These additional steps may take more time and effort but oversight and vigilance are crucial for preventing HOA fraud in your community.

HOA fraud can go undetected if your finances are a mess. If you need help with financial management, feel free to contact the Condo Manager team today! Call us at (800) 626-1267, email us at sales@condomanagerusa.com, or contact us online to learn more about our HOA software solutions.

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Know Your Rights: Legal Rights For Condo Owners

admin on December 18, 2017

Many condo owners feel like they are not in control. They must follow condo association rules to the letter or else, face steep fines and fees. While compliance is certainly a prerequisite for living in a residential community, that doesn’t mean that you have to endure injustices or incompetence from your association. Always keep in mind these legal rights for condo owners.

What Are the Legal Rights for Condo Owners?

When owners purchase a unit in a condo association, they agree to take on certain duties and responsibilities, such as paying association dues and complying with the governing documents. In exchange, they receive condominium ownership rights, which gives owners the authority to use their unit in a manner that affords them a high quality of life.

Here’s a brief recap of the different documents that govern a condo association:

Condo Bylaws vs Rules and Regulations vs Declarations

Condo bylaws outline the procedures for how the association is to be run, particularly by the board of directors. This governing document includes the number of board members, duties and responsibilities of the board, length of board member service terms, frequency of board meetings, and board election and quorum requirements.
Declaration of covenants, conditions, and restrictions (CC&Rs) establish the “ground rules” for the condo association. This governing document also establishes the obligations of condo owners to the association and vice versa.
Condo association rules and regulations refer to the “do’s and don’ts” in your community. The board of directors creates rules and regulations that are in line with the condo association’s CC&Rs. While CC&Rs are recorded with the county recorder’s office, the rules and regulations are not. Thus, rules and regulations have more flexibility and can be amended according to established procedures.

Condo Laws

Federal, state, and local laws will always prevail over a condo association’s governing documents. If there is a stipulation that goes against condo laws, they then become unenforceable HOA rules. Condo laws vary by state so it’s important to check your local laws when determining legal rights for condo owners.

7 Legal Rights for Condo Owners

Buying a condo affords you certain rights such as exclusive ownership of your unit, the authority to rent or lease the unit, and the freedom to use shared facilities without fees. To have a pleasant condo living experience, keep in mind these legal rights for condo owners.

1. The Right to Access Condo Documents

Condo owners can, at any time or for any purpose, request to see the association’s governing documents, as well as financial reports, annual budgets, board meeting minutes, vendor contracts, reserve account statements, and insurance policies.

The only exception would be for documents with confidential information such as delinquencies. Condo owners also have the right to inspect these documents and make personal copies. Following a written request, the board must provide the documents to the condo owner.

2. The Right to Equality and Non-Discrimination

It is against the law for condo associations to discriminate against their owners based on race or ethnicity, nationality, religion, sex, sexual orientation, marital status, familial status, and disability.

Condo associations must abide by federal laws such as the Fair Housing Act (FHA) and the Americans with Disabilities Act (ADA), as well as state and local laws.

Condo owners with disabilities also have a right to reasonable accommodations such as ramps and handrails so that they can have full access to their unit and the condo’s facilities. Similarly, service animals and emotional support animals are allowed as reasonable accommodations even if the condo has a “no pet” policy.

3. The Right to Notice and Meetings

Condo owners have a right to receive adequate notice of upcoming board meetings. Notices must be placed on common areas, including the entrance and elevators, or announced through text, email, social media, or the association website.

Condo owners also have the right to requisition an association meeting and request items to be put on the board meeting agenda. While condo owners are free to attend board meetings (except for closed sessions), they are not allowed to comment — unless the board president has opened the floor for discussion.

4. The Right to Run and Vote During Elections

Condo owners have the right to run for board positions and vote during the annual board elections. You can vote in person or by proxy, as long as there is authentic authorization. The election process should proceed as outlined in the association’s bylaws. This includes adequate notice prior to the board elections, the date of the elections, quorum requirements, and candidate requirements.

5. The Right to Protest

Condo owners have a right to expect that their board will perform their fiduciary duties to the association. If not, you have the right to remove board members who abuse their authority or are unable to fulfill their duties. Condo owners also have the right to protest rules and regulations that are unfair, discriminatory, or onerous.

6. The Right to Disciplinary Hearings and Arbitration

As a condo owner, you have the right to a disciplinary hearing before a violation fine or punishment is imposed. Condo owners can appeal the violation or explain their situation during the disciplinary hearing. Meanwhile, if a condo owner is in conflict with the board or another owner, he or she also has the right to arbitration or mediation to resolve the dispute.

7. File Legal Action Against the Association

Condo owners have the right to take legal action against the association or other condo owners. They can file for damages or injunctive relief on board members or owners who fail to comply with the governing documents and condo laws.

Legal Rights for Condo Owners: Fighting For Your Rights

Going against your association can be scary, especially since the board has the power to impose fines and other punishments. However, it’s important to fight for your legal rights as a condo owner. If you see that something is not right, speak your mind. In turn, though, condo owners must also fulfill their duties to the association. When both condo owners and board members work together, the entire condo community can live peacefully and harmoniously.

If you want more transparency for your condo association management, feel free to contact the Condo Manager team today! Call us at (800) 626-1267, email us at sales@condomanagerusa.com, or contact us online to learn more about our HOA software solutions.

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Property Management Accounting Basics

admin on December 4, 2017

Finances are one of the most important and difficult aspects of property management. If you are hoping to improve the financial health of your business, it is imperative to know the property management accounting basics to help you create the thriving business that you desire.

Property Management Accounting Fundamentals

What is property accounting? Property accounting is the process of preparing, reviewing, and maintaining the financial records of a rental property, be it residential or commercial. Property management accountants typically perform accounting tasks for rental properties. Though, there are also a number of property management accounting software that you can use to stay on top of your financials.

Whether or not you employ an accountant, use accounting software, or do it yourself, it is essential to understand the basics of property management accounting. In doing so, you can have a better grasp of your overall financial health and avoid expensive miscalculations.

Types of Accounting Methods

How do you do property management accounting? The first step is to choose the basis of accounting you will use. There are three types of accounting methods: Cash Basis, Accrual Basis, and Modified Accrual Basis. Most property owners use either the Cash Basis or the Accrual Basis.

Cash Basis vs Accrual Basis

One of the most difficult decisions is whether to use a cash-based or accrual-based account system. The basic difference between the two is that cash accounting records transactions at the time that money actually changes hands. Accrual-based accounting records transactions at the moment of completion of a service.

Most small businesses use cash accounting due to its simplicity. But, unlike accrual accounting, cash accounting does not give you an accurate look at your financials. Using a cash-based method can lead you to believe that you have more money than you actually do. This is why accrual accounting is considered the best method. It is also the only method that complies with the Generally Accepted Accounting Principles (GAAP).

Of course, you should still consider your own circumstances to find the best system that suits your needs. Additionally, always be sure to reference local laws when choosing.

Setting Up Your Chart of Accounts

A chart of accounts is your master list of all accounts. You use it to classify transactions as well as your assets and liabilities. Accounts are typically classified according to one of five primary types:

Asset. These are items that you own that have value. Assets can be further grouped into Current Assets and Fixed Assets. Current Assets are assets that you can easily and quickly liquidate (in 12 months or less). Inventory and Accounts Receivable are examples of a Current Asset. On the other hand, Fixed Assets are the opposite. They typically have a lifespan of 12 months or longer. Examples of Fixed Assets include Land, Machinery, and Vehicles.
Liabilities. These are your financial obligations. In other words, liabilities are money that you owe. These can be further categorized into Current Liabilities and Long-Term Liabilities. The main difference is that you can pay off Current Liabilities in 12 months or less and Long-Term Liabilities in 12 months or more. Accounts Payable is an example of a Current Liability, while Capital Leases and Long-Term Loans are examples of Long-Term Liabilities.
Equity. This is your financial share of the business. Equity can take the form of cash or assets such as equipment and buildings. Retained Earnings is an example of an Equity account.
Income. Otherwise known as revenue, this is the money that you earn. Examples of Income accounts include Rental Income, Interest Income, and Sales.
Expense. This is the money that you spend on bills. Examples of expenses accounts include Utilities, Maintenance Expense, and Office Supplies.

Single- or Double-Entry Bookkeeping

Property management bookkeeping can fall under one of two kinds: Single-entry or double-entry.

As its name suggests, single-entry bookkeeping records only one entry per transaction. You enter the account title and input either a positive or negative amount, depending on whether you earned or spent money. This type of bookkeeping is only recommended for small businesses with not much activity.

Double-entry bookkeeping, on the other hand, records two entries per transaction — one in the debit column and the other in the credit column. Most property owners use this method of bookkeeping because you can accurately determine your profit or loss and easily catch discrepancies or fraud. Additionally, with double-entry bookkeeping, you can prepare financial statements straight from your books.

Understanding Debits and Credits

A common misconception about debits and credits is that the former is always positive while the latter is always negative. This is not the case. Here is what you should remember when it comes to debits and credits:

Debits
- Raise asset and expense accounts
- Reduce liability and equity accounts
Credits
- Reduce asset and expense accounts
- Raise liability and equity accounts

For example, you charge a tenant, Bob, $1,000 for rent. Under the accrual basis of accounting and using the double-entry bookkeeping method, you would debit Accounts Receivable by $1,000 and credit Rental Income by $1,000. Keep in mind that Bob has yet to pay rent. You have only just charged him. This is why you have increased your Accounts Receivable — because you are expecting to receive money from Bob.

What Is a General Ledger?

A general ledger, known alternatively as a nominal ledger, is where you record transactions. The accounts you input in your general ledger follow your chart of accounts. Your general ledger acts as a master repository for all of your accounting data, financial or non-financial. Major financial statements are obtained from your general ledger.

What Are the Essential Financial Statements?

Although these can vary from organization to organization, there are three fundamental financial statements that you should understand: the Balance Sheet, the Income Statement, and the Cash Flow Statement.

Balance Sheet. This financial statement reports your business’s assets, liabilities, and shareholders’ equity. When preparing your Balance Sheet, it is important to keep the following equation in mind:

Assets = Liabilities + Equity

Income Statement. This financial statement lets you know how much money you earned in a given time period. It deducts your total expenses from your gross revenue to arrive at your net profit or loss. Typically, businesses prepare this statement every month and year.
Cash Flow Statement. This financial statement reports the amount of cash (and cash equivalents) that goes in and out of your business.

You can try to generate these financial statements on your own, but it is better to receive help from an accountant. Alternatively, many property management accounting software come with the ability to generate financial statements in real-time.

Which Property Expenses Are Deductible?

Part of property management accounting procedures is knowing which expenses are deductible. This will allow you to get a good handle on your taxes, though you may still need help from a tax professional. Some of the expenses you can deduct include but are not limited to:

Management fees
Repair costs
Legal fees
Real estate taxes
Mortgage interest
Professional accounting expenses
Tax preparation expenses
Maintenance and cleaning supplies
Insurance

The IRS website also provides small businesses with plenty of information about real estate income and deductions.

Additional Rental Property Accounting Tips

1. Open a Business Account

Separating your personal affairs from your business affairs is paramount to success. Thus, you should open a business checking account for your rental property. In doing so, you can avoid mixing up your own finances with your rental property finances. If you are managing more than one property, it is a good idea to open a separate account for each one. This way, you can track each property’s finances easier.

2. Focus on the Reserve Fund

Thinking ahead is one of the qualities of a successful property manager. Large future projects should always be a consideration while budgeting.

Setting up a reserve fund will prevent you from having to raise resident fees unexpectedly for an unexpected repair, and allows you to save up for expensive repairs and projects both expected and unexpected.

3. Budgeting with a Big Picture View

Successful accounting occurs when you not only look ahead to future expenses but when you also look behind. Looking at past budgets can give you a good sense of the areas that need to be changed on the budget as well as the areas that have been managed well. Always keep the past three years of budgets on hand to reference as you work on the current year.

4. Reconciling With Your Bank Account

Bank reconciliation is important because it is a method of checking and double-checking your finances. Not only does it protect your business in the event of an audit, but it can also help you find bank errors, duplications, or missing items. This is one of the best ways to ensure a perfect report. Although it can seem tedious to some, reconciling your bank account each month only takes a couple of hours and can even be set up to be automated.

5. Research State Laws

When managing property finances, it is extremely important to learn the rules and then abide by them. Whether these laws are primarily on a local or a state level, successful property management accounting requires research of the rules and careful implementation as well.

Property Management Accounting Summary

How do you keep books for a rental property? Start by choosing your preferred accounting method, and then move on to setting up your chart of accounts. From there, you can either go with single-entry bookkeeping or double-entry bookkeeping. For double-entry bookkeeping, record two entries per transaction — one for debit and one for credit — in your general ledger. From your general ledger, you can then prepare your financial statements.

If you need help, you can seek property management accounting services from professionals or invest in accounting software. Condo Manager provides HOA management companies and self-managed communities with comprehensive solutions at an affordable rate. Call us today at (800) 626-1267 or contact us online for a free demo.

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How To Find And Keep Good Rental Tenants

admin on November 21, 2017

There is more to finding rental tenants than simply posting an ad online. If you want to find and keep good tenants, you need to follow a system and understand certain laws.

How to Find Quality Rental Tenants

Rental property owners are always on the lookout for high-quality tenants. Ideally, all renters would be upright citizens with outstanding rental histories and credit scores. Unfortunately, the reality is far from that. Here are some tips on how to find good tenants:

1. Come Up With a Rental Criteria

How do I choose a prospective tenant? The first thing you must do is set the right criteria. When crafting this, make sure to consider everything you are looking for in a tenant. If you don’t know where to start, it’s a good idea to think about what other landlords want in a tenant.

What do most landlords look for in tenants? Typically, landlords want tenants who can afford rent and pay it on time. Tenants should also be amiable and have no attitude problems. You should also take into account certain policies you have.

For instance, if you have a no-pets policy, then your prospective tenant obviously shouldn’t own a pet or is willing not to bring theirs into the property.

2. List Your Property Online

The best way to find tenants for rental property is to post an online listing. In fact, 75 percent of renters begin their search for a new residence online.

There’s just no denying it — you can reach a wider market by marketing your rental property through online avenues.

Of course, there’s also an art to creating an online listing for your rental property. When learning how to list a house for rent, start with a compelling title. This usually includes what potential renters can expect from your property. Include the price, number of beds, number of baths, the type of property, and the location. For example: $1,000/mo – 2 BR / 1 BT Apartment in Woodbury.

Describe the property in a paragraph and use adjectives to make it alluring. Mention any extra features or added amenities such as a pool or a view of the city. Your ad should also set expectations, so make sure to bring up the rental application process and any special policies you have. Remind potential rental tenants that they will need to authorize background checks, credit checks, and the like.

3. Pay Attention at Property Showings

After you find tenants online, you will need to show the property to interested parties either in-person or virtually. This is a good chance to get a feel of the prospective tenant and gauge their behavior. It’s usually not a good sign if your tenant is rude or is late to the appointment (or doesn’t show up altogether).

Property showings also allow you to ask important questions such as:

Why are you moving?
When you do plan to move in?
Do you have pets?
Do you smoke?
Will you be living alone?

Tenant Screening 101: What to Check

The search for the perfect tenant doesn’t stop with a rental application. You should also obtain consent from your prospective tenant to conduct certain checks. If a tenant doesn’t consent, then that should be a red flag because it indicates that the person has something to hide. Make sure to check the following:

Income or Employment Status. You need proof that your prospective renter has the financial ability to pay rent. It’s ideal to find renters with a monthly income at least three times the amount you charge in rent. You can check their income through pay stubs or even call their employer directly to verify the details.
Credit Score. A credit report will allow you to determine the prospective tenant’s credit score. From that, you can surmise their income to debt ratio. You can have this done for a small fee.
Background. A background check will let you know whether a prospective renter has a criminal history.
Rental History. It’s also a good idea to contact the rental tenant’s previous landlords to find out about their past behavior. You can ask whether the tenant paid their rent on time, took care of the rental property, how they behaved, etc.

Know Your Federal and State Laws

As a landlord, you should familiarize yourself with the many laws that affect your dealings. This includes laws on a federal, state, and local level.

Fair Housing Act

This federal act ensures that all landlords treat all tenants fairly. It was written to prevent housing discrimination against certain classes of people. The act states that you can’t discriminate against tenants based on their race or color, national origin, sex, religion, familial status, and/or disability.

Several states also have their own fair housing rules that landlords must follow. For instance, in California, you can’t discriminate against tenants with certain criminal records. It’s important to check the laws in your state to prevent getting into legal trouble.

Landlord-Tenant Law

The landlord-tenant law states the rights and obligations of landlords and tenants. It outlines certain rules about lease agreements and security deposits, too. As a landlord, you should acquaint yourself with the landlord-tenant law so that you don’t accidentally violate the rights of your tenant.

What are the rights of a tenant? Tenants have a right to the following:

Quiet enjoyment of their home
Livable conditions
A lead-free home
A certain level of privacy

Reasons to Deny Tenants

It’s essential to maintain the utmost professionalism when finding and screening tenants. Making decisions based on personal biases or reasons can put you in legal trouble. There are many reasons to deny renting tenants, such as:

Monthly income can’t cover rent and deposits
Incomplete rental application
Doesn’t authorize background, credit, or rental history checks
Fails to provide you with proof of income or employment
Gives you fake references
Has a history of late rent payments
Has a history of damaging rental properties

How to Keep Good Rental Tenants

Quality tenants are hard to find, so when you finally land one, you should do your best to keep them around. Making good tenants renew their lease agreements is much simpler than you might think, though.

How do I keep my tenants happy?

Take Care of the Property. What do tenants want in a rental property? They want a clean space with nice amenities and working utilities. Taking care of your rental property is one way to ensure your tenants stay satisfied.
Treat Tenants Equally and Fairly. How do you treat tenants? It’s important to treat all tenants equally, showing no favoritism or disdain for select tenants. You should also treat them fairly and without personal bias.
Cultivate a Relationship Based on Respect. Respect is a vital ingredient in any healthy relationship, including one between landlords and tenants. When you respect your tenant (and they respect you), they’re more likely to keep renewing their lease.
Respond. A responsive landlord is something a lot of renters look for. Make yourself reasonably available to your tenants for any concerns they may have. Consider having a dedicated line for emergencies, too.
Offer Renewal Incentives. Everyone loves discounts and freebies. Think about providing your tenants with a discounted month if they choose to renew with you for another term.

The Role of HOAs and COAs

Many HOAs and COAs restrict owners from renting out their property. Association members might think this is infringing on their rights. But, provided the HOA or COA board is acting within the law and its power, it can absolutely restrict rentals.

Some HOAs and COAs may allow rentals, but they typically have rules and regulations to keep them in check. Both HOAs and COAs, though, must also follow federal and state housing laws. That means an association can’t specify the type of tenant property owners can and can’t rent to. Fair Housing laws still apply.

It Pays Off

Finding quality rental tenants takes work, but it’s definitely worth the time and effort. When you leave the process up to chance, you can get stuck with a bad tenant who never pays rent on time, causes damage to your rental property, and disrupts the neighborhood.

Managing a property or HOA community can be difficult without the right tools. Contact Condo Manager today for expert solutions designed for HOA management companies and self-managed HOAs. Call us at (800) 626-1267 or reach out to us online for a free demo.

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8 Things An Association Management Software Can Help Your HOA With

admin on November 6, 2017

Association management software is a valuable tool for any HOA community. It streamlines day-to-day operations and makes many tasks a breeze.

What Is AMS? Association Management Software Explained

As part of the leadership of an HOA community, it can sometimes be difficult to decide which investments are worth your time and the residents’ money. One of the investments you should look into, though, is purchasing or subscribing to an association management system.

What does AMS mean? AMS, which is short for association management software, is a program that easily and effectively organizes a wide variety of information relating to your association. This type of software combines the management of finances, resident payments, event planning, and many other useful tools to efficiently run your community.

Benefits of Association Management Solutions

Community association management software can be wonderfully freeing. Because it can take care of many tedious tasks, association leaders can focus more time on building a great community. An AMS system can also save your association money in the long run.

When administrative tasks are delegated to a system, your association’s productivity will also increase exponentially. Along with this increased productivity comes the inevitability of fewer funds spent on these tasks.

To top it all off, investing in AMS software is also eco-friendly. Transferring many of the daily tasks from paper to a digital platform can minimize the carbon footprint of your community. Many things that would normally use paper and ink, such as announcements and events calendars, can all be posted online.

Here are things the best association management software can help your HOA with:

1. Accounting

Accounting is perhaps one of the most challenging aspects of managing a community. It takes an accountant, or at least someone with sufficient accounting knowledge, to handle the intricacies of accounting and bookkeeping. With an AMS system, though, the task is made simpler.

An AMS can provide general ledger accounting, making it easy for you to balance your books. It can also juggle both your association’s receivables and payables, allowing you to stay on top of your financials.

Many systems even provide integrated bank reconciliation with a database for unlimited bank accounts, the ability to add bank fees and interests, and the ability to view updates in real-time. Say goodbye to manual journalizing and confusing spreadsheets — association management software is here.

2. Financial and Business Reporting

Because not everyone is a professional accountant, it can be immensely helpful to have financial reports drawn up quickly and in a way that is simple and readable for everyone on the board.

Most HOA software strives to make financial reports as self-explanatory and clear as possible with the benefit of including everyone in financial discussions and minimizing misunderstandings. Many systems also offer analytics and business intelligence that can help you make smart decisions.

3. Invoicing and Payment

Every HOA community relies on dues to survive. Unfortunately, sending invoices and collecting dues isn’t the easiest of tasks when done manually.

With an association management system, though, you can effortlessly manage billing and collection. Send invoices to members when fees become due. Many systems also allow members to pay their dues online without hassle. There are also systems that let you pro-rate dues if that ever becomes necessary.

4. Online Member Portal

Online member portals allow your association to be accessible all the time. With such a portal, members can log into their individual accounts and access information you make available to them. They can update their profiles, download copies of the HOA’s governing documents, and view the events calendar, too. Integrated systems can also make it easy for members to pay fees right from their accounts.

5. Member Communication

Communication is paramount in any given HOA community. You need to be able to talk to residents and disseminate critical information in a timely manner. With an AMS system, you can post announcements or updates, distribute e-newsletters, and also send notices such as violation notices and collection letters.

Some systems even have online reservation capabilities. This is particularly helpful if you need to control the number of people in a shared space at a given time. With this reservation system, you can eliminate redundancies in scheduling and make it easy for residents to save a spot.

6. Work Order Automation

Service requests are always a bother to manage, especially if you still do it the manual way. Some requests get lost in the shuffle, while others fail to even make their way to you. Automating your work orders with the help of association management software is a good solution to these problems.

Through the online member portal, residents can submit work orders or service requests. They can fill out the necessary fields and even attach photos as supporting documents.

Work order automation also benefits HOA board members or managers. You can track work orders in real-time, organize them according to priority or date, and even schedule repairs all from one neat place. Moreover, once a member’s request has been approved, you can send notice via the system, too.

7. Committee Management

Many HOA communities have committees that help the board with various tasks, from Architectural Review Committees to Events Committees. With the help of an AMS system, you can manage committees and sub-committees easily. Many programs also offer the ability for committees to interact and communicate. Other features usually include the recording of minutes and notes at committee meetings.

8. Event Management

If you need a comprehensive event management system, many association management systems come equipped with this feature.

You can organize one-day or multi-day events and communicate its details with members. Through the software, members can also register attendance and make payments. You can even plan every little detail right down to catering, audio/visual requirements, and room assignments (if necessary).

Association Management Software vs HOA Management Software

There might be some confusion regarding the difference between an AMS and an HOA management software. An association management software is broader and typically addresses the needs of a professional or trade association. On the other hand, HOA management software is software specifically designed to cater to HOA and COA communities.

Of course, that isn’t to say that AMS software can’t be used by homeowners associations. The features of both these programs usually overlap, which means HOAs can use either one. Though, since HOA software caters to HOA communities specifically, it normally has features that are friendlier to HOAs.

As for association management software vs property management software, the latter is used for managing real estate properties of both the residential and commercial variety. It also typically involves managing rent, tenants, and property maintenance.

An All-Around Management Tool

Association management software can be one of the best investments that you make for the community. Taking into account the amount of money it can help you save in many different areas, the program will pay for itself quite quickly. It can enhance the quality of the board, make you more efficient, and provide an easier way for residents to complete tasks online.

Condo Manager offers integrated association management solutions to self-managed communities and HOA management companies. Call us at (800) 626-1267 to learn more or schedule a free demo with us today.

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