What is accrual basis example?

For example, if your association has unpaid invoices to a vendor which you have yet to pay for, under the accrual accounting principle, you would record it under ‘Accounts Payable.’ The same goes for any debts owed to the association but have yet to be settled. Knowing that you have receivables or payable will give you a better idea of your financial condition. Using the cash accounting method, though, you might spend money without knowing that you have payables to take care of.

What are the benefits of HOA software for vendor management?

Vendor management for HOAs becomes simpler and easier with the help of software. HOA software allows you to build a comprehensive database of vendors, streamline communications with vendors, keep track of invoices and payments for vendors, simplify work orders, and record and deliver feedback on vendor services.

What are HOA financial reporting mistakes to avoid?

To major financial consequences, board members should avoid underreporting the budget, overreporting expenses, failing to itemize the budget, and not filing tax returns.

What are ways to avoid HOA financial reporting mistakes?

In order to avoid HOA financial reporting mistakes, board members must pursue education to learn the basics of financial management, seek the expertise of professionals such as an HOA manager or accountant, and to utilize resources such as HOA software which can lessen mistakes due to human error.

Can an HOA file a suit against the developer?

An HOA lawsuit against a developer is probably not the most appealing choice, but it is sometimes necessary. Consider bringing an injunction pre-transition, though you may need to pay for this yourself. You can also file a suit post-transition on the grounds that the developer-controlled board failed to fulfill its duties.

What should homeowners do before an HOA turnover?

Typically, homeowners can express their concerns and oversee the turnover in the form of a transition committee. This transition committee should take the following actions: Review the financials of the HOA, perform an audit (not mandatory but recommended), inspect the reserves, stay on top of HOA insurance, and assess your need for an HOA management company.

How does Condo Manager software improve HOA communications?

Condo Manager is an all-in-one HOA software that features a comprehensive database, detailed communication logs, streamlined communications, convenient reminders and to-do items, and mobile compatibility. These HOA communication tools will help improve the communication process of your community for better and more efficient operations.

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.

admin, Author at HOA Management Software

HOA Accrual Accounting: Why It’s The Best For HOAs

admin on May 16, 2019

Homeowners association accounting is a critical part of managing any HOA community. The key to successful accounting, though, starts at the beginning — choosing your accounting method. Among the three possible options, HOA accrual accounting remains unsurpassed.

What Is HOA Accrual Accounting?

The accrual basis of accounting dictates that you should record revenues and expenses as these transactions occur. It does not take into account when you actually receive payment or disburse cash.

When using accrual accounting for HOAs, you record all of the association’s financial activities on the HOA financial statements. Because of the timing of reporting revenues and expenses, account titles such as “Assessments Receivable” and “Accounts Payable” appear on the Balance Sheet. This gives you a better understanding of your association’s current financial standing.

HOA accrual accounting is inherently more complicated. Therefore, many find it more difficult to comprehend and execute. Regardless, it remains one of the HOA accounting best practices. It is widely used among homeowners and condo associations since it provides you with a more accurate view of your finances. Additionally, this HOA accounting method is the only one that conforms with the Generally Accepted Accounting Principles (GAAP).

HOA Accrual Accounting vs Cash and Modified Accrual Accounting

There are three accounting methods available to homeowners and condo associations: Accrual accounting, cash accounting, and modified accrual accounting. Typically, though, associations choose from one of the first two identified.

But, how does HOA accrual accounting differ from the other two methods anyway?

Cash accounting dictates that you should record all revenues and expenses as money moves. It primarily relies on the timing of the cash exchange. In this case, you would only record a revenue or expense account when you have either received (revenue) or paid (expense) money for it. Because of the timing of the cash method, account titles such as “Assessments Receivable” or “Accounts Payable” do not appear on homeowners association financial statements such as the Balance Sheet.

The final method, modified accrual accounting, is simply a combination of the other two methods. Using a modified basis, revenues are recorded when they are earned as opposed to when money is received. It follows the accrual principle. Expenses, on the other hand, are recorded when you disburse money regardless of when you incurred it. It follows the cash principle.

The Best Accounting Method for HOA

Given that there are three accounting methods that associations can choose from, you may wonder why most people favor the accrual basis of accounting.

Simply put, accrual accounting remains the best HOA accounting method because it paints a more accurate picture of your association’s finances.

For example, if your association has unpaid invoices to a vendor that you have yet to pay for, under the accrual accounting principle, you would record it under “Accounts Payable.” The same goes for any debts owed to the association but has yet to be settled.

Knowing that you have receivables or payable will give you a better idea of your financial condition. Using the cash accounting method, though, you might spend money without knowing that you have payables to take care of.

While modified accrual accounting does give you a clearer view of your revenues, it does not do the same for your expenses. HOA accrual accounting is simply superior because it helps you financially plan and budget for the future as well as allows you to make informed decisions.

Understanding the Pitfalls of Cash Accounting for HOAs

When your association uses cash accounting, it fails to report any receivables or payables. That means you have no way of knowing about any money coming in or any expenses you expect to pay — at least, not with a simple look at your financial records. This opens you up to the possibility of operating under a misapprehension regarding your finances.

Because receivables and payables do not appear on financial statements, you might think that your association has more cash than it actually does. Your cash account might reflect solvency, but you would not know for sure because you do not record payables. With the cash accounting method, you will find it hard to keep track of the money you owe and money owed to you. Thus, when unexpected expenses arise, you might end up spending money you actually do not have.

You can prepare reports to track your payables and receivables if you wish. But, you have no way of determining their accuracy because you cannot cross-reference them with your Balance Sheet or General Ledger.

Granted, the cash accounting method is the easiest to understand and execute, which is why some associations prefer it. But, it is best reserved for cash-based businesses and handling your personal finances. For an organization like an HOA, use accrual accounting.

The Role of the Law and Your Governing Documents

It is equally important to check state laws to see which accounting method you should ultimately use. Some states are more specific when it comes to HOA accounting, while others have no such laws. California, for instance, requires the use of the accrual basis of accounting when preparing a pro forma operating budget.

Your governing documents may also have a say in the decision. Some associations have it in their CC&Rs or bylaws that a certain method of accounting should be used when recording and preparing financial statements. Though, since HOA accrual accounting is the best, consider amending your governing documents if it asks you to use a different method. Check with your HOA attorney to see how you can amend your governing documents.

A Helping Hand

Accounting is a difficult subject that requires some background knowledge in order to execute properly. Understanding the idea behind HOA accrual accounting is just the tip of the iceberg. This is why many associations choose to seek the help of an accountant or invest in HOA accounting software.

Condo Manager USA provides software solutions for self-managed associations and HOA management companies. Our HOA and condo management software comes with a comprehensive accounting system that uses the accrual method of accounting. Schedule a free demo, call us at (800) 626-1267, or contact us online for more information.

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What You Need to Know About Form 1120-H

admin on April 18, 2019

Are HOAs required to file tax returns? Even though they are non-profit organizations, all HOAs must still file their income tax return each year. To better understand the requirement, here’s everything you need to know about the homeowners association tax form, also known as Form 1120-H for HOAs.

What Is Form 1120-H for HOAs?

Initially, HOAs had to file Form 1120, which is the corporate income tax return. Form 1120 is more complicated and does not exempt the payment of tax on dues and assessments. However, after the Tax Reform Act of 1976 was passed, HOAs were no longer required to file Form 1120. Instead, they would file for Form 1120-H.

Form 1120-H is the income tax return for homeowners associations. Compared to Form 1120, this form allows for a more simplified HOA tax filing process. It also allows HOAs to enjoy certain tax benefits that are outlined in Section 528 of the Internal Revenue Code. One of the main benefits is that HOAs can exclude membership dues, fees, and assessments (also known as exempt function income) from their gross income.

For the Internal Revenue Service (IRS), a homeowners association can be a:

condominium association
homeowners association
timeshare association

There are five requirements to qualify as an HOA:

At least 60% of gross income should be exempt function income
At least 90% of annual expenses should be for the association’s business
No private shareholder or individual should benefit from the association’s earnings
At least 85% of housing units should be residential
The association must file Form 1120-H to enjoy Section 528 benefits

If your HOA does not meet the above conditions or fails to file Form 1120-H, it will be required to file Form 1120 and thus, will be subjected to the regular corporate tax rates.

Important Terms for the HOA Tax Form 1120-H

Filling up Form 1120-H for the first time can be quite confusing. If you’re looking for Form 1120-H instructions, here’s a brief explanation of the different terms you’ll encounter.

Exempt Function Income: This refers to dues, fees, or assessments paid by members of the HOA. The exempt function income is deducted from the gross income when calculating taxable income.
Non-Exempt Function Income: This refers to income earned from non-members of the HOA, payments from association members for the specific use of facilities that are not open to all members, income from work performed outside the HOA’s property, and interest on reserve account earnings.
Expenses: Form 1120-H examples for expenses would be repairs, maintenance fees, legal fees, management fees, insurance premiums, and property taxes.
Dividends and Interest: HOAs that put their reserves in a money market account will generate taxable interest income while reserves invested in money-making stocks will generate taxable dividend income.
Deductions: This refers to expenses incurred when generating non-exempt function income. Examples include production costs, advertising fees, and rent from subleasing HOA property. Associations are also entitled to a standard $100 deduction.
Tax Rate: The IRS has a 30% flat tax rate for HOAs and COAs. For timeshare associations, the tax rate is 32%.

Frequently Asked Questions About Tax Form 1120-H for HOAs

For a more comprehensive understanding of the IRS Form 1120-H, here are the answers to the most common questions:

Who Must File Form 1120 H?

All HOAs must file their tax returns. Form 1120-H is typically handled by the HOA board treasurer. However, preparing and filing the tax return for HOAs can be complicated if your treasurer does not have adequate experience. It’s recommended to consult your HOA’s CPA, attorney, or management company to ensure that Form 1120-H is properly filled up.

Does an HOA Need a Tax ID?

Since HOAs are required to pay taxes, they are assigned a federal tax ID number. On the Form 1120-H for HOAs, the tax ID is written in the Employer Identification Number box

Can Form 1120 H Be Filed Electronically?

You cannot create an e-file for Form 1120-H for HOAs. Electronic filing is currently not supported by the Modernized e-File (MeF) program of the IRS. Form 1120-H must be filed on paper.

When Are HOA Tax Returns Due?

Form 1120-H must be submitted on the 15th day of the 4th month following the end of the association’s fiscal year. However, if your fiscal year ends on June 30, Form 1120-H must be submitted by the 15th day of the 3rd month following the end of the fiscal year (September).

If the Form 1120-H due date falls on a weekend or holiday, the tax return for HOAs should be submitted on the next business day.

What Happens If HOA Does Not File Taxes?

If your HOA fails to submit Form 1120-H, it will be forced to file for Form 1120 — which does not have the same deductions.

If your HOA does not file its tax returns, the IRS will impose several penalties. The failure to file penalty is 5% every month, with a maximum penalty of 25%.

Meanwhile, the failure to pay penalty is 0.05% of the unpaid tax liability per month. It won’t exceed 25% Your unpaid balance will accrue interest from the due date up until you can pay the balance in full.

Importance of Filing Form 1120-H for Homeowners Associations

Filling up Form 1120-H requires a lot of planning and preparation. Gathering receipts, invoices, and other relevant documents takes time, especially if you are keeping a manual filing system. You also need to pay attention to every detail to avoid inaccuracies, as these will attract hefty fines from the IRS. Overseeing your HOA’s Form 1120-H is a major responsibility. If you need assistance, do not hesitate to reach out to professionals with established tax experience.

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7 Reasons Why You Should Use A Property Management Accounting Software

admin on April 11, 2019

Investing in a rental property is a great way to earn passive income. But what you’ve likely learned by now is that managing a property is not passive at all. The financial responsibilities alone can take up most of your time. If you’re looking for a cost-effective solution, consider investing in property management accounting software.

What Is Property Management Accounting Software?

Property management software is a computer program designed to assist landlords or property managers with their day-to-day activities. There are plenty of options in the market today, so the best property management software is one that meets your specific needs.

For instance, if financials are your weak spot, you can choose accounting software for property managers. However, if you need a full suite of management services, there are also more comprehensive programs available. Some essential software features include financial reporting, invoicing, online payment processing, maintenance management, and violation tracking.

If cost is a major consideration, there are also custom property management software options. You won’t have to spend on features and functionalities that you don’t need. Landlords and property managers can easily select the features they need help with.

Why Should You Use a Property Management Accounting Software?

Property management software can help you become a more efficient and productive landlord. If you need further convincing, here are seven reasons why it’s a worthwhile investment.

1. Save Money in the Long Run

Property management accounting software is no longer as expensive as before. Advancements in technology have made these programs accessible at lower price points. Even though there is still an upfront payment, you will save money in the long run.

For instance, accounting software can help you with day-to-day tasks that used to take hours to accomplish. You will just need to input the numbers and the computer program will organize all the transactions. Since accounting tasks are more manageable, you won’t have to hire a bookkeeper for simple data entry tasks.

2. Reduce Accounting Errors

Property management software automates accounting and bookkeeping tasks, which means you can avoid accounting errors. Even unintentional mistakes can have costly consequences on your finances. With accounting software, landlords and property managers can be more confident with their financial records. Time saved on other financial tasks can also be spent reviewing your numbers and spotting inconsistencies.

3. Advanced Financial Reporting Capabilities

Property management accounting software comes with advanced reporting capabilities. Thus, landlords can generate monthly or quarterly financial reports for their rental properties.

These reports are also easy to understand even if you don’t have a financial background. You won’t have to wait for your annual or biannual appointment with your CPA to make sense of your financials. Landlords can use these reports to keep track of their finances and make better decisions for their rental properties.

4. Accessible from Anywhere, Anytime

Choose a property management accounting software with cloud-based storage so that you can access your financials from anywhere and at any time. Mobile compatibility also enables you to see your financials from a desktop computer, tablet, and smartphone.

Many landlords are hesitant to switch to online property management software because the data might get corrupted or lost. With cloud storage, though, you can have peace of mind knowing that your financial records are safe and secure. Data backup and recovery have been simplified as well so you don’t need to call a technician to access your date from another device.

5. Increased Software Security

Property management accounting software comes with security features so you won’t have to worry about confidential or sensitive data being stolen or leaked.

Make sure that your chosen accounting software offers multiple layers of security such as encryption and authentication safeguards, as well as regular software updates.

6. Easy to Scale

Scalability is another top reason for using property management accounting software. The computer program can easily adapt if the landlord needs more storage or provides access to their property manager or accountant.

Even as you expand your portfolio, you can still use the software to manage the financials of your different rental properties. As your property management team grows, the software can also help increase efficiency and reduce redundancies.

7. More Than Just Accounting

Just like landlords or property managers who have a wide range of responsibilities, property management software can be used for more than just rental property accounting. These computer programs have other desirable features that can make your day-to-day tasks more manageable. For instance, with invoicing and payment processing capabilities, you won’t have to physically collect rent from your tenants. You can send invoices electronically while tenants can settle their accounts online as well.

The Best Property Management Accounting Software for Your Needs

Those who are not ready to invest can choose free property management software — though the functionalities may be limited compared to paid versions. However, if you think you’ve found the best property management accounting software for your needs, most options will offer a free trial. By now, though, you have a better understanding of property management accounting software and how they can make your job as a landlord more convenient. With the software, you can really enjoy your passive income and spend more time with family and friends.

Looking for property management software for landlords? 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 property management solutions.

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HOA Vendor Management: Keep Track Of Your Vendors With Ease

admin on March 29, 2019

Great, reliable service from vendors can be hard to find so when you do, it’s important to nurture the business relationship. However, with so many things going in, board members can easily lose track of homeowners association payments, vendor contracts, and other important documentation. If you want your vendors to deliver a high level of service, homeowners association vendor management is a must.

What Is HOA Vendor Management?

HOA vendor management is the process of developing, managing, and controlling vendor activities and performance. The overall goal is to establish a strong relationship that will drive a vendor to deliver excellent service throughout the contract period. Through vendor management, HOAs can reduce the risks and get the most value out of the business relationship.

Vendor management seems like a simple process but when the association is dealing with more than a handful of vendors, it can become complicated. Each vendor will have its own contract, work orders, pricing, payment schedules, communication line. Without an organized document management system, an HOA is more likely to miss payments, lose contracts, and have misunderstandings — all of which can deteriorate the HOA-vendor relationship.

If you are having a hard time keeping track of vendors, it might be time to consider a digital solution. Investing in HOA software can help you manage vendors effectively and efficiently so that there are no service failures and service disruptions in your community.

Benefits of Using HOA Software for Vendor Management

Vendor management for HOAs becomes simpler and easier with the help of software. Here are some of the benefits you can expect.

1. A Comprehensive Database of Vendors

Searching for a new vendor is quite tedious. You need to find potential companies online, perform enough research to narrow down the choices, request for bid proposals, and then negotiate the terms of the contract. After all that, you’ll end up choosing only one.

Rather than have valuable vendor information get lost in your file cabinets or end up in the trash, HOA software enables you to store all the information electronically. They won’t take up space and clutter your office space. And when the time comes when you need a new vendor, you can quickly search your database for their contact information.

You can even view vendors based on their quoted prices to narrow your choices. No need to go through the grueling search process all over again. Just call up the vendor and request an updated proposal. Thus, HOA software can save you a lot of time and effort.

HOA software can also store vendor contracts. You can easily research and refer to a contract when talking to a vendor and potentially renewing the business relationship. If there are issues with their services, you can also quickly bring up the terms of the vendor contract.

2. Streamlined Communications

Vendor management can become confusing if both parties are dealing with different people every time. Communication lines get crossed, resulting in miscommunications or even disagreements.

It’s also a waste of time to be constantly repeating or relaying information. HOA software can help prevent communication breakdowns.

By limiting communication to a single channel, HOAs can easily keep track of messages exchanged with a specific vendor. If you need clarification, you can first read through previous responses before inquiring with the vendor. If there are relevant updates with the community, the association can also use the HOA software to send messages to its entire list of vendors.

3. Keep Track of Invoices and Payments

HOA software can help you keep track of invoices and payments. The program allows you to process invoices, issue payments, and print out checks. You can even print out one check for multiple invoices to be more efficient. Not only that, but the HOA can also save on paper, ink, and other office supplies.

When it comes to payments, HOA software can help you monitor payment schedules so that each vendor is paid on time — despite having different payment schedules. You can also set up recurring payments for your vendors so that you don’t have to process them each time.

4. Simplified Work Orders

HOA software simplifies work orders for easier vendor management. The program keeps all previous work orders so you can simply duplicate and adjust them when generating future work orders. It’s also easy to refer to previous work orders when there are issues or clarifications from either party. Since HOAs may be dealing with work orders from different vendors at any given time, the software will make everything organized and manageable.

5. Record and Deliver Feedback on Services

HOA software can also keep a record of your comments and feedback regarding a specific vendor. You can also take note of the goals and objectives for your relationship with vendors.

If you want to convey points for improvement to your vendors, you can send them via software’s HOA communication tools. Thus, there is a record of all correspondences should there be any dispute or disagreement. Conversely, you can also send positive feedback to your vendors for HOA vendor relationship management.

HOA Vendor Management Tips for Better Relationships

Apart from utilizing software, there are also many other ways to strengthen your relationship with vendors. Here are some helpful HOA vendor management tips to keep in mind.

Communicate to Vendors Clearly and Openly: Right from the start, make sure that communication lines are always open between the HOA and your vendors. Make sure to clearly state your goals and objectives so that vendors can adjust their services accordingly. If there are changes that affect the services they provide, make sure that your vendors are informed as soon as possible.
Maintain Reasonable Expectations: All HOAs will want excellent service from their vendors. However, it’s unfair to hold your vendors to unrealistic demands. Your expectations should be reasonable based on the vendor’s capabilities and pricing. Do not ask for things that are already outside the scope of services outlined in the contract.
Address Issues Promptly: If there are things you do not like regarding your vendor or their services, address them as soon as possible. If not, the vendor will not have the chance to correct these issues. It will be hard to build a good relationship with your vendor if there are lingering or unresolved issues.

HOA Vendor Management for Long-Lasting Business Relationships

Vendors deliver essential services that allow an HOA to run smoothly and efficiently. If you want to develop long-lasting business relationships, consider investing in HOA vendor management software. It’ll be easier to juggle the many schedules, financial obligations, and work orders of your vendors. As vendors see your effort in maintaining the relationship, they will also be encouraged to deliver better service. They may even offer better deals when it’s time to renew the contract.

If you’re on the lookout for HOA vendor management software, 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 more about our HOA software solutions.

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4 HOA Financial Reporting Mistakes To Look Out For

admin on March 1, 2019

Do you have problems with homeowners association financial reporting? Even with a financially literate board, mistakes can still happen. What’s important is that you’re able to identify these HOA financial reporting mistakes early on and make changes so that they never happen again. If you want to protect the financial position of your HOA, here’s what you should look out for.

HOA Financial Reporting Mistakes You Must Avoid

Accurate financial reporting is essential to the successful operations of an HOA. Financial statements reflect the financial health of your community. These documents let homeowners know that the HOA board is putting their money to good use. With accurate financial reports, you can also attract potential homebuyers to join your community.

But what happens when there are problems with homeowners association financial reporting? The board loses the confidence of the homeowners and the community fails to attract new members. Not only that, but financial reporting issues can also lead to higher insurance premiums and difficulty getting loans — should the need for one arise.

If you don’t want to experience these pitfalls, here are four HOA financial reporting mistakes to avoid.

1. Underreporting Budget

The HOA budget should be realistic and cover all the anticipated expenses for the coming year. The board should also cushion the budget for inflation, overspending, bad debts, vendor rate adjustments, and emergency expenses. If the anticipated income is not enough to cover all these expenditures, HOA fees must be increased. However, since these fee increases do not go over well with homeowners, some board members might decide to underreport their annual budget.

Underreporting the budget is a major financial reporting mistake that HOAs should avoid. As a board member, it is your fiduciary duty to act in the best interests of the association. That means ensuring that financial reports, including budgets, are accurate. Remember, is not your responsibility to appease homeowners with low assessment fees.

2. Overreporting Expenses

Overreporting expenses is one of the HOA financial reporting problems to look out for. Mistakes in your HOA financial statements might simply be due to human error but it can also be a sign of fraud or embezzlement.

Board members must carefully inspect their financial statements. For instance, is the HOA suddenly issuing payments to vendors that don’t exist or paying for excessive repairs and amenity upgrades? You can also check if checks are being issued to individuals.

Many HOAs only discover cases of fraud or embezzlement when it’s already too late. Thus, to protect HOA funds, board members must know how to read HOA financial statements so that they can identify discrepancies or mistakes — no matter how minute they may be.

3. Failure to Itemize

The HOA budget must be as detailed as possible to have an accurate picture of the upcoming year’s financial obligations. Accordingly, creating an annual budget requires a lot of time and effort. If your board is untrained or lacks attention to detail, you might end up with a budget that is not properly itemized.

For instance, instead of listing down roof maintenance, plumbing, electrical, and landscaping as separate expenses, the budget just has a maintenance category. This financial reporting mistake can result in overspending.

Without establishing specific budgets, the HOA may spend more for roof maintenance and leave less for the other maintenance projects. Thus, there is a chance that essential maintenance tasks cannot be accomplished. The board may also end up depleting funds, which can put HOA financials in a precarious situation.

4. Not Filing Tax Returns

Apart from the homeowners, HOAs must also report to the Internal Revenue Service (IRS). Some HOAs fail to file their Form 1120-H on time while others may not even know that they have to file taxes. Failure to file tax returns is a financial reporting mistake you should avoid. Otherwise, you might end up in trouble with the IRS.

Failure to file and pay taxes comes with penalties with interest. The IRS may also strip your HOA of its tax-exempt status. To avoid these costly consequences, make sure to file your HOA tax returns on the due date.

3 Solutions to Avoid HOA Financial Reporting Mistakes

Regardless if they were intentional or not, HOA financial reporting mistakes can have major consequences. Here are three solutions that can protect your association from the abovementioned financial missteps.

1. Pursue Board Member Education

Financial literacy is not a requirement for board members. However, once elected to the board, you must show initiative by pursuing HOA board member education. Newly elected members will have the opportunity to learn the basics of financial management. They do not need to be financial experts but at the very least, they should know how to read and interpret financial reports.

2. Seek the Expertise of Professionals

If financial management is not the forte of the board, considering consulting or hiring professionals.

HOA management companies and accountants have experience with financial management tasks so they can provide the guidance that your board needs. These professionals can also serve as checks and balances to prevent fraudulent activities within the HOA.

3. Utilize HOA Resources

Board members should not use the lack of financial background as an excuse for financial reporting mistakes. In this day and age, there are so many resources you can use to manage HOA finances.

For instance, HOA software can automate day-to-day financial tasks so that there are fewer accounting mistakes and errors. These programs can also analyze your data and produce financial reports. As long as the numbers are inputted correctly, HOAs can be confident that the generated financial reports are accurate and detailed.

Overcoming HOA Financial Reporting Mistakes for a Better Future

By now, board members have a better understanding of HOA financial reporting mistakes and solutions that can help them avoid these pitfalls. Through proper financial management, you can ensure that your community operates smoothly and that homeowners can see the results of investing their hard-earned money.

Looking for software that can help you avoid HOA financial reporting pitfalls? 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 request a demo or to learn more about our HOA software solutions.

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HOA Turnover: Tips For Ensuring A Smooth Transition

admin on January 29, 2019

The control of every development must eventually transfer from the developer to the members of the homeowners association. But, the HOA turnover process is not always easy and trouble-free.

What Is an HOA Turnover? And Why Is It Necessary?

An HOA turnover, also known as a community turnover, is exactly as it sounds. It is the process of turning over control of the homeowners association from the developer to the homeowners.

The HOA transition from developer to owner is important because it marks a change in the structure of the community. Once control transfers, owners will then be responsible for maintaining the community instead of the developer. Owners must then elect a set of HOA board members, who must then ensure the continuous operation of the community.

Both the developer and homeowners will, of course, want a fast and easy transition. But, you may run into minor hitches here and there when your interests as a homeowner do not line up with the developer’s interests. After all, developers are mainly interested in making a profit. They want to establish a community, sell houses, and then start on their next project.

Even though both parties want the quickest route to the end result, it is imperative to ensure that the HOA turnover process goes as smoothly as possible. That means going over everything — financials, plans, insurance policies, and the like.

Understanding the Developer Turnover Process

There are three stages to the process of developer turnover to HOA: Pre-transition or pre-turnover, the HOA turnover meeting, and post-transition or post-turnover. Learn more about each stage below.

1. Pre-Transition

When an HOA is still under the control of the developer, the HOA board usually consists of developer representatives. It might appoint a couple of homeowners to serve on the board as well, though this does not happen all the time. Typically, homeowners can express their concerns and oversee the turnover in the form of a transition committee. This transition committee should take the following actions:

Review the Financials

The only way to know that the association is in good financial standing is to review its financial records. This includes financial statements, bank statements, tax returns, budgets, and vendor contracts.

You want to make sure that everything checks out and that there are no suspicious transactions. If you spot anything questionable, ask the developer to clarify.

Perform an Audit

For a more comprehensive study of the HOA’s financials, it is a good idea to hire a Certified Public Accountant (CPA) to perform an audit or something similar. This will cost money, though it is necessary if the association’s financial condition is not up to par.

Inspect the Reserves

The HOA reserve fund consists of cash savings, contributed by homeowners, for the purpose of major replacements and repairs as well as emergencies. Make sure the developer has created a reserve fund account in the association’s name and that it meets the right reserve level. You may need to perform a reserve study to do this.

Stay on Top of Your Insurance

Insurance is paramount to any working organization, homeowners, and condo associations included. Make sure to secure the association’s insurance policies and that you have sufficient coverage. Consult with an insurance expert to determine what your HOA lacks.

Assess Your Need for HOA Management

HOA board members may not always have the time, skills, or resources to carry out their day-to-day tasks. An HOA management company can step in to shoulder some of the burdens. Evaluate your needs to see if you need an HOA manager. If you do, it is best to go with a credible and professional company.

2. HOA Turnover Meeting

The official transition of the HOA from the developer to the homeowners takes place during the turnover meeting. During this time, the developer will deliver all pertinent documents to the homeowners (see HOA transition checklist below) and the homeowners will elect its new board.

The laws surrounding turnovers can vary from state to state. Some state laws mandate that a turnover meeting must transpire within a certain timeframe. In Florida, for instance, developers must hand over control of the HOA to the owners 90 days after 90 percent of all units have been transferred to their buyers. This is the most common trigger for an HOA turnover.

Other triggers can include bankruptcy, the appointment of a state court receiver, developer receivership, or if 7 years have passed since a condo’s declaration was recorded. To know what can trigger an HOA turnover in your state, check your state laws.

3. Post-Turnover

After the official turnover takes place, the developer or its representative should still be present at HOA board meetings for the next 90 days. This will allow for a smoother and more efficient transition.

Following that, the elected HOA board members can then continue to run the community according to the governing documents.

HOA Turnover Checklist

During the HOA turnover meeting, the developer must hand over the following items to the association:

A copy of the recorded governing documents as well as any amendments and supplements
A copy of the articles of incorporation
Association records such as meeting minutes
All generated rules and regulations
Director resignation letters as a result of the end of the developer’s control
All association financial reports and statements:
- Balance Sheets
- Income Statements
- Balance of association funds
- Control over association funds, including bank accounts and signature cards
- All personal property of the association as well as inventory

If known or available, the developer must also deliver the following items to the association at the HOA transition meeting:

List of owners, addresses, and telephone numbers
As-built architectural, structural, engineering, mechanical, electrical, and plumbing plans
Original specifications specifying all material changes
Underground site services plans
Site grading plans
Drainage plans
Landscaping plans
Insurance policies
Issued occupancy permits
List of contractors included in the development and construction of common elements
Lease agreements to which the association is a party
Contracts (service, employment, etc.) to which the association is a party
Any other information related to association property maintenance and repairs

Taking Action in a Developer Controlled HOA

During the pre-transition phase, the developer still holds control over the HOA. Good developers listen to their homeowners and take care of the community. But, if you happen to have a bad developer, problems can arise.

Although a developer-populated HOA board has the same duties and responsibilities to fulfill as any other HOA board, some developers fail to uphold them. The bad news is that, in most states, developers have power in the pre-transition phase. That does not mean you have no options, though. Here are some things you can do to force developers to change their ways:

Assemble an Advisory Committee. Consider forming an advisory committee consisting of homeowners. This committee can collect feedback from all homeowners and pass it on to the developers. Of course, an advisory committee can only offer recommendations and has no real decision-making power.
Take It Up With Management. If your association is already being managed by an HOA management company, try reasoning with them instead. The management company wants the best for the community (and they likely want you to retain their services once the HOA transitions). Therefore, they might be able to get the developer to listen.
Use the Law to Force a Turnover. If your HOA already meets the requirements for a turnover according to state laws, you can force the developer to start the transition process. Some developers may feel reluctant to do so, but you can hire legal counsel to help you with this.
Take Legal Action. An HOA lawsuit against the developer is probably not the most appealing choice, but it is sometimes necessary. Consider bringing an injunction pre-transition, though you may need to pay for this yourself. You can also file a suit post-transition on the grounds that the developer-controlled board failed to fulfill its duties.

Homeowner Participation Is a Must

An HOA turnover is a critical step that every homeowners or condo association must take. To ensure a smooth transition or, at least, come close to it, homeowners need to take an active role. That means paying attention to HOA business, including its financials and insurance, right from the get-go.

When homeowners receive control of the HOA, many find it hard to manage it without help. HOA management software is the perfect solution for self-managed communities and management companies alike. Schedule a free demo, call us at (800) 626-1267, or contact us online for more information.

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5 Ways The Condo Manager Software Improves HOA Communication

admin on January 2, 2019

Communication in homeowners associations is crucial for success. However, with so many tasks and responsibilities, it can be easy to forget appointments, misplace paperwork, or lose track of conversations — leading to communication breakdowns between homeowners, board members, and their association managers. Condo Manager software improves HOA communication so you can enjoy more seamless and efficient operations.

How Condo Manager Software Improves HOA Communication

Condo Manager is designed by association management experts and created specifically to address the needs of HOA communities, both big and small. Our software is equipped with HOA communication tools that you can use to improve the communication process of your community. Here’s what you can expect from Condo Manager.

1. Comprehensive HOA Database

Have all the information you’ll ever need at the touch of your fingertips. Condo Manager offers a web portal where you can create profiles for homeowners, tenants, vendors, properties, and associations.

The software will keep personal information such as names, addresses, phone numbers, email addresses, and emergency contact details. If there is an urgent matter, you can quickly lookup a homeowner’s contact information to quickly resolve the issue.

Condo Manager also keeps track of account balances and violation reports. Homeowners won’t have to call management to inquire about unsettled dues. They can just log into the web portal. As a result, associations won’t be overwhelmed with homeowner requests and can free up communication lines for more urgent matters.

2. Detailed Communication Logs

Condo Manager will store the full communication history of your association. The software allows you to monitor past letters, emails, and phone calls from homeowners, tenants, and vendors. The communication log will also show dates, times, call durations, notes, and personnel involved for your reference. Thus, you can always pick up where you left off. Associations won’t have to waste time retreating old ground and HOA members won’t become frustrated at having to repeat themselves during every call.

Condo Manager has robust tracking capabilities as well. For management companies handling multiple associations, the software can track how many hours were spent on communication. The Profitability Module will mark all billable items and generate a full report for easy invoicing. Since everything is detailed, companies can have effective communications with HOA associations that they handle.

3. Streamlined Communications

Associations spend a lot of time connecting accounting and service records with their communications. You have to jump between word processors and spreadsheets, cross-reference records, and double-check emails to get the information you need.

And even then, there are still a lot of opportunities for error. Condo Manager has streamlined the communication process so that your management team can work faster and more efficiently.

Our all-in-one-software has an integrated word processor. You can create letters for collections, violations, architectural requests without having to leave the program. There are custom options and templates so that you can quickly create letters and settle urgent issues in a timely manner.

Condo Manager also has email integration so you can send these letters, as well as financial reports, maintenance requests, and work orders, directly from the software. All you need to do is press the “Send by Email” button and it will be sent. You can also customize the settings to control when emails are sent and who they are sent to. Moreover, the software saves all the emails you send in case there is a need to retrieve the information later.

4. Convenient Reminders and To-Do Items

Condo Manager has built-in reminders and to-do tracking features so you’re always on top of association requests. For instance, you can set reminders to follow-up with homeowners. By keeping appointments, homeowners will feel seen and heard by their association.

The software can also create to-do lists to manage vendors‘ upcoming work orders. You can also set notifications for insurance expiration dates, utility payment due dates, or upcoming inspection dates to prevent lapses or service disruptions in your community.

5. Mobile Compatibility

We also offer Condo Manager Live, which allows you to access the software from a smartphone, tablet, or other mobile devices. Just as long as you have an internet connection, you can keep up with HOA communications.

You’ll be able to access account balances, violations, and work orders, as well as respond to emails and requests, even if you are out of the office. If managers or board members are unable to handle a certain request while off-site, they can easily send an email to concerned homeowners to ensure them that their request has been received.

Find Out How Condo Manager Improves Association Communication

The Condo Manager team understands the unique challenges that associations face, especially when it comes to HOA communications. With your specific issues and needs in mind, our association management experts developed software from the ground up to provide the solutions and support that you need.

Condo Manager is also more than just communications software. It features a full suite of services that can help with the day-to-day management of your community. For instance, simple but comprehensive accounting tools will make it easier to keep track of finances and maintain the financial health of your association.

Condo Manager can also be utilized as self-managed HOA software or by management companies handling multiple associations. The software can be tailored to deliver the association management services that you need the most.

Ready to find out how Condo Manager improves communication? Do not hesitate to call us at (800)-626-1267, email us at sales@condomanagerusa.com, or contact us online for a free demo or to learn more about our HOA software solutions.

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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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