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Old 02-08-2011, 09:10 PM   #1
Join Date: Jan 2011
Default Homeowner's Association Finances

I'm scheduled to take over as treasurer for my small (8-unit), perpetually cash-strapped HOA in January. Currently, we have few reserves and have minimal interest-bearing savings account at the brick-and-mortar bank down the street.

First, if anyone has good resources for HOA financial management (books/websites), I'd be appreciative.

I was thinking about switching to WaMu's free business checking, and linking that to an ING business savings account- 4.75% APR with no fees, which is way better than the tiered rates we'd be getting at most places starting with <10k. I'd eventually work it into a CD ladder if it looks like we don't need the funds to be as liquid- we're trying to earmark savings towards a new roof on the 5-10 year horizon.

Does this sound like a good plan? Does anyone know of better options for checking or savings?
lomiHeice is offline   Reply With Quote
Old 02-08-2011, 09:11 PM   #2
Join Date: Jan 2011

I know that our HOA prefers to keep almost all funds near liquid in case of emergency. While it might be fine, with board approval, to move the accounts I really wouldn't recommend locking up large chunks of your account into something where you could take a penalty or be restricted from taking an early withdraw in case of emergency. Hell a 1 year CD is going to get you MAYBE 1% more then the 4.75% you are getting on that savings account, you really think it's worth the hassle and risk for less then 25k?
hansonbeaver is offline   Reply With Quote
Old 02-08-2011, 09:11 PM   #3
Join Date: Jan 2011

When I was on a condo board years ago, I got the board to start participating with a national association of condo associations. I can't remember it's name, but you can probably find it by Googling. They have seminars in lots of areas, and its great to get tips from them and also to learn that yours isn't the only board that faces certain issues. Often the seminars are given by service providers that hope to get your business (banks, accountants, lawyers, etc.) but there's nothing wrong with that.

Does your association carry D/O (directors and officers liability) insurance? If not, that's a first order of business. Also check with your personal insurance carrier to see if your personal liability policy (part of your homeowner's policy) covers you if you are sued by a homeowner.

The board has a fiduciary duty to the homeowners not to lose money. As a general matter, you'll never get sued for earning "only" 4% in a safe CD, but you'll sure as hell get sued if you invest the association's assets in the stock market and the value goes down.
geoffreygoose is offline   Reply With Quote
Old 02-08-2011, 09:11 PM   #4
Join Date: Jan 2011
Location: Mexico

Get a copy of Quickbooks and a new treasurer as soon as possible. How somebody can be that bad at being an accountant for an HOA is beyond me. I have no experience whatsoever and I do all the day to day accounting for my dads business, cash flow is not complicated. (Oh but what a stressful pain in the ass it can be...)

Hell excel probably works just fine, you just need somebody competent.
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Old 01-27-2012, 03:31 AM   #5
Join Date: Jan 2012

The financial management of your HOA will impact your personal finances.How the reserves (the portion of each assessment being put aside for future planned or unexpected needs of the association) of the association are allocated. Property owner's on fixed incomes don't like pro-active HOA boards to replace big ticket items like boilers, roofs, and windows because of the extra expense being passed back to them.
Jakinda is offline   Reply With Quote
Old 02-10-2012, 05:43 AM   #6
Anderson Keith
Join Date: Feb 2012

Home owner's Association Finances in many perspective us so be helpful in any way and always accomplish a remarkable vision so be happy and determine all those vision those will provide us remarkable direction.
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