HOA Finances

What are HOA finances?

HOA finances include monies that Homeowners Associations (HOAs) handle for the benefit of their member property owners and their covenanted communities. Income for homeowner associations typically includes recurring dues and fees along with fines and other penalties for HOA regulation violations and special assessments for emergencies and capital projects. Operating funds pay ongoing expenses such as landscaping and maintenance fees, management fees, utilities, trash collection, insurance premiums, and salaries and wages (when working with a property manager or property management company), among others. Escrow and reserve accounts may hold funds related to property transfers, reserves for emergency repairs such as storm recovery, and reserves for capital improvements and scheduled maintenance such as repaving community roads and utility upgrades.

Why are HOA finances important?

Managing and accounting for the funds that come into the possession or control of a homeowner association is arguably the most crucial responsibility of HOA boards, and property management companies. These financial administrators can be held civilly and criminally liable for mismanagement of funds. Just as important, proper management of funds directly impacts both quality of life and property values in such communities—collection of dues and fees, approval and payment of recurring and other periodic expenses, consulting professionals for oversight and advice, and managing escrow and reserve accounts for both security and return on investment. Further, transparency in the management of funds—making financial statements available online to property owners, for instance—can reduce member complaints and, thus HOA board workloads.

How can you use “HOA finances” in a sentence?

Handling of HOA finances can be greatly enhanced with HOA management software.