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HOA Financials: Fees and Dues Every Homeowner Should Know About

Homeowners associations are established to ensure the safety of their member-homeowners, protect property value, and maintain the community they serve. To put it another way, homeowners associations are there to protect the interests of both the homeowners and property owners (if these are separate entities).

An HOA is run and managed by volunteer homeowners that make up the Board of Directors. They ensure that the HOA is fully functional and fulfills its duties and responsibilities. And part of their responsibilities is to ascertain that funds are available for both maintenance purposes and emergencies. Where do the funds come from? They come from the community itself; homeowners, in other words.

What every homeowner should know about HOAs is that they too have a responsibility to the association just as the association has a responsibility towards them. Payment of fees and dues is arguably one of the most important responsibilities of a homeowner. Here are some of the fees and dues that homeowners should expect to pay to their HOA:

1. HOA membership fee

Depending on your city or state and the size of your household and property, your HOA membership fee could range anywhere from $300 to $500 per month (some HOAs have a much higher membership fee). A part of the fees collected will go into maintenance funds/daily operational expenses and another portion of it will go into the reserve fund, which can be used for emergency repairs and other unforeseen expenses.

2. Assessment dues

In a nutshell, assessment dues are fees collected from homeowners to pay for expenses that aren’t covered by the membership fee, homeowner insurance, or reserve fund, whichever is applicable. These additional HOA expenses typically include emergency repairs, natural disaster response, and emergency assistance to homeowners the costs for which have exceeded the amount of money kept in the reserve fund.

Understand that for such assessment dues, it doesn’t matter whether or not you’re using the facility that needs repairs or whether or not you were directly affected by the natural disaster/emergency. You, as a member of the association, have a responsibility to the HOA, and this includes payment of assessment fees.

Homeowners may be required to pay assessment dues for a certain number of months until such time when the reserve fund is in the positive again. This arrangement, however, depends on the HOA.

While both financials may seem very basic, there are specific inclusions and considerations for each one and this is actually where the hard work lies. For the HOA membership fee, for instance, the HOA must be able to determine an accurate monthly budget for daily operations as well as allocate a feasible amount for the reserve fund and have a little wiggle room to cover bad debt and deferred equipment repairs or replacement.

Usually, HOAs hire the services of a professional property management company to assist them with their financial duties and other HOA obligations.

Understanding HOAs: A Short Guide for Homeowners

If you’re buying or renting a new home in an apartment complex, gated compound or community, multi-family building, or condominium, there’s a good chance that the property belongs to a homeowners association. Most communities in the country have their homeowners association, which means you’ll hardly find a house or residential property that isn’t a part of a homeowners association or similar organization.

Before you sign the contract, take the time to learn about the HOA that covers the property you’re looking to move into for your peace of mind. And if you’re not familiar with the ins and outs of homeowners associations, here’s a short guide to help you better understand what an HOA is all about. Below are the basic things everyone should know about an HOA:

1. HOAs are the gatekeepers of the community

The above statement may seem a little vague but that’s actually what they do; HOAs are the designated gatekeepers of the community. They ensure that the community maintains certain standards to preserve the value of the properties it covers. HOAs also ensure that homeowners are safe and secure in their own homes. And finally, HOAs assist homeowners for their needs, from home repairs to emergency assistance, especially during natural disasters and other unforeseen events.

2. HOAs have a special set of CC&Rs

Every HOA in the country has its own set of covenants, conditions, and restrictions (CC&Rs). Within these CC&Rs are ruled that homeowners must follow. These rules cover everything that has to do with the property, homeowners, and the community; from the color of the exterior walls to landscaping, street parking, bikes and other toys in the front yard, garage gate, to the number of people in the household and everything in between.

3. HOAs collect fees

HOAs collect membership fees either monthly, quarterly or annually depending on what’s stipulated in the CC&Rs. Bear in mind that the bigger your property and household, the higher the fees to be collected from you. In other words, HOA dues/fees aren’t standard for every homeowner in your community.

4. HOAs can evict homeowners

In cases where the homeowner was found to violate one or several rules covered in the CC&Rs, the HOA has the power to evict them. But rest assured that eviction is the last course of action. In general, the homeowner will be approached by the HOA first to talk about the supposed violation. A written warning is also usually given, and finally, a hearing with the HOA Board of Directors could ensue to put the issue to rest and resolve it once and for all.

Review the HOA’s CC&Rs before signing the lease/deed of sale. Buyers whose offer to buy has been accepted have the legal right to these HOA documents.

Four Ways HOAs are Minimizing Risk of COVID-19 in Their Communities

When the World Health Organization announced that COVID-19 has escalated to such proportions that it has become a pandemic, countries were quick to enforce rules and restrictions to curb its spread. This meant businesses closing their physical locations, individuals staying home, and social events had to be canceled. For HOA communities, these restrictions meant keeping homeowners safe inside their homes.

As HOAs grapple with these unprecedented changes, they acknowledge the fact that they are responsible for the health and safety of their respective communities. The following are some of the ways HOAs are keeping their communities safe:

1. Strictly enforcing physical distancing

Living with the threat of COVID-19 in the air means normal things suddenly became taboo. Shaking hands, holding hands, hugging, and sitting side by side suddenly became a thing of the past. As health experts advised individuals to practice physical distancing (at least two meters apart) to help prevent the spread of the virus, public spaces were ordered to close down for the time being.

For HOA communities, these meant gyms, pools, and spas. Some HOAs chose to keep their parks open with physical distancing still strictly enforced.

2.Restriction on visits and gatherings

In keeping with the physical distancing protocol, HOAs have opted to restrict outside visitors except when an emergency calls for it. This includes medical personnel for health emergencies, caregivers, and other guests/personnel needed to assist a homeowner.

Gatherings, however, are strictly prohibited. This means parties for birthdays, anniversaries, and milestones will have to be postponed until local governments, upon the advice of health experts, lift such restrictions on group gatherings and events.

3. Postponing construction work and other contractual jobs

Construction work will have to be postponed as well except for emergency repairs. Construction work covers renovations and remodeling work both on homes and common areas. On the other hand, if the HOA has contractual employees for specific tasks or jobs, it is up to them to allow employee keep working or freeze the job order until such time when they deem it necessary (and safe) to resume work at the physical location.

4. Keeping homeowners and other stakeholders informed

Understanding that these are unprecedented times, homeowners associations double their efforts to communicate with the homeowners and other stakeholders. Keeping everyone informed about the goings-on in the community, particularly about changes in safety regulations, COVID-19 updates, emergency plans, and disaster management, is critical to preventing transmission within the community.

As HOAs grapple with the effects of COVID-19, it is their duty and responsibility to mitigate risk and keep homeowners informed at all times.

4 Changes to Expect in HOA Living in the New Normal

The COVID-19 pandemic is challenging everything we know about health and safety. And though states across the nation are beginning to ease restrictions, we shouldn’t expect an immediate return to the way things were before the outbreak.

HOAs are gearing up for the new strategies they’ll have to employ to ensure the protection of everyone in the community. With that in mind, here are 4 changes homeowners and HOA board members are likely to see in HOA living in the new normal.

1. New public space usage regulations

The safety of every resident is among the chief priorities of any HOA, so anticipate the enforcement of temporary rules that’ll reduce your exposure to crowds. Don’t be surprised to find regulations concerning social distancing and the wearing of PPEs to be in an application in common areas such as streets, parks, and clubhouses. You should also expect new systems to limit the number of people using specific facilities or amenities at any one time. For example, you may have to make a reservation before the HOA permits you access to the swimming pool or basketball court.

2. Increased board meeting flexibility

As physical gatherings are best avoided, HOA board meetings will be conducted using online technologies such as Skype or Zoom. The convenience these technologies provide will grant board members greater flexibility when it comes to scheduling and attending essential conferences. It will also make it easier for residents to participate in such online assemblies, allowing for information to flow more freely between every member of the community.

3. The reallocation of HOA resources

HOAs will undoubtedly reallocate additional funds to safety measures, with a larger percentage of the budget going to cleaning crews. As such, expect costs to rise concerning such services. However, the decreased usage of shared facilities also means a reduction in other expenses, giving HOAs and homeowners several cost-saving opportunities.

4. Extra opportunities to improve your home

The current situation is affording us more time to ourselves and our personal goals, so it will be common to see homeowners busying themselves with various home improvement projects, from trimming the lawn, to planting a garden, to making minor architectural upgrades to one’s place of residence. To make sure they aren’t breaking any rules, it will benefit homeowners to familiarize themselves with HOA guidelines and communicate their intentions to the community manager.

Do you have any questions about HOAs? If so, kindly contact us through our corporate website or give us a call at (888) 828-9444. We’d be happy to answer all your questions!

3 Important Tasks of an HOA Management Company

Homeowners associations are run by homeowner-volunteers who are part of the community they serve. Being volunteers, they do not receive remuneration for their services, which means most of them have day jobs; which also means they may not always be available to fulfill their duties, especially in emergencies. This is why most HOAs turn to a professional HOA management company to help them fulfill their duties to the community and homeowners.

What does an HOA management company do? In its broadest sense, an HOA management company helps the HOA fulfill its duties to the homeowners as well as to the community. To better explain how exactly an HOA management company helps a homeowner’s association, here are three important tasks they perform:

1. Finance

One of the oft-neglected aspects of an HOA has to do with finance; everything that has to do with managing the association’s financials; from collecting dues and other fees to ensuring there is an emergency fund for unforeseen events (like natural disasters and emergency repairs), bookkeeping, managing bank accounts, billings and financial assessments, and following-up on delinquent accounts, among many others.

2. Site maintenance

In every residential community, whether it be a gated subdivision or a multi-family building, there are common/public areas that HOA members can use for leisure, entertainment, fitness, and such. From swimming pools to parks and playgrounds, walkways and pathways, and other common areas, the HOA management company has to perform regular inspections of these areas to make sure their properly maintained for the safety of the residents and guests.

Additionally, the HOA management company also sees to it the rules and regulations regarding lawns and landscaping, exterior paints, and other property-related regulations are strictly followed to maintain property value.

3. Administrative tasks

Last but not the least are administrative tasks. These include scheduling and attending board meetings, submitting a monthly report to the Board regarding management tasks, as well as ensuring that all members of the HOA strictly follow the HOA’s <a=rel”no follow”href=”https://homeguides.sfgate.com/california-homeowners-association-laws-2994.html”>Covenants, Conditions, & Restrictions (CC&Rs). Additional HOA services may also include any or all of the following:

  • Board education and governance
  • Vendor selection and cost reduction services
  • 24-hour emergency services
  • Homeowner participation, including sub-committees
  • Reconstruction and large-project management oversight

In general, HOA management companies provide custom-made programs based on the needs of each HOA. Understanding that each HOA is unique with unique strengths and weaknesses, programs tailored to address each of these are the best way to ensure that the HOA remains fully functional; serving the interests of the homeowners and the community as a whole.

HOAs vs. Property Managers: 4 Key Responsibilities

You know about homeowner’s associations and you’ve heard of property managers, but do you know what they do, and where their duties and responsibilities start and end? To help you differentiate between the two, below are a few of their key responsibilities:

On management duties:

1. Homeowners associations manage a specific residential community

Residential communities, neighborhoods, and housing complexes are often governed by a homeowners association or HOA. The HOA’s general responsibility is to manage the residential community; making sure that homeowners comply with <a=rel”no follow”href=”https://www.sandiegouniontribune.com/business/story/2019-10-19/many-new-laws-will-affect-hoas-in-2020″>rules and regulations that pertain to property maintenance and neighborhood conduct, and basically, work with the HOA to maintain specific community standards.

2. Property managers oversee a specific property (or cluster of properties owned by the same entity)

If an HOA manages an entire residential community, a property manager oversees a specific property or cluster of properties owned by the same person or entity. In other words, they are only concerned with the specific property assigned to them or for which they were hired. Usually, their services are required for rental properties; working on behalf of the property owner.

On similar duties and responsibilities

3. HOAs oversee the maintenance of common areas, collect dues, hire contractors for repairs, and vet potential homeowners

As mentioned above, HOAs manage an entire residential community, which means they are also responsible for maintaining common areas and public facilities like swimming pools, fitness centers, playgrounds, and such. If anything needs to be repaired, they will oversee the hiring of contractors and workers (this may also extend to repairs needed by homeowners for their own homes).

Additionally, HOAs may also interview people interested in renting or buying a property in their community to evaluate whether or not they are a good fit for the community. Last but not the least, HOAs are also responsible for collecting HOA dues and other fees.

4. Property managers vet tenants, hire contractors, oversee property maintenance, and collect rent and dues

Just as HOAs evaluate potential homeowners, property managers also evaluate potential tenants. This is done to make sure that not only will they be good renters in terms of taking care of the property but more importantly, that they are good payers. In other words, the property manager has to make sure that the tenant has the financial capacity to pay rent in full and on time every month.

They may also oversee the hiring of contractors and laborers for work that needs to be done on the property (for repairs and maintenance).

On HOAs and property managers working together

HOAs are run by volunteers who comprise the Board of Directors and Board Members. They are residents of the same community and they typically have day jobs and personal responsibilities to take care of every day. To ensure that the HOA remains functional for the benefit of the community and homeowners, they may hire a property manager to help them with some of their duties and responsibilities.

Disaster Management Planning: 7 Tips for Your HOA

When catastrophe strikes, emergency protocols can ensure the safety of your HOA community. Given the many variables to consider when creating disaster relief policies, however, determining the most effective ways to protect your residents can be tricky.

With that in mind, here are 7 HOA disaster management planning tips:

1. Evaluate possible area-specific disasters

Determine if your community is in an area susceptible to natural disasters like earthquakes and hurricanes, then develop implementable emergency protocols around them. It’s also a good idea to design measures for potential risks such as terrorism and disease outbreaks.

2. Consider your community’s demographics

Design evacuation protocols that provide everyone in your community realistic ways to reach safety. This includes those with mobility issues like the elderly, and people with disabilities. Families with small children should also be taken into account when developing such procedures.

It’s also important to consider your community members’ cultural backgrounds. A diverse HOA community is one where many languages are spoken, and where English may not be understood. Therefore, emergency guidelines should be available in other languages in addition to English.

3. Make your emergency policies accessible

All disaster relief procedures should be easy to understand so all community members will have no issues carrying them out when necessary. All guidelines should also be published on your HOA’s website to allow residents to ask questions about rules they’re unclear about.

4. Conform to wildfire protocols

Certain areas in the US have rigid wildfire protocols, which your HOA must adhere to, to minimize occurrence and damage of such a calamity. You must also be proactive in wildfire prevention, which means following such rules as regularly trimming landscape, avoiding the use of specific construction materials, and more.

5. Coordinate with the Emergency Management Office

An area’s Emergency Management Office can provide assistance to calamity-affected communities, so make sure to collaborate with such an agency when planning disaster management.

6. Integrate an emergency alert system into your plan

An electronic emergency alert system sends emails and text messages to residents to notify them about specific developments associated with potential catastrophes. This allows them to make the necessary preparations for such situations. Make sure records of your community members’ contact information are regularly updated.

7. Provide disaster relief training

Host meetings designed to educate community members about your emergency protocols, especially before the onset of potentially hazardous seasons. This will ensure people are reminded of the actions they should take to keep themselves safe in the event of a disaster.

Another way to educate residents about your disaster plan is to include information about it in your HOA newsletter. An article about a potential disaster and what can be done to keep safe in such an event, for example, can be extremely helpful.

How to Help Aging HOA Residents: Here are seven ways…

If you’ve been a part of your HOA community for many years now, chances are you have neighbors who’ve reached their senior years already. They may have been young when they moved in but now they have become vulnerable” members of your community; and you, as a member of the same HOA community, have a responsibility to look after them. How do you help aging HOA residents? Here are seven ways…

1. Always check on them

First off, it is recommended that you get everyone on board with your “senior citizen watch” project. Take turns keeping an eye on them and call for assistance when needed. Take this time, too, to spend a little time with them.

2. Perform regular inspections around the community

When was the last time common areas in the community were inspected and evaluated for “senior safety?” Check ramps and walkways, stairs and rails, gates, and other public areas that everyone has access to. Make sure there are designated points of entry and exit and other areas for senior residents alone for their safety.

3. Get contact details of the aging residents’ respective families

Should anything happen to your aging neighbor; should there be an emergency, who is the resident’s next of kin to contact? You have to know who to call because your neighbor’s life could very well depend on that crucial phone call.

4. Provide point persons

In the same vein, who will the senior residents call should they need help with something? It could be a home emergency in the middle of the night like a power outage or a slip and fall accident. It would be ideal if there is only one point person for all concerns, so the senior resident won’t have a difficult time figuring out who exactly to call from the list of contact persons you provided.

5. Stay up-to-date with state laws and regulations

You have to stay updated with laws and regulations regarding special privileges for senior citizens as well as local and state laws regarding disabilities in aging residents. To know these laws and regulations is to protect the vulnerable members of your community.

6. Assist aging residents with HOA rules and restrictions

Homeowners associations have their own set of rules and regulations, which are strictly implemented for the betterment of the community. And within these rules and regulations are specific guidelines for practically everything that concerns the community, including such restrictions as using specific colors on exterior walls, and landscaping. Aging HOA residents may not have the physical capacity anymore to comply with these guidelines, and this is where you come in. You can make sure that these are still followed by offering your help.

7. Hold special events

Often, < a= rel”nofollow”href=”https://www.who.int/news-room/fact-sheets/detail/mental-health-of-older-adults”>senior citizens feel lonely and isolated because of their impaired mobility and cognitive function. Community events held especially for them will help ease their loneliness, make them feel they still matter, and that they are an important part of the community.

The Roles of 4 HOA Board Member Officers Explained

As a homeowner it will not be unusual for you to wonder what is expected of board members from your homeowners’ association (HOA). You might even consider volunteering for your HOA or aspire to become a board member yourself. Either way, it makes sense to be aware of each board member’s role.

There are usually four officials who make up the board of directors. These are volunteers elected by members of the community and thus don’t receive compensation. They include the President, Vice President, Secretary, and Treasurer. The purpose of the HOA board is essential to manage the association via their respective duties, as outlined below.

President

The HOA President’s primary responsibility is to manage protocols in making decisions affecting the association. The position requires qualified individuals possessing a good grasp of association bylaws, regulations, and inner workings. The President leads the conduct of association or community-wide meetings and can delegate committees to manage certain tasks. Finally, it is the President’s duty to achieve a fully functional HOA.

Vice President

The Vice President assumes the functions of the presidency in the event the President is unable, for some reason, to perform duties the position calls for. The vice-president should, therefore, be likewise familiar with the association’s bylaws and regulations. When not standing-in for the President, they may be delegated key association functions as well.

Secretary

The Secretary has the responsibility of handling all association documentation, safe-keeping of records as well as prompt submission of legal documentary requirements. Other tasks involve normal secretarial duties like issuing meeting advisories, recording minutes of meetings, and dissemination of important documents to other board members.

Treasurer

The Treasurer is responsible for managing association funds, maintaining complete records of the fund and all transactions authorized by the association. The Treasurer also prepares the annual budget and ensures sufficient reserves for sanctioned investments or unexpected expenditures. The Treasurer has to duly inform other board members of the HOA’s financial standing and report any discrepancies thereon. The Treasurer also must observe regulatory compliance concerning HOA’s financial operations.

Members of the community are as important as elected officials and thus it’s significant that they get involved in association elections and meetings. With a board working in unison, combined with the participation of the community, you can expect to have a place that would be pleasant to live in.

Do you have any other questions about the HOA Board Member roles? If so, kindly contact us through our corporate website or give us a call at (888) 828-9444. We’d be happy to answer all your questions!

3 Common Questions About an HOA Board of Directors

Every homeowners’ association (HOA) has a Board of Directors that’s tasked with managing, improving, and protecting its community. If you’re part of such a community, knowing more about your HOA Board of Directors can help you stay updated on all matters concerning your residential area.

To give you a better understanding of the HOA Board of Directors, here are the 3 most commonly asked questions about it.

1. What are the different roles of the Board of Directors’ members?

An HOA Board of Directors usually has four to five different offices, which can take the form of the following:

  • The President is the Board’s executive officer. They preside over decision-making proceedings and are responsible for ensuring the proper execution of solutions to all issues affecting the community. They also co-sign checks and sign contracts.
  • The Vice-President performs the President’s duties should said President be absent, in addition to other responsibilities.
  • The Secretary regularly updates information about members, notifies members about meetings, takes meeting minutes, signs contracts on the HOA’s behalf, and records votes.
  • The Treasurer signs checks, receives and deposits money, maintains financial records, prepares the yearly budget, and schedules the yearly examination of accounting books.
  • The Member at Large is the HOA board’s fifth voting member, and performs any assigned duties.

2. What are the HOA Board’s other duties?

The HOA Board may also:

  • Determine the annual HOA fees
  • Employ an independent contractor or manager
  • Protect homeowners by adopting and modifying rules and regulations concerning HOA members’ personal conduct and the use of shared spaces

3. Why should an HOA’s Board of Directors be homeowners in said HOA?

It’s in everyone’s best interests that an HOA’s Board of Directors is composed of people who live in a community governed by that HOA. Homeowners have a firsthand experience of the many issues affecting their community, like HOA fees, the proper maintenance of shared spaces, and more. As such, homeowners have a vested interest in finding the best solutions to problems impacting their community.

Because of their knowledge, experience, and personal stake in the betterment of their community, homeowners make ideal candidates for an HOA’s Board membership. It’s, for this reason, it’s extremely rare for an HOA’s Board of Directors to have members who aren’t part of the HOA.

Do you have any other questions about the HOA Board of Directors or HOAs in general? If so, please feel free to contact us through our corporate website, or give us a call at (888) 828-9444. We’d be glad to hear from you!