Finances

"Red Flags" that Signal Potential Reserve Account Problems Homeowners associations must conduct periodic reserve studies in order to have a realistic estimate of the costs of repairing and replacing major common area components such as roofs. Ideally, an association will have funds set aside in a reserve account to cover ...

14 Warning Signs that Signal Homeowners Association Reserve Problems State laws and/or association governing documents typically mandate an HOA reserve study be prepared for funding the future replacement of major components such as roofs, streets, and exterior paint. The reserve study provides a current estimate of the costs of repairing ...

7 Steps HOA Boards Can Take to Minimize the Risk of Fraud & Embezzlement Because they rely heavily on volunteer homeowners with varying background experience and limited time that is devoted to providing services as a director, Homeowners Associations are extremely vulnerable to financial damage as a result of criminal ...

8 Steps HOA Boards Can Take to Minimize the Risk of Fraud & Embezzlement Because they rely heavily on volunteer homeowners with varying background experience and limited time that is devoted to providing services as a director, Homeowners Associations are extremely vulnerable to financial damage as a result of criminal ...

A New Year Brings New HOA Budgets As nonprofit corporations, homeowner’s associations must establish budgets each year so that the revenue received by the association is sufficient to pay for, but does not exceed, the projected expenses for the year. This content is for Subscribers. To continue reading, you must ...

Accounting Assistant Steals $148,000 from HOA by Setting Up Company with a Similar Name The Real Deal, a South Florida real estate news provider, has reported that a former accounting assistant in Miami-Dade has been arrested and charged with first-degree grand theft and organized crime to defraud more than $50,00 ...

An Overview of the HOA Reserve Study Process State statutes and association governing documents require homeowners’ associations, regardless of size, to perform reserve studies and maintain appropriate levels of reserve funds. The purpose of such a rule requiring an HOA reserve study is to enable associations to have sufficient funds ...

Are Your HOA's Funds Being Properly Handled and Invested? The management and operation of a homeowners association (“Association”) results in the Association coming into possession of large sums of funds to cover operating expenses and HOA reserves. Over a period of time, the reserve for HOA funds can grow to ...

Association Use of IRS Form 1120-H by Lawrence Szabo, Esq. | Feb 9, 2014 An IRS Form 1120-H is the tax filing form used by homeowners associations that want to take advantage of certain tax benefits that allow the association to exclude “exempt function income” from the association’s gross income ...

Association Use of IRS Form 1120-H An IRS Form 1120-H is the tax filing form used by homeowners associations that want to take advantage of certain tax benefits that allow the association to exclude "exempt function income" from the association's gross income. Exempt function income consists of membership dues, fees, ...

Authorized Signers on HOA Bank Accounts It is common practice for the board of directors for a homeowners association to designate one or more individuals to be the “authorized” signers on HOA bank accounts. Some boards adopt resolutions that authorize all of the current board members to sign on the ...

Bank Financing Available for Homeowners Associations Economic conditions over the last several years have left many HOAs short on capital needed for such items as necessary repairs, upgrades and improvements. With proper documentation HOAs can obtain bank financing for these items. Loans to HOAs do not typically necessitate personal guarantees ...

Class-Action Lawsuits are Being Filed Against HOAs for Charging Excessive Fees by Lawrence Szabo, Esq. | Nov 22, 2016 The Miami Herald has reported the filing of a class-action lawsuit against a homeowners association for allegedly violating Florida’s state laws governing the maximum amount that a homeowners association can charge ...

Ct. Rules HOA Failure to Maintain Does Not Justify Homeowner’s Nonpayment of Dues This case involved a dispute between a homeowners’ association (“Association”) and husband and wife homeowners (“Homeowners”) over the nonpayment of association dues by Homeowners. The action was precipitated by Homeowners’ failure to pay the dues owed to ...

Does Your Association Have Adequate Internal Financial Controls? By nature, homeowners associations are particularly vulnerable to being financially damaged by errors that are made by the volunteer members and property managers who perform various functions for the association, and by deliberate acts of fraud and embezzlement. To protect against and ...