You’ve been the treasurer of your homeowners association for 8 years, and have continually warned your fellow HOA board members that without saving for reserves they’ll be headed for real trouble - and now that day has come.
You’ve been elected as Board President and face two large special assessments back to back within the next two years. There’s no way around them. The pavilion, signs, tennis courts and other assets are all shabby, outdated and on the verge of becoming hazards. These projects must be done for safety reasons. Not to mention they make the Association look like an uninviting place to live.
Previous conservative board members proclaimed and insisted "We'll get things fixed when it's time"...well, now, everything is due. It's a mess and your HOA board has some tough leadership and strategic plans to put forth. You’re very concerned about what once was a premier neighborhood. Furthermore, members don’t understand that this makes the Board liable for lawsuits by those who feel they are unfairly having to make up for those who never planned well for the community.
Sadly, the above scenario is all too common among homeowners association. HOA boards seem to be in denial that planning for future maintenance projects and upkeep is a must, not a maybe. Otherwise, the Board is faced with the unfortunate job of enforcing large special assessments. Maybe your Board is on its way to being faced with the same fate. It’s not too late to make a 180 degree turn and start fulfilling your job as an HOA board to protect, maintain and enhance the Association.
While there’s probably no getting around the special assessments needed for the projects that need to be completed now, there are other ways to help get those funds. You also need to start planning a reserve budget. Has a reserve study been done? Not only is this a key component to planning well for the Association, it’s also the law.
Consider hiring an HOA manager to help. They will lead you down the road to getting the reserve study done by pulling in a reserve specialist and helping your HOA board understand what it means to be fully funded. While there’s no law saying any money needs to be in the reserves, the law does require a reserve study to be done.
When it comes to the idea of members feeling like they’re making up for those who didn’t plan well, the hard truth is that an astute buyer should have done their research and known the financial situation of the Association ahead of time.
While you’re living in the homeowners association you’re responsible for paying your fair share. It’s also your responsibility as a homeowner and HOA board member to pay attention and educate yourself. Bottom line: It takes personal involvement to hold the Board accountable and ensure they are planning well for the Association.