Acting as a board member for an HOA is no small commitment, but it can be. Depending on the size of the property, the complexity of its finances, and the expertise of your fellow board members, the position can either give you a sense of contributing to your community or the feeling that you are being consumed by financial management minutiae. The daily activity of managing an HOA’s bank account, accounting and vendor relations, can be daunting when you consider that your actions affect the value of every home. If your HOA is growing or if you and your fellow board members want to focus more on property management, hiring an HOA management company to handle the HOA’s finances could be a responsible and useful step.
An HOA financial services firm lends its experience in, among other areas, taxes, financial statements, and vendor networks to handle daily financial management issues that arise in HOAs. Daily financial transactions, such as recurring payments, e-checks and credit card payment options, are set up and monitored by the firm. Should the need arise, information such as checks and invoices paid can always be viewed online, so the option of being daily involved is still possible for board members. The financial services firm keeps board members well-informed of HOA finances by offering monthly reports that can include a balance sheet and income statement, as well as Accounts Receivable, a General Ledger, and any other information that the board requires. Last, but certainly not least, these firms may have access to special banking opportunities that improve the financial outlook of the HOA, such as higher interest rates for Money Market and CD accounts and no monthly bank fees.
In addition to the obvious benefits of hiring financial specialists, consider the benefit of having an impartial third party handling the more delicate financial issues that arise, such as collecting fees from HOA members, who/whom are also your neighbors. Not only can this make for an awkward position for neighbors to be in, but also the collector may not be fully aware of collection laws. This can work both to the detriment of the HOA, as well as the individual residents, since the purposes of an HOA are to collect assessments and protect and maintain value, as well as ensure that residents concerns are being heard. Professional HOA collectors are experts in communication and conflict resolution, which can defuse potential problems. As a volunteer, a Board member has no incentive, or the time, to be an expert on HOA issues and, as an individual with responsibilities in their own life, they may understandably consider the HOA financial business to be secondary work.
In the end, a Homeowner’s Association is a corporation and should be run like one. Experts in financial management dedicated full-time to an HOA’s financial well-being can be set on a path and encourage a more neighborly atmosphere among the HOA owners.
