HOA Board: What are the Responsibilities and Duties of HOA Board of Directors

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are hoa board members paid

It lists down all your revenues as well as your expenses, deducting the latter from the former to arrive at your net income or loss. The HOA balance sheet compares your association’s assets against your liabilities and owner’s equity. It gives you a complete look at your HOA’s net worth, including how much money you have in your bank account. Accounting is arguably one of the most challenging aspects of managing an HOA community.

are hoa board members paid

You Pay for Things You Might Not Use

  • Written by Spectrum AMKeeping the association in good financial standing is one of the most important duties of an HOA board.
  • An audit identifies any inaccuracies in your records in an effort to remedy them.
  • Homeowners Association (HOA) dues are fees that homeowners in communities with HOAs pay for repairs, upkeep, and improvements in the neighborhood.
  • Often, that’s because they lack understanding of what’s involved in serving on the board.
  • Federal guidelines require that associations carry this coverage in order for properties to be purchased using Fannie Mae- or FHA-backed mortgages.

In Illinois, these boards are governed by either the Common Interest Community Association Act (CICAA) or the Condominium Property Act (CPA). From there, HOA boards have a set of governing documents that detail how everything in the association will work. It is the board’s job to oversee those documents, make amendments as needed, and ensure that both the board and association members adhere to them. In Utah, all non-profit corporations are required to have a board consisting of at least 3 board members. Your community’s governing documents should specify the number of board seats available for your board. However, it’s the HOA’s board of directors that’s responsible for maintaining the common areas.

Avoiding Conflicts of Interest Inside a Community Association

But the biggest one, I guess, is that you can avail of everything the community offers – great amenities, for example – without having to lift a finger to maintain and upkeep it all. Discover what the obligations and responsibilities of HOA board members are. To avoid any potential conflict of interest, it is best that such positions remain volunteer. If you’ve been wondering whether your HOA board members are being compensated for their labor, here are three notes to help clarify why they likely aren’t being paid.

Enforcing governing documents.

Our attorneys take a closer look at conflicts of interest, including examples of improper behavior and what HOA board members can do to prevent these situations from arising. Becoming a director isn’t just about getting the title; it’s about committing to your community and dedicating time and effort to improve it for everyone. If you’re ready for the responsibility, it’s a rewarding way to make a real impact. Regular board and membership meetings are the stage for critical decision-making. They usually occur monthly, but the frequency can vary depending on the HOA’s needs. Special meetings might focus on significant issues like major renovations or rule changes.

  • With some exceptions, members serve as volunteers driven by their desire to serve the community.
  • “Budgeted versus actual” or “standard versus actual” costs compare budgeted costs and the amount of recorded costs.
  • Learn the roles and responsibilities of your HOA Board of Directors and how active engagement can transform your community.
  • As always, if you have questions or concerns about board member payment, contact your community association manager or attorney.
  • After purchasing a home that’s part of a community association, all residents automatically become members of the association and must follow its rules and regulations.
  • Understanding the breakdown of the board structure is vital for smooth operations.
  • Disseminating information through email, newsletters, phone calls, or letters are just some of the tasks involving communication that a board member can expect to complete.
  • Let’s explore the critical aspects of HOA board responsibilities and how they contribute to a living community’s overall well-being.
  • By efficiently collecting dues, the board can ensure the community is in good financial health and meet its financial obligations.
  • The reserve study is used to calculate the strength of the reserve fund (essentially a “rainy day” fund) and predict how much it will cost to replace those components down the road.
  • The new law, HB 1203, Homeowners’ Association, applies only to HOAs in Florida.

What this means is that you are responsible for every dollar that’s spent on the community’s behalf. Receiving any kind of payment would create a pretty clear conflict of interest. For example, if Board members are receiving compensation, it would be problematic for them to also be in charge of giving themselves raises. Your governing documents will thoroughly outline all HOA board member eligibility requirements. People often buy properties with an HOA because of the consistent property values. Tasked with protecting and enhancing the community, board members are directly involved with maintaining the community’s appearance and ultimately boosting property values.

In essence, the role of a community association or property manager varies depending on the size and complexity of the HOA. Still, in smaller, self-managed communities, engaged homeowners can effectively handle many of these tasks, fostering a more cohesive and efficient environment. Because misinformation and misunderstandings can create friction and lead to low morale, residents should make it a priority to learn the ins and outs of HOA living. Attend seminars, ask your manager, board, or management company for resources, or do your own research. Remember, everyone is on the same team, and the more people know, the better off everyone will be.

New Laws Affecting California HOAs in 2024

are hoa board members paid

Prevent Fraud –  Precautions should be taken to protect association finances and avoid fraudulent activity. One single person should not have control over every financial department; for example, the person handling receivables should differ from the one in charge of writing checks. In order to meet FHA standards, HOA fidelity bonds should cover at least three months of assessments in addition to, the HOA’s reserve funds.

Learn about your HOA and role as a homeowner.

are hoa board members paid

Generally speaking, governing docs should be clear in outlining whether HOA Board members can be compensated. Most of the time, they will expressly prohibit Board members from receiving hoa accounting any type of financial compensation or other special perks. In most HOAs, Board members are expected to serve as volunteers, motivated by their desire to serve within the community.

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