I've had a number of conversations recently with condo owners, including board members, who are in the dark about the association's financial position. They are not receiving financial reports regularly from either the board Treasurer or the association's manaagement company, and they literally have no idea how much cash the association has on hand.

When it comes to condo living, one of the greatest sources of conflict is money. Depending on the size of the condominium association, there could be huge amounts of money at stake. Not knowing what is there and how funds are being used should sound an alarm for any condo owner. All owners absolutely have a right to know the details about their association's financial health.

When there is a lack of transparency in providing documentation about financial matters, there exist the opportunity for those managing the association's funds to commit fraud. It's unpleasant to think that a neighbor or management company could be siphoning funds, but the reality is that it happens.

Owners have a legal right to examine the associatoin's financial records upon written request. At HausFS we believe that financial records should be shared proactively and consistently, and that owners should not have to go to special lengths to obtain information about how the board or their management company is managing their money. 

If you are not receiving regular financial information from your board or management company, call us. We can help.

Reserves are a big topic in any condominium association. How much should we have in reserves? How much should we contribute to reserves? Should we have a reserves study?

For many small associations, reserves may be scarce or non-existent to begin with. Boards may opt to special assess funds as needed rather than pad assessments to accumulate the excess needed to fund a reserves account. While HausFS never recommends this approach, the reality is that many associations live by a "we'll collect it when we need it" philiosophy.

When hard times hit, however, the importance of reserves becomes apparent. Typically, reserves are intended to cover large, expensive repair and maintenance projects that occur infrequently. A good reserves plan ensures that when a roof needs replacing, the association has the funds to cover most, if not all, of the expense, without the need for financing or a special assessment. In times of crisis, as we're experiencing now with the novel coronavirus pandemic, boards may also consider drawing on reserves for emergency needs.

Should your association draw on its reserves during tough financial times? Read more here.

Condo, co-op, and HOA boards are tasked with figuring out the costs associated with their community’s operations. This includes any capital repairs/improvements that are in the works for the coming fiscal year. They must then ensure that there will be enough revenue to cover said costs. Finally, they must inform residents how much more they will need to pay the association or corporation each month to cover all of it 

This process is already difficult at the best of times - it is a balancing act involving predictions and assumptions. During difficult times, those predictions and assumptions are thrown out the window. Sources of revenue that are often reliable are now unknowns and new expenses are popping up. 

Here’s what to keep in mind:

  1. It is important to remember that the basics of budgeting remain the same. Many aspects of a budget are fixed. Recurring costs that are discretionary or can be reduced must maintain a balance. 
  2. Include some form of savings (and a plan to replenish those funds) as a way to prepare for a crisis.

Read more, here

 

Issues of legality and liability are always a concern for owners, board members, and management. This is especially true in these uncertain and challenging times. The Health Insurance Portability and Accountability Act (HIPAA) makes it illegal to divulge the particulars of any individual’s health information without their consent.

As the COVID-19 pandemic has spread and intensified however, residents and board members have expressed concern over not being informed if anyone in their building/association has tested positive. In terms of notifying neighbors, legal pros advise alerting all residents that there may be a confirmed case, reminding them to follow public health guidelines, and letting them know what the building/association is doing to handle the situation. The COVID-positive individual’s name and/or unit number should not be disclosed. Learn more here.

Government officials in Cook county have given taxpayers a penalty-free extension to pay 2019 property taxes.

Taxpayers will have until October 1 to pay their 2019 2nd installment tax bills. This is extension from the original due date of August 3.

The bills will be mailed in late June. They should also be posted on the Treasurer’s website (cookcountytreasurer.com) two weeks before arriving by mail.

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Wed May 19 @ 1:00PM - 02:15PM
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M-206: Financial Management – Virtual Live Edition
Fri May 28 @12:00PM - 03:00PM
M-206: Financial Management – Virtual Live Edition
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