When HOA boards fail to do their job correctly, it can have a devastating effect on the neighborhood and can ultimately lead to homeowners leaving or not want to buy in your community. Here are some of the biggest mistakes board members will make time and time again.
Not collecting overdue fees
Collecting fees in a timely manner is very important for any HOA. As a board member, it is your duty to collect these fees in a professional manner. Failure to collect these fees can impact your association’s cash flow and hinder your HOA.
Fail to file taxes
When associations are self-managed it is common to see the board forget to file tax returns. Every HOA is required to file a federal tax return (IRS Form 1120-H). Failure to file can put your association in trouble with the IRS and you may be at risk of losing non-profit status.
Controlling the funding
Budgeting is an important aspect of every business. A homeowners association is no different. Failure to properly spend the association’s funds may lead to fraudulent practices. It is important to account for every single dollar spent. If you do not know how to budget correctly, these days, there are a lot of resources online to show you the best practices. Conduct a quick Google search and see the vast amount of information at your disposal. Using software like Quickbooks can also help in getting organized and keeping track of your association’s spending.
Filing state documents
Failure to file an Annual Report with the Secretary of State may result in a dissolution of the association. This can have serious legal and financial ramifications for your HOA.
Not hiring professionals
There is nothing wrong with using professionals to help your association, especially when it comes to finances and accounting. Seek professional help in any areas that your HOA board needs. All of the above mistakes may be easily avoided by hiring professionals to do the job. Contact us today to learn how Allied can help you. See our previous post on how to recruit top prospects for your board.