The Importance of Finances

I talk to many homeowners who do not realize just how important it is to understand the financial state of their HOA. In light of the downturn in the economy we have seen foreclosures and budget deficits that started in 2006 which are now causing serious problems. If one homeowner is late paying their dues or does not pay at all, the annual budget suffers. If there is a foreclosure in your HOA the annual budget will suffer.

The remaining homeowners are responsible for making up the difference by way of an increase in the assessment or a special assessment due within a specified period of time. As a homeowner, I suggest that you are proactive and do your best to understand your HOA's financials. Don't leave it up to your management company to "figure it out." Ask them and your Board of Directors to explain the financials to you. Chances are, your neighbors will be just as curious as you about the figures.