How Successful HOAs Are Preparing for the New Year
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We’re all familiar with the seasonal changes in South Florida as we close in on the final months of the year, such as watching the return of the snowbirds, getting to open your windows, and being outside under a slightly less intense sun. Similarly, there are some key seasonal events happening for homeowners associations (HOAs).
HOAs are busy getting set up for 2022, frequently with new boards and budgets. Having worked with hundreds of HOAs during my career, I have some tips that can help HOAs as they go through this process.
Getting the new board signed on: The sooner you can start your election process for new board members the better, as this step kicks off a series of actions every HOA must do to prepare for the coming year. Once the new board is in place, one of the first orders of business should be adding signatories to the financial accounts.
I always remind clients that it’s important to have as many board members as possible on their accounts, which provides more checks and balances on all financial matters. For example, if a property management company is cutting checks on the HOA’s behalf, having a board member signing the checks as well is helpful since it provides one more set of eyes on the money going out.
Passing detailed budgets: The budgets for HOAs are just like those for a house. If your air conditioning goes out or your roof leaks, you want to be sure there is a fund to pay for timely repairs. An HOA’s budget should outline all major projects coming in the future, so you can start planning ahead. Reach out to your banker now, ahead of the project start date that you’ll need a loan for. Interest rates are still favorable for those seeking loans and you’ll want to take advantage and work these plans into the budget.
There is sometimes a question as to whether a board should ever waive the need for reserves. Don’t be tempted. You just don’t know what the future will hold and what you’ll need. It’s a good time to get a study done of your reserves, to be sure you’re planning correctly. If you’re reserving funds appropriately, you’re going to have a more financially viable organization.
Connecting early with partners: Between the staffing challenges some industries are facing, the coming of the holidays, and the usual end-of-the-year extra workload, the pace picks up for everyone you do business with this time of year. Personally, I’m usually doing what feels like 4,000 signature changes toward the end of the year. From planning holiday parties to requesting that billings for HOA dues be printed, stay ahead of the rush and get your requests for third-party help in early.
Mark Nuzzolo is a Senior Vice President and Director of Association Banking at Valley Bank, where he was worked for the past 13 years. Based in West Palm Beach, he works with HOAs and property management companies all over Florida.
– Valley National Bank is a Member of the FDIC and Equal Opportunity Lender.