Since the end of the year is now approaching, HOAs need to ensure that they have completed all their required tasks to successfully close out the fiscal year and end-of-year strategic planning. When considering what tasks need to be completed, it is helpful to have an HOA year end checklist. This is to make sure that your HOA has completed the required tasks to start the new year with success.
HOA Year End Checklist: 10 Important Questions to Ask
To prepare for the new fiscal year, HOAs must ensure that finances for the current year are in order. Here are important questions to ask as part of your annual HOA review.
1. Has Your HOA Board Sent Out the Required Annual Disclosures?
The financial year ends in December. Your HOA must send out its required annual disclosures before the fiscal year closes. This is the best way to avoid any penalties or suspicions that the association is not being managed above board.
If your HOA board members are having trouble understanding the annual disclosure requirements, it is best to work with an accountant to provide pertinent advice on what information needs to be filed for the annual disclosures of the association.
2. Did You Update Your Reserve Study?
Reserve studies are important to see how much of the membership dues are left in reserves for the HOA to utilize for its expenses.
It is the responsibility of the association to figure out whether it will need special assessments. For instance, a special assessment may be necessary if your HOA doesn’t have reserve funding left.
However, special assessments are a subject of controversy since members rarely want to contribute additional funding to the HOA.
Special assessments can also call into question how the budget of the association is being managed. As part of your HOA checklist, make sure to study your HOAs reserves carefully to be sure the board has a clear picture of the health of the HOA’s finances going into the new year.
3. Assess the Status of Major Projects and Whether They Need to Be Continued in the New Year
Look through your HOA annual calendar to see if there are major projects that are currently ongoing. Ideally, they should be completed by the close of the year. If it is impossible to complete the projects by then, make sure to allocate capital in next year’s budget to cover the cost of the project’s completion. This is essential if you want to have a well-organized budget for the next fiscal year.
4. Have You Reviewed Your Rules and Regulations?
The end of the year is a healthy time to review the rules and regulations in your HOA community. Try to look at which policies are working and whether additional HOA regulations need to be enacted. Make sure to publish these new regulations before the end of the year and provide a date in the next year when the new regulations will go into effect. By providing a transition period, it will be much easier for residents to adjust to the changes while raising minimal complaints.
5. Have You Planned Your December End-of-Year Gathering?
Residents greatly appreciate end-of-year gatherings organized by their HOA. This is a great way to continue fostering a close community amongst residents. Social events are also a great opportunity to make announcements for upcoming events and planned projects for the next year while residents celebrate the close of another year.
6. Have You Finalized Your Budget for Next Year?
Having a concrete budget before the end of the year is essential. HOAs that do not do this tend to struggle with how to effectively organize their association’s money. Make sure that your HOA has begun talks about next year’s budget and successfully agrees before the year ends.
7. Have You Scheduled Officer Elections for Next Year?
Board elections need to occur regularly. Make sure to schedule the elections and make them well publicized so that your residents can make time to vote when the time comes. Having transparent elections will increase morale amongst residents and communicate that the HOA is conducting its practices ethically.
8. Have You Planned Enough Gatherings for the Coming Year?
Residents have busy lives. It is important to have a social calendar posted for the upcoming year.
Granted, events will come up but having a framework for the social gatherings for the next year is a great way to increase resident attendance and strengthen your community-building efforts.
9. What Are Your HOAs Goals for the Next Five Years?
At the end of the year, it is a good time to assess what the HOA hopes to achieve in the next five years. For example, are there any large projects that are going to require substantial funding? HOA board members need to discuss the association’s strategic goals so that the HOA will be able to come up with the capital required. It also helps create a clear effective management strategy that ensures the HOA is running at optimal capacity.
10. Is it Time to Hire an HOA Manager?
If the demands of the HOA are becoming too cumbersome for the board — to a point that their quality of service to residents is being compromised — then it is likely time to consider outsourcing certain management tasks to a company experienced with HOA Management.
A professional management company will be able to address HOA action items that the board doesn’t have the time or expertise to handle properly. The support provided by an HOA Manager and support staff can guarantee the continued success of your HOA community. Consider having this discussion at the end of the year to be able to project the cost of hiring an HOA Manager and the potential benefits it will bring to your community
Evaluate Your Community’s Financial Status with an HOA Year End Checklist
Managing a homeowners association is not an easy task, but board members must persevere and continue to do the best job that they can do. Having an HOA end of the year checklist helps evaluate your board’s performance. Moreover, it identifies ways to improve the quality of service provided to your residents.
By asking these 10 important questions, HOA boards will also be able to determine the financial status of the community. Make sure to conduct the evaluation early on so that you have enough time to make necessary changes before the fiscal year ends.
If you have any questions about HOA year end checklists or community association management in general, feel free to contact Elite Management Services through our online contact form or give us a call at (855) 238-8488.
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