7 Key Items Your HOA Board Should Review Each and Every Year
Your homeowners association board is an important working entity in your community. In fact, studies show that the best ROI for any community association is its board of directors. A well-functioning board and an engaged staff of professionals ensures that the community is properly managed from a financial standpoint and when it comes to the law. But unfortunately, establishing HOA best practices can be a struggle for new associations, especially those in their first or second year at most. If you are trying to establish your first governance framework or change policies on a well-established association, here are several key items you should consider reviewing each year as part of your annual general meeting.
The best way to ensure that your HOA stays solvent and doesn't run out of money is to be proactive. Your board should review the budget plan each year, prior to the budget being set. Only by going over your finances together can you make sure that everything is on track and in order.
Emergency Action Plans
Your community association's board of directors should review emergency action plans and evacuation procedures with members at least once every 12 months.
The emergency action plans, which are required by law in most states and jurisdictions, include evacuation procedures that allow residents to quickly and safely leave their homes during an emergency -- such as a fire or flood.
Reviewing your tax plan with your HOA board is a great way to ensure that you're on track for collection. You should discuss the amount of funds available for taxes, as well as any potential issues that may arise from the plan. The board should also discuss how the administration will handle levies and late payments.
When it comes to being a homeowner, most of us don't give much thought to the HOA (Homeowners Association) that controls the property where we live. But if you want to make sure your HOA stays in check and remains a positive influence in your community, you need to keep tabs on it—and that means reviewing the governing documents each year.
Details like how long your HOA board members are allowed to serve, what kind of notice you have to get before meetings and who can vote on certain decisions all need to be spelled out in your governing documents.
Your HOA should set a regular schedule of meetings that allow enough time to handle any issues that may arise between meetings. If you're not sure what this schedule should be, check your association's bylaws or articles of incorporation and/or contact your attorney for guidance.
Special Event and Holiday Schedule
Every neighborhood has different activities and events they participate in throughout the year. The most common events include neighborhood block parties, trick or treating during Halloween, etc. All of these events require a permit from your HOA management company. You will also need to be aware of which holidays you have off from your HOAs as well as parking restrictions and any other applicable restrictions.
Review your insurance policies at the beginning of each year so you can make sure you have the right amount of coverage. Look for things like:
Policy expiration dates
Terms and conditions that are too restrictive for your neighborhood (or not restrictive enough)
Review your policy renewal date to make sure you are getting the best price. You may also want to look into taking out a floater or umbrella policy that will protect you from additional liability.
These items should be reviewed by your Homeowners Association (HOA) quarterly or each year. If you have a home in a Homeowners Association, are thinking about buying a property in an HOA, or are thinking of starting a HOA I would highly encourage you to investigate this list to see if these topics are being discussed in the association. If they aren't, make sure your HOA Board knows that these topics need to be discussed and brought up at the next meeting.