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When the HOA hires a property management company, that company is usually in charge of most of the accounting for the association. The HOA manager collects the monthly assessments and keeps track of who is paying on time, who pays late and gets a late fee, and who is delinquent and subject to contact by a collection attorney. The manager also has to pay the monthly bills such as insurance for buildings as well as lawn and snow maintenance. Sometimes, the water bill is also paid by the Association depending on the governing documents of the townhome association.
Other monthly bills include paying the management company, any attorneys the association works with, accountants and other professionals. The HOA manager keeps track of the two bank accounts that every association needs to have. The first is an operating account and the second is a reserve account. The reserve account is like your savings account. The HOA will put away money for capital improvements and major projects, such as a new roof. The manager also has to be involved in long range planning. If you know that a roof has a life span of 15 to 20 years, you need to put away a specific amount of money into the reserve account so that when the roof does need to be replaced, you can pay cash instead of doing special assessments or coming up with a larger monthly dues over a shorter period.
Finally, the HOA manager also helps to coordinate and plan the annual budget, which includes how much the HOA puts away every month or year. There’s also the help that’s provided in coordinating all the documents sent to attorneys and accountants, and doing taxes on an annual basis.
This is an overview of how HOA management is constructed. If you have any questions, or you’d like to hear more, please contact us at 33rd Company Property Management. We can help you with your HOA/CIC Property Management Minnesota needs!
