Memo – Is Your HOA Doing Its Job?

Remember, they control part of your financial life.

Is your HOA living up to its current fiduciary responsibilities?

What if you want to sell your unit, but your HOA cannot provide the required information to the buyer’s attorney and mortgage company to do their due diligence?

The sale is over and technically your unit is now unsalable and worth $0.00 on the open market.

#1 Did you know?

Accurate records of income and expenses must be kept. 

For communities with over $100,000 in gross annual receipts, an annual CPA audit is required. If less than $100,000, it is every three years.

The New Jersey Condominium Act requires associations to maintain accounting records according to Generally Accepted Accounting Principles (GAAP) and make them available for inspection by unit owners

Is your board in compliance? 

Along with the CPA audit, demand:

HOA financial records, such as:

• • Budgets
  • Governing documents like the
    • CC&Rs (Covenants, Conditions & Restrictions)
    • Bylaws
  • Meeting minutes
  • Insurance policies
  • Contracts for services to understand the association’s operations and your responsibilities.
  • Financial Statements
  • Other Financial reports produced.

• Reserve, and

• Special Assessment reports to ensure transparency and proper management of community funds.

• Reserve Study and funding reports
  • A reserve study is a long-term financial planning tool that assesses the community’s assets and plans for future repairs and replacements.
    • Key components of a reserve report include:
      • Component Inventory: An itemized list of common area elements the HOA is responsible for, such as roofing, pavement, and playgrounds.
      • Useful Life Estimate: The estimated remaining lifespan of each major component.
      • Cost Estimate: An estimate for the future cost of repairing or replacing each component.
      • Funding Plan: A recommended multi-year plan for funding the reserves, determining the necessary annual contribution
• Full details of any litigation

#2 What are the rights of condo owners in New Jersey? 

Owners in New Jersey are typically granted several rights under the NJ Condo Act. Key rights may include:

• The right to vote in board elections and on other significant community matters 
• The right to attend open board meetings
• The right to access financial records, meeting minutes, and governing documents upon request 
• The right to receive proper notice before rule changes or assessment increases
• The right to petition for special meetings or proposed changes, depending on community bylaws

Don’t be bullied! The HOA board is there to serve you.

Are you being notified of board meetings?

Is your board ignoring you?

If you find they are not cooperative, take immediate action.

Suggestion, call your state’s department that handles consumer protection.

If you find malfeasance and neglect, call an emergency owners’ meeting to remove all board members and the president, vice president and secretary, and elect trustworthy ones.

Overwhelmed Running Your Business Or Filing Taxes?