A budget for an Association is just an estimate on how much the Association anticipates will be spent on particular items for the year ahead.
There are many factors to consider when putting together a budget as amounts fluctuate and there is not always a contracted amount. So, it is best to look at historical data when working on an Association budget. You should keep in mind the Board’s “wish list” and incorporate any as you are able to. You should definitely add past unbudgeted items (ie, graffiti removal) and separate repair items from maintenance items that were not factored before (ie., gutter repair versus gutter cleaning).
1. Create your income line items. These should include only guaranteed income such as:
We do not recommend budgeting late fees and interest to Associations as that is not guaranteed income. You never want to rely on paying the bills with a questionable income source.
2. Create your expense line items. These should include the things like:
Of course, you can never tell exactly what could come up the next year, so we always advise to budget a small contingency amount. Make sure you work closely with your Diversified Association Management manager to prepare the draft budget and review all necessary documents regarding budget notification timelines. Careful consideration of Assessment increases should be given; make sure it falls in line with the requirements or that you are prepared to go to the owners for a vote.
In the end, you should have a balanced budget with no profit or loss. This year, we are presenting all of our budgets to include the YTD figures, projected end of year amount and a comparison evaluation from the prior year budget to the proposed budget for next year. We feel this will allow our Board’s to better understand the budget and assist them in making more knowledgeable decisions when approving the budget.
No matter what your budgeting needs are, Diversified Association Management can help
When one purchases a home within a homeowner’s association, the sense of community should already be upheld and welcoming for any new home owner. Diversified Association Management not only helps maintain the standards for each HOA, they create the community within their everyday lives as well. Being a community is sustained by each homeowner following the rules and regulations to continue creating the vision of the HOA. These policies range anywhere from convenient enforcement, architectural control, and most importantly the collection policy of assessments.
Once Diversified Association Management is hired on to an association, it becomes our job to uphold these policies. The collection policy is of most important to make sure each homeowner is aware of their assessments being delinquent if applicable. Assessments are put in place for the expenses the association incurs to make sure the community’s appearance is up to standards, maintain recreational amenities and in general, to create a beautiful hometown for their homeowners.
Not all collection policies are the same, but most assessments are due on the 1st of the month. Some Associations give a grace period for each homeowner to pay their assessments. If payments are not received after the grace period given, a late fee may be applied as well as interest. A delinquent homeowner will then be notified of their missed payment. It is Diversified Association Management’s responsibility to communicate with the homeowner of past due balances. The law then puts the ball in the homeowner’s court to communicate with the HOA/management company in terms of paying their assessment.
Communication is key within a community; Diversified Association Management keeps that door open.