Budget Season is Upon Us – Is Your HOA Prepared?
Budget season can be a headache, but with the right preparation, you can make the process as pain-free as possible.
To help your Board through this year’s budgeting cycle, we’ve compiled some tips to help you prepare your community for budget season. As your HOA enters budget season, it is important to understand your budget process. This includes understanding:
Your financial status (e.g., what funds are available and how much room you have to maneuver);
The rules and regulations that govern your community;
Your board members (and how they will approach the budget); and
The needs of residents within your community; and
The process for getting the budget approved.
Communication is key. When it comes to your Association – communicating with all parties (board members, the community and its members, your manager, your association’s attorney, and accountant) is an imperative part of the process.
The board members are a great source of information about what’s going on in the association. Together with the manager, your Association should have a list of obligations and action items for the next year (and really, the next few years!). You should be aware of any upcoming changes or events that will affect homeowners and/or residents during budget season. Your manager will also be able to provide insight into what other Associations have done or are doing in similar situations and may be able to recommend solutions that might work for yours as well (or tell you why they won’t).
Communicate with residents: Residents should be informed about budget season before it happens so they know what will happen next year if their Association does not have enough funds left over from this year’s budgeted activities (like landscaping maintenance, snow removal, or other common element maintenance).
Provide residents with a clear explanation of what the budget is, how it works, and why it’s important. You should give them the opportunity to ask questions and provide feedback on what they would like to see happen in the community over the next year.
Budget season can be a headache, but with the right preparation, you can make the process as pain-free as possible. And the more prepared you are, the better off your community will be when it comes time to make those big decisions about spending and saving. If you have specific questions about your Association, feel free to reach out!