Best Practices for Managing a Homeowners Association

If you live in a condo or TIC, like the majority of homeowners in San Francisco, you probably have a homeowners association (“HOA”).  HOA management can be complex, but with some planning and organization on the front end, can lead to a more peaceful living arrangement for years to come.  Here are some best practices for managing your HOA.

Best Practices for Managing a HOA

  • Keep clean records (accurate bookkeeping is often the most complicated practice to maintain)
    • CC&Rs, TIC Agreement, and amendments
    • Financials
      • Bill payment and invoicing
      • Collection and deposit of monthly dues
      • Monthly bank statements
      • Quarterly contribution analysis and adjustments
      • Co-owners open invoice tracking and penalty tracking, where required
      • Quarterly Budget versus actual tracking and reporting
    • Property maintenance
    • Purchase records
    • Annual property tax calculations and changes in tax rates
    • Annual HOA Meeting attendance
  • Develop a secure and consistent system with “checks and balances”
    • Set up a dual signature requirement for bank transactions
    • Do not rotate treasurer responsibilities; stick with the person who is best suited to the job
    • Prepare an Annual Operating Budget
    • Prepare monthly, quarterly and annual reports, and month-end reconciliations
    • Know exactly what is in the account at any given time
  • Undertake a Reserve Study of your property (this is the study of the reserve funds in your HOA to ensure there is enough money to support future projects)
    • The study should be in a clear format
    • It will enable you to ensure there are sufficient reserve funds in your HOA
    • Without this study, it will be more difficult to assess whether sufficient funds are being contributed

Source: Sam Clonmell, Bank of SF

If you need any help managing your HOA or finding an HOA manager, please reach out.

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