Year End Checklist for HOA Boards

Many HOAs in Denver, Lakewood, Aurora and the surrounding areas have fiscal years that run from January to December. So the end of the year can be a busy time, on top of the holidays. Here are some items for HOA Boards to keep in mind and get done before your fiscal year wraps up.

1. Finalize Your HOA’s budget and get it approved

Your HOA’s budget guides the HOA’s actions throughout the year. Take the time to review the budget thoroughly and be thoughtful about where and how the HOA is allocating funds. Be sure to be realistic with the budget – an overly conservative budget can lead to a shortfall later in the year.

Think of the budget more as a document that shows the HOA’s values and allocate funds appropriately – it may be that some items need more than an across the board 10% increase or decrease. The more thought that gets put into the budget, the more accurate and reflective of the community’s values it will be.

Last, your budget will need to be approved, either by the HOA Board or a vote of homeowners. Check your HOA documents to confirm what process needs to be followed. If you are a CAP Management client, you can always access your HOA Documents at: http://www.capmanagement.com/owners.

2. Review Year-End Documents

Banks, investment firms, and payroll companies will send year-end documents, often with summaries of the year’s activities. Be sure to review those documents and let your management company know if you find any issues. Also, send those documents to your property manager so they can incorporate them in your year-end financial report. Year-end statements are often separate from the December statement for the year, so you may receive two documents at the end of the year.

3. Be Aware of Contract Renewals and Plan for any Changes

End of year is also a time when many contracts either expire or roll over. Be sure to use this time to review those contracts and decide if you want to renew them. HOA Boards will want to be able to make an affirmative decision on contracts rather than be at the mercy of a roll-over clause.

Before terminating a contract with a vendor, however, HOA Boards will want to have a plan in place for service. You don’t want to have, for example, a trash contract terminated with no new contract in place; homeowners will not have service until the new contract is signed and executed. Use the time before year end to get these items in place.

4. Update Your Strategic Plan

Your HOA should have a vision for the long term. One way to achieve that is to have (and follow) a strategic plan. Here at CAP Management, we use a three-page strategic plan with one-month, two-month, and three-month goals. As an HOA Board, this model can be useful and expanded upon.

HOA Boards should also have some big picture 1-year, 2-year, and 3-year goals that are reasonable and achievable. These can be items from your reserve study, they can be putting in place and researching sustainability projects, or even as simple as wanting to centralize a list of planned improvements. Whatever form your vision takes, your HOA Board should have a written plan to execute your big picture goals.

5. Notify Homeowners of Changes

Lastly, year-end is when many changes get put into place. This can range from changes in assessment amounts to new board members. Be sure to follow your HOA’s rules on notifying homeowners of these changes and take the opportunity to let homeowners know how to run for the Board and who new Board members are. Many homeowners don’t even know that they can run for the Board – often they are under the impression that they have to live there for a certain amount of time or other qualifications. This will increase transparency and work to let the community know that the HOA Board is made up of people like them who care about the community.

By making sure that these items are done with care, every HOA and HOA Board in Colorado can set themselves up for success in the coming year.