62°F
weather icon Mostly Clear

Homeowner: Board isn’t making good financial decisions

Updated January 20, 2025 - 4:21 pm

Q: I have a question regarding our homeowners association reserve fund and our master insurance policy. What can homeowners do if they feel that the board is not making good financial decisions for their community?

We increased the budget in 2022 by community vote so we could fund the master insurance policy that is required by law. Last year we raised dues by 5 percent twice to keep up with insurance costs. Other than these increases, we have not increased dues in approximately 10 years. We have done nothing to address the reserve shortage.

Our current budget has our reserve fund at 32.7 percent at the end of this year. We have been paying a $35 reserve assessment for quite some time. The community has been warned by management and legal that the state is currently looking into HOA reserve funds.

Our management created a budget for 2025 that would have the reserve 55.4 percent funded by the end of next year. It includes a 10 percent dues increase and a $1,500 reserve assessment for the year. This was based on the 2025 reserve study draft that the board received in August, but still hasn’t adopted. The board rejected that budget outright and has approved one that they created. Their budget reduces the monthly dues by $5 and raises the reserve assessment to $50. This raises our dues by $10, but actually reduces our reserve funded to 26.2 percent by the end of next year. I think this is unacceptable. I realize that the community would probably reject a budget with a large assessment, but shouldn’t the board be trying to increase our reserve budget?

Some homeowners are concerned that the board is not making good financial decisions. Can you offer any advice?

A: Find association members who understand the dynamics of association management and encourage them to run for the board of directors.

Boards need to develop a strategic plan for their association, which includes the yearly funding of their operations, meeting their reserve goals and maintaining the physical integrity of the common elements. In addition, find board members who understand the needs of their membership.

Barbara Holland, CPM, CMCA and IREM chapter president-elect, is an author, educator and expert witness on real estate issues pertaining to management and brokerage. Questions may be sent to holland744o@gmail.com.

MOST READ
In case you missed it
Don't miss the big stories. Like us on Facebook.
THE LATEST
Big dog exceeds HOA’s pet guidelines

The issue is whether the new homeowner’s dog is covered under the Fair Housing Act (FHA) for emotional support animals for people with disabilities under Section 504, reasonable accommodations.

Can HOAs use drones to enforce regulations?

There are currently no Nevada Revised Statutes 116 laws pertaining to the use of drones within anassociation community.

A review of things that can get HOAs at a NRED hearing

This is part two of my coverage of what kind of allegations of violations the Nevada Real Estate Division has held commission hearings on.

A review of proposed laws that would affect HOAs

This is the second part of an ongoing series of columns addressing the bills before the Nevada Legislature that will affect homeowners associations.

Understand your legal obligations as HOA board member

Is your association or management company next to face Nevada Real Estate Division at a commission hearing? Here are some of the allegations or violations that were heard by the commission.

A look at proposed bills that would affect HOAs

Well, it’s time for the Nevada State Legislature to place into the bill hopper new laws that impact the homeowners association in our state. As of the publishing of this article we will not know which ones of the proposed bills will make it to the floor for both houses of our Legislature. Here are some of the proposed bills.

Corporate Transparency Act no longer in effect

This recent action is interpreted to mean the Corporate Transparency Act and its reporting requirements are no longer in effect for U.S. citizens or domestic reporting companies, including all applicable community associations.

Homeowner wants recycle bins in condo community

There are no laws requiring an association to have a recycle container. Attend the next board meeting, during the homeowner forum part, ask if one of the board members would at least research the cost of having a recycle bin.

Flooded condo repairs cause more problems

First, do contact the the Nevada State Contractors Board and ask them to send an investigator to look at the work. The work may have met codes even though in your opinion the work was subpar.

MORE STORIES