Without money, your condo association is in deep trouble. Fiduciary duty is the only codified duty of a board member, and thus finances are your top priority. An association’s financial house can fall into disarray for a variety of reasons. It might be an apathetic board, a bad board, or simply a new Association that doesn’t know what to do. No matter what your situation, these actions will help you get your condo association finances in order.
Analyze and Rebid All of Your Major Contracts
Are you getting the best deal for your trash removal, housekeeping, or maintenance? Failing to rebid your contracts could mean you are not getting the best value. You should be rebidding your contracts every three years or so, even if you’re getting great service. This helps to ensure you’re getting the best rate possible and makes sure your vendors are working hard for you.
Clarify the Status of Your Reserve Study
Reserve studies are a foundational document that helps you budget in your community and keep special assessments at bay. First and foremost, make sure your community has one, and that it’s been updated within the last five years. In the event it has not been updated, or doesn’t exist, you need to carry out a reserve study as soon as possible. If you do have a recent study, make sure you’re actually following the budgeting recommendations it provides. If not – that special assessment might be knocking the next time something big breaks.
Conduct a Thorough Audit
Many Associations must be audited for tax purposes. However, if you’re looking to do a deeper dive, you can carry out an out-of-cycle audit to make sure everything is clean. This is particularly important if you’re changing management companies or suspect foul play. There are plenty of horror stories of communities who have faced embezzlement.
These are the First Steps, But Consistency is Key
These actions will help right the ship, but without careful maintenance and diligence, you may end up back where you started. Make sure your Board is taking your Condo Association finances seriously. You have a duty to spend Owner money wisely. Keep the finances clean and you’ll be leading a better Condo life.