Find the Money You Need for Your HOA Projects

It happens to every homeowners association at some point in time: a project pops up that urgently needs to be completed but that you have not budgeted for. Not doing it is not an option but you’ve got to find the money. This can be a tough place, but you always have choices.

Unplanned Projects and Issues That Require Extra Funding

If you’ve never had a sudden project pop up, it can be hard to imagine it happening. Urgent needs usually come from the following situations.

• Emergencies. If there’s a bad storm that causes damage to community property, it’s the responsibility of the HOA to make the necessary repairs. You might need to replace a roof after a hurricane or remove dead trees and other fallen debris from the property.
• Urgent repairs. Sometimes, you find urgent repair needs while doing regular maintenance. If there’s dry rot in the roof of your clubhouse or termites in the walls of a common area, you’ll need to fix that fast.
• New legislation. New laws can enact requirements that mean you have to do work on your community. Maybe you have to update for handicapped access or upgrade for electrical safety.
• Community add-ons. Your members might decide that they want tennis courts or a new clubhouse. If they vote to add on to your community, it’s up to the board to figure out how to pay for that update.

How to Find the Funds You Need

There are a few options when it comes to raising the necessary funds to take on an unexpected HOA project.

• Raise member assessments. Your state’s laws will dictate how much you can raise assessments without a full vote. If you need more money and you foresee that need continuing, this is one of the best ways to make sure the association has the cash it needs.
• Borrow from reserves. Your reserve fund exists for situations just like these. However, if you borrow from the fund, you usually have to set up a repayment plan and show that your HOA can keep up with that. When you need money urgently, though, it’s good to know the reserve fund is there.
• Call for a special assessment. If your need for funds is a one-time thing and will not be ongoing, call for a special assessment. Depending on how much you need, you may have to hold a membership vote to get this done.
• Get a loan. If you need more money than you can take from your reserves or get from your membership, it’s time to take out a loan. This may require you to raise assessments, too, to ensure that you have the money to pay it back. It will also require a vote of the membership.

If you need help raising money for an urgent need or a special project, contact us at AMI. We’ll help your board get the money it needs to maintain and improve your community.