Are Your HOA’s Funds Being Properly Handled and Invested?

The management and operation of a homeowners association (“Association”) results in the Association coming into possession of large sums of funds to cover operating expenses and HOA reserves. Over a period of time, the reserve for HOA funds can grow to a very large amount of money and decisions that are made by Association directors concerning how those HOA funds are handled can have a tremendous impact on an Association.

State laws and/or an Association’s governing documents may include provisions that specify rules and policies about the handling of the Association’s funds. Association members and management personnel should be aware of what the existing laws and/or rules and policies provide. If an Association does not have a specific policy for the handling and investment of its HOA funds, it is a good idea to consult with an appropriate experienced professional (typically legal or accounting) to create one. This will ensure that the Association’s funds are treated consistently from year-to-year and that Association directors, managers, and members are aware of and understand the policy.