HOA Spending

Started by TimothyH • 7 replies • 1754 views

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TimothyH (Texas)
Posts: 1

Posted:

OK, so the HOA officers in our HOA changed last year and so far things are OK.
However, the HOA has agreed to work on the front sign to make things look better.
During one of our member meetings various ideas were discussed and then later emails were sent out with the plan.

However, I know I mentioned during the meeting doing some of the work ourselves such as the landscaping which was dismissed almost immediately by the HOA officers. We are now being told that the cost to update the front entrance is costing $8K and some of the members took it upon themselves to do some of the work themselves without even telling anyone when they would be doing the work or seeing if anyone else wanted to help. It would appear they have paid themselves and were taken on the other work as $8K is way too much for what is being done. Many of the officers are new to the area and have shown they really don't know how to talk to people in this area.

The neighborhood is rather small with say 80 lots but only 10-12 houses so only those that own houses tend to participate. The new officers are some of the newest neighbors and for the most part are liked by the rest of the homeowners.

$8K is approximately 80% of what the HOA even has saved which has taken 10 years or so to accumulate.
I have suggested that we post the receipts on our HOA website in the forum where they can only be viewed by members.
To date, there has been no further discussion on this and I know we are having a meeting next month.

We are just a bit concerned that the money as not used wisely and/or was misappropriated for personal gain.

How would you approach this topic during the meeting?

Thanks

TimB4 (Tennessee)
Posts: 21,059

Posted:

I'd wait for the Treasurer to provide their report. If it's not broken down, I'd ask for an itemization of the entrance sign work, including who the payments were made to.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Quote:

Posted By TimothyH on 09/29/2013 5:41 AM
OK, so the HOA officers in our HOA changed last year and so far things are OK.
However, the HOA has agreed to work on the front sign to make things look better.
During one of our member meetings various ideas were discussed and then later emails were sent out with the plan.

However, I know I mentioned during the meeting doing some of the work ourselves such as the landscaping which was dismissed almost immediately by the HOA officers. We are now being told that the cost to update the front entrance is costing $8K and some of the members took it upon themselves to do some of the work themselves without even telling anyone when they would be doing the work or seeing if anyone else wanted to help. It would appear they have paid themselves and were taken on the other work as $8K is way too much for what is being done. Many of the officers are new to the area and have shown they really don't know how to talk to people in this area.

The neighborhood is rather small with say 80 lots but only 10-12 houses so only those that own houses tend to participate. The new officers are some of the newest neighbors and for the most part are liked by the rest of the homeowners.

$8K is approximately 80% of what the HOA even has saved which has taken 10 years or so to accumulate.
I have suggested that we post the receipts on our HOA website in the forum where they can only be viewed by members.
To date, there has been no further discussion on this and I know we are having a meeting next month.

We are just a bit concerned that the money as not used wisely and/or was misappropriated for personal gain.

How would you approach this topic during the meeting?

Thanks

I agree that the most efficient and "safe" work will be performed by professionals and at some expense to the HOA.

I disagree with residents performing work, on site, and getting paid for that labor

I agree with reimbursing residents for the cost of supplies as this is not compensation for labor (If they work on the HOA project)

Communication is the key challenge for your community in regards to this project. Someone was communicating enough to launch a project but you were left out of that communication loop. Bad for them because you want to be engaged. Make sure you get on those email lists.

Finally, if a project requires heavy manual labor - especially landscaping with its ongoing heavy maintenance needs - your HOA cannot afford the sign project. I think your project could easily cost $8,000. Not knowing your other community HOA amenities, this may be fine.

On approaching this matter, make ZERO allegations for mismanagement but inquire as to rules on paying HOA members or directors for labor as opposed to reimbursement. Tell them you want to help bring the project to life if they're recruiting member labor.

CarolR11 (Colorado)
Posts: 2,563

Posted:

Welcome, Timothy. I think you mean to say "directors" on the Board. I don't think you mean just the officers. Speaking of which, how many are there?

I have a couple of questions about the language that's being used, Timothy. Your wrote that:
You were told that the cost to update the front entrance was $8000. Who told you that? Was the info in the form of a bid?

You wrote that some "members" did some of the work. Are these members directors on your board? Or non-director homeowners?

Your governing documents may say whether or not directors may be paid for their labor. Like ours this might be in your CC&Rs. I'm with Kelly, reimbursement for supplies is different & from what I gather from this forum, isn't unusual in small HOAs. No reimbursement should be done without receipts. Generally it's best that the Board authorize the expenditure before spending the funds.

It sounds as if your HOA needs to raise dues. It took a really long time to accumulate $10k.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Tim

If $8K is 80% of your reserves then your association has some real down the road problems when other things need to be done. Seems you might need a Reserve Study done ASAP. It appears to me your association is or soon will be in some serious financial difficulty.

I for one do not like nor agree with owners doing work for free. If they are paid by the association then it also opens a whole other can of worms.

You association has to stop trying to do things on the cheap.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

You don't need a reserve study if entrance sign, lighting and landscaping is the HOA's sole amenity....we do need more information because $8k sounds low on the surface.

AnnH5 (Florida)
Posts: 304

Posted:

I just posted a question about volunteers and this seems to go hand in hand. At the end of the day, it is better to have professionals do the work. Depending on the scope of work, the HOA may even need to get permitting, and then if there is lighting involved, a licensed electrician might be in order. My experience has been that just because somebody offers to do the work themselves does not mean they are skilled to do the work. If he volunteers damage something in the process, this project could cost even more and then any savings by having volunteers is gone anyway.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Yes, Ann. You are correct. There are very few projects which I - as a board president - would endorse our residents to perform. Low-level painting and clean up projects come to mind. Landscaping is fickle and, in my experience, suffers a high failure rate depending on weather, etc.

The sign work and landscaping should be done by professionals and maintained in due order. It's expensive but smarter money.

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