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CwlW (Delaware)
Posts: 7
Posted:
Question about common accounting practices. Perhaps someone on this site may be familiar with my question.

I pay quarterly assessment fees, along with another yearly assessment fee to the same property management company. I pay all of my bills through an online banking account.

What aroused my curiosity, and concern was a recent monthly financial report sent out to all Board members. Which I noticed for the first time, the credit of $100.00 to many homeowners.

About 1.5 years ago, the owners had on option to send the PM $100.00 per unit, to have an outside vent cleaned out. After much research I discovered this was maintenance that should have been paid by our HOA funds. The PM, DID NOT return the $100.00 to the unit owners, nor did they show a credit on our quarterly billing statements sent out to homeowners. Is this a common practice with accounting principles? My common sense, tells me no, this money should have been returned to each homeowner in a timely manner, or take the $100.00 off of their next quarterly assessment, neither was done. My questions about this to the PM, were ignored, also ignored by my fellow Board members. We have a passive accountant on the Board, and a Treasurer who is as ignorant of accounting principles as I am.

As a result of the above, I went to my online banking page, and checked all of my payments to the PM, just out of curiosity. There is one assessment I pay annually. This amount of $500.00 was paid to the PM twice last year.

There was a name change who the payments were to go to, so inadvertently, I sent a double payment last October. I have proof through my online banking account this was done, and what date the PM cashed both of these checks.

Now, this PM, did NOT tell me I had made a double payment last October 2012, and I would have never known otherwise. Must check my account more often. This would or should be a simple problem to correct. However, this has been a consistent pattern with this PM and her handling of our HOA funds. I have been the only one to catch several errors on the monthly financial reports. I do digress.

My initial question is, how does your PM's handle overpayments, credits? What are common practices. As an example, I also made a double payment to a vendor last year, also another name change of their business, which I again must have programmed wrong in my online bank settings, and their office called me immediately to notify me, along with putting a check in the mail to me.

Any insights appreciated.
DavidW5 (North Carolina)
Posts: 565
Posted:
In our HOA many members, for reasons I cannot fathom, pay their assessments in advance. Some even pay a full year's assessments ($2640) before the start of the year. These show up on our financial reports as prepaid assessments. We have no way to distinguish who deliberately paid in advance from someone who accidentally paid extra. At the end of each year we send a statement to all members who have a non-zero balance on their account with instructions as to how to either pay any delinquency or request a credit or refund of any surplus.
TimB4 (Tennessee)
Posts: 21,053
Posted:
Cwl,

Although I am not a PM, I do serve as Treasurer for my Association.

We refund all over payments at the end of the year unless they were marked for the following years assessment.

Based on our records, this is different than what was done in the past. Before I became Treasurer, previous treasurers and bookkeepers simply brought the credit forward into the next year. They may or may not have informed the member of the credit.
LarryB13 (Arizona)
Posts: 4,099
Posted:
Cwl,

When I was on our board we fired our PM in large part because when they invoiced for our annual assessment they did not indicate the balance of the member's account. A person who owed, a person with a credit, and a person with a zero balance all received the same invoice. Our current PM allows us to look at our balances online and, of course, sends an invoice reflecting any balances.

You might improve your situation by having a CPA audit your books annually and you can definitely improve by finding a more professional PM. Look for someone who is set up to allow online inquiries and payments.

FredS7 (Arizona)
Posts: 927
Posted:
> In our HOA many members, for reasons I cannot fathom, pay their assessments in advance.

Not sure why you are surprised. The current bank interest rate is essentially zero, so there is nothing to be gained in waiting, and paying now gives peace of mind and absolute assurance of no penalties.
RogerB (Colorado)
Posts: 5,067
Posted:
First I hope assessment payments are made out the the association which are mailed to the management company and are not paid to the management commpany. DARCO management emails a monthly aged receivables report as well as a Balance Sheet, Income Statement, and Check Register to all Board members. This month we will be mailing a notice of the 2014 assessment amount and the current balance on their account to every homeowner along with coupons to those HOAs which request these. (Some homeowners like these as a reminder.) Included in this mailing will be the 2014 budget by month and total for year 2014, 2013, and variance. We believe it is very important to provide all homeowners with financial information periodically.
CwlW (Delaware)
Posts: 7
Posted:
Thanks for everyone's reply. Yes, it's my responsibility to keep an eye on my account. Will do this more often. Even though, the PM in my humble opinion, should have let me know about the double payment. Won't happen again.

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