HOA yearly fees

For 34 years HOA has been collecting from aprox 177 family Units, accumulating $176.000 each year.

To my knowledge, they never been audited.

They collect $30,000 just for snow removal even though we had no snow last year.

It doesnt look like the community is properly maintained (ie: sidewalks cracking, trees growing out the wazoo etc...) for the amount of money they been collecting each year.

I looked on portal site, I dont see a detailed explanation for the costs, such as trash removal, snow removal, lawn care etc...

I dont see any copies of vendor contracts etc...

It said they had $2,900 in checking at the end of 2020 but the fact they collect aprox 176,000 each year, I thought they would have more.

So I guess, my question is... do I look into having a public auditor to see if the hoa is being honest with the funds being collected, since its such a large amount?
Or should I just keep assuming everything is well to avoid future headaches?

You do realize your HOA is a non-profit? So you don't really want to see any left over money in the bank account. The HOA is to collect as much in as it spends. This isn't how you do your banking. It can have a savings but that is more of a reserve fund for large capital projects.

So what are you trying to find here? Just because not much in the bank doesn't mean something isn't right. It may mean it is exactly right...

Info dump below!!!

* Assessments must cover both routine maintenance (operating expenses) and repair/replacement of the big ticket items such as streets and other amenities (reserve expenses). The checking account will be for operating expenses, and you shouldn't see huge amounts of money in there - the bulk of the HOA's monetary assets will be in the reserve accounts, which will probably be invested in things like CDs or Treasuries.

* There can be many reasons that a community isn't being well maintained. Usually it boils down to assessments being kept too low so the money just isn't there. Second on the list of explanations is a board that isn't particularly skilled.

* HOAs located in the snow belt often budget for an "average year" since there is no way to predict what you'll need when the budget is being developed. Some years you'll spend more than budgeted, some years less. Very normal.

* Your HOA should be audited regularly and your bylaws may require it. That said, I doubt that a public auditor would look at an HOA's books since an HOA is a private, not public, corporation - it's up to the HOA's board to hire an auditor.

* It's not unusual for an HOA *not* to have things like contracts available for viewing on your web site. I would expect to see information such as monthly financials, copies of board meeting minutes, copies of your governing documents, newsletters, and the like.

* Nearly all state laws say that homeowners may view contracts and other documents, though, so you should do a formal written request to inspect these. Links to Maryland's applicable laws here: https://www.hopb.co/maryland. In particular read the Maryland Homeowners Association Act, because it should tell you what HOA records homeowners are entitled to inspect.

* I don't recommend assuming everything is well. HOA boards range all the way from "competent and responsible" down through "don't know what they're doing" all the way to "actively dishonest". HOAs rely on homeowners to keep boards honest, and if homeowners don't like what they're seeing, it's up to them to elect board members who are up to the job.

* Read your governing documents thoroughly - these include the Declaration or Covenants, Conditions and Restrictions and the Bylaws. You'd be amazed by how many people don't bother to do this until there's trouble. Unfortunately this can include board members.

* Attend board meetings so that you know what's going on. Ask questions. And talk to your neighbors - they may also have concerns, and if you're going to have to take steps to get the HOA back on track, you'll need allies.

* Straightening out an HOA is a LOT of work and can involve significant time and stress for those who have to do the work. Money, too, if you'd need to hire a lawyer to get things moving. Fortunately most things can be sorted out without involving lawyers.

Ive been emailing the property manager, she picks and chooses what she wants to tell me.

Ive learned the checks being collected from Bel Air, Md are being mailed to a lock box/Bank in Las Vegas Nevada
I was told its because the Bank specializes in HOA accounts.

But Ive read a lock box should be near the community to reduce mailing time.

Do you have a board of directors and have you asked them directly for this information? Assuming you do, my personal opinion is you are asking the wrong person. Especially since you are getting no where.

Not uncommon for an association to use non-local banks for dues collections and payouts. Some bank specialize in this and generally issue extensive Financial Reports that a PM uses to put together Monthly Financial Reports. An association is a Corporation and as such must produce a Yearly Financial Report. Ours are available to any member asking for such.

PM are hired and fired by the BOD PM's are not in charge, The BOD is. Direct your issues to the BOD. not the PM.

You do get a return - interest and whatnot is typically reinvested in the reserve accounts and can be spent along with the regular contributions.

But, as I'd mentioned before, returns on fixed income accounts are extremely low now, so we don't rely on these returns to boost our reserve funds very much. If you're paying any kind of "wealth management" fees, these fees almost certainly exceed whatever return you're getting on your money unless your money is in high risk investments which it absolutely should not be.

Donald,

Get off the HOA internet board and talk to your HOA board members about understanding your local budget. Seriously. We can help, advise, direct, agree and disagree after you've done your due diligence.

Looking at fund balance sheet Reserves, what does anyone think of or make sense of these numbers...
Fund Balance Sheet:

Reserves- Unallocated $167,000

Reserves- SWM Fund- $116,000

Reserves- interest $6,000

Reserves Due- $18,000

Reserves Tree Service- $21,000

Reserves SWM Expense Paid- $7,600

Retained Earnings- $34,000

Total Net Income Loss- $16,000

Total Equity... $246,000

Total Liability & Equity... $252,000

Without knowing what your last reserve study said or how much common area the reserves have to maintain, I don't know if you're on track or not. But, making educated guesses here:

Reserves- Unallocated $167,000 MONEY IN RESERVES THAT HAVE NOT BEEN EARMARKED FOR A PARTICULAR PURPOSE

Reserves- SWM Fund- $116,000 THIS IS MONEY IN THE "WEALTH MANAGEMENT" FUND

Reserves- interest $6,000 INCOME EARNED ON YOUR RESERVE ACCOUNTS

Reserves Due- $18,000 PROJECTED DEPOSITS (for the remaining year?) (I assume this isn't money due to be paid out since I'd expect that to be labeled "Payable" and to show as a negative number. But I could be wrong.)

Reserves Tree Service- $21,000 MONEY EARMARKED FOR TREE REMOVAL OR OTHER UPKEEP

Reserves SWM Expense Paid- $7,600 PROBABLY THE FEES YOU'RE BEING CHARGED BY THE "WEALTH MANAGEMENT" FUND (Note that this exceeds the interest you're earning. As I'd mentioned earlier, I firmly believe that it's ridiculous to pay for investment advice/management when your money should be in fixed income investments such as CDs, money market accounts or Treasuries. This would burn my britches if I were in your community.)

Retained Earnings- $34,000 THIS AMOUNT DOES NOT INDICATE HOW MUCH CASH THE ASSOCIATION HAS, BUT SHOWS HOW MUCH UNALLOCATED CASH IS ON HAND. IT'S A CALCULATED FIGURE. (I'd need to see your entire financial statement to see where it's coming from.)

Total Net Income Loss- $16,000 I ASSUME THIS REPRESENTS A LOSS IN INVESTMENT VALUE, BUT I'M NOT 100% SURE. IF THAT'S WHAT IT IS, THAT SUGGESTS THAT A PORTION OF YOUR RESERVES ARE IN HIGHER-RISK INVESTMENTS THAT CAN LOSE PRINCIPLE. WHATEVER THIS IS, THE ONLY "LOSS" IN YOUR RESERVES SHOULD BE FROM MONEY THAT IS SPENT ON PROJECTS.

You should certainly ask your board why they are investing in a "wealth management" account and what types of investments the money is in. You could easily be paying a fee to lose money. I did this sort of work for a living and know how to make money in the stock market, and I would never put HOA money into anything but fixed income securities. I view that as a breach of the board's fiduciary duties. It may *maybe* make sense for one of the high-end developments with multi-million dollar operating budgets and gazillions in the reserves, but it doesn't sound like that's what we have here.

Thanks for everyone's replies for helping me understand more, especially this...

Ive been talking to my neighbors that also express concern about our hoa, and Im going to share this with them, so they can have a little more clear understanding as well about what all of this means.

SWM Fund also came up as "Swarm fund", even more confusion..

This is not a correct statement. The yearly budget should have two components, one for expenses on a monthly basis, done within the twelve months and a reserve expense line item for money deposited into a reserve account for projects that are done on an annual basis or longer, which should be identified in a reserve study.

Many associations don't account for this reserve expense and leave the money until the end of the year and in some instances the owners will vote at an annual meeting on what to do with the excess monies, whether to rollover or refund back to the owners.

The reason for my SWM Fund confusion is...

The statement shows 3 sections...
in top section, I see (a 4 digit number)- BAS AAB-SWM reserves

Then at the bottom, I see a (different 4 digit number) Reserves- SWM Fund

This is why Im believing the SWM at the bottom is not referring to Storm Water Mgmt, because the bottom SWM is a different (account?) number and doesnt have the BAS AAB in front of it, but I could be wrong, thats why Im learning.

but different account numbers and letters are in front of the SWM on top of budget sheet than bottom. I wouldve thought they would say the same and have same acount numbers (im assuming the 4 digit numbers in front are account numbers)if they both reffered to the same thing