New Treasurer Needs Advice

HI John,

I'm sure that many members of your HOA board are glad to see you volunteer for service. You might bring that proverbial "breath of fresh air" where it's needed. In reviewing invoices, your service will be valuable and you may bring a level of expertise that didn't previously exist on your board, especially regarding a heavy scrutiny of the ledgers. Your board may trust its property managers and that can be a good thing. People join HOA boards for various reasons. Sadly, it's often to spend money or participate in a debate club more than serve as neighborhood property managers or check expenses.

Suggestions......

1. Start your treasurer service with a clean slate. Looking back won't be of much help as you're still learning the position and that your initial review to set off any "red flags."

2. If your property management company is empowered to automatically hire repairmen, WATCH those expenses. I learned that people were calling handymen to move our roll-cart trash cans - $50 a pop - easy money earned by them.....lost money by our HOA. Those $75 basic calls add up handsomely and can get out of reason. PM's have preferred vendors and my sense is that these vendors tend to inflate their prices in exchange for being accessible when needed AND for having to deal with HOAs. Some companies hate working for HOAs.

3. Learn the vendors who, under service contracts, help maintain your property. It's nice to have a contact besides relying on your property manager to serve as a firewall between your board and the service providers.

4. If possible, solicit bids on rather large jobs using a board member in conjunction with the property manager's assistance. When I've had time to meet contractors of our HOA jobs instead of placing a call to our management company to handle all the bidding, our HOA has saved 30% to 40%. The property manager has never minded the assistance or that a resident actually meets a bidder at the property.

5. Remember that your property manager likely maintains several properties. They are a GREAT help but aren't an exclusive agent and won't be as efficient at helping you find the best job at the best price. (See your point about some expenses seeming high. They may or may not be high).

6. Determine if there is a dollar figure on a repair job's cost where the property manager can automatically hire a job without calling a board meeting. This can be helpful during small emergencies. Our HOA has a $500 limit. If a repair costs less than that, our property manager has discretion. Otherwise, the board needs notification.

7. Try to gauge the relationship between the HOA board and the property manager. Learn what budgetary recommendations have been made by the company and were ignored by HOA leadership. Ask what could streamline the work between the HOA and the management company. What concerns are possibly held by the management company's accountants about how money is spent in your HOA? Use that advice to chart your work in your new role.

8. Remember that your fellow board members may not understand what you're doing and may be feel threatened or diminished because the new board member wants to review the board's business. There is too much emotion in HOA board leadership. It's a little government that serves as some people's ONLY outlet of expression. I forget that one.

When "on the ground" handling HOA affairs - if other board members are rather apathetic or dormant - my rules #2, #3 and #4 affect the cash flow from my perspective in becoming a board president two years ago. As your communication with the property manager improves the personal level of trust, you will be as informed as necessary.

Good luck!

Don't forget to do your Associations taxes and make any 1099-misc, if needed.

There are time limits associated with these.

Tim