Can it be done? Absolutely.
Here’s how to cut costs in the HOA (also known as Community Association) and get out of debt:
- Review the HOA collections policy. Can the policy be revised to allow a shorter timeframe between collection letters while upholding state statutes?
- Review current vendor contracts. Are the Community Association vendors providing all services as outlined in the contract?
- Can contracts need to be renegotiated? A longtime vendor may be willing to provide the HOA with an annual credit for the services. For example; a landscape contractor may credit the HOA for annual flowers or the pool company may provide one month of credit after 12 months of service. Possibly your vendors would be also willing to help the community offset some resident event costs.
- When was the last time HOA assessments were increased? Keeping community assessments stagnant while the association costs are increasing, may potentially put the HOA at risk for a special assessment to cover costs.
- Understand how (and why) your reserve study is completed. Are reserves funded enough to support capital repairs and replacements as necessary, or per the verbiage within the reserves study?
The Community Association can make a few changes, to put money back into the HOA:
- Change outdated irrigation components to smart water controllers.
- Change irrigation heads to pressure regulating heads to save water costs with a modest return on investment timeframe.
- Convert areas of turf to xeriscape. Check with your city first, there may be a rebate available!
- Check with your city if any preservation grant matches exist for Community Association improvements.
Take these steps to start turning the tide on your HOA’s debt management. Contact us if you’d like help from our HOA Accounting department.
