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It’s Budget Season! Now What?



As a
n Association Manager, one of our most critical responsibilities is helping our Boards prepare a sound, forward-thinking budget. A well-prepared budget not only ensures the financial health of the community, but also reflects a proactive approach to long-term planning, maintenance, and homeowner satisfaction. The budgeting process may seem daunting, but with the right structure and a bit of prep, it becomes an opportunity to add real value and lead your Board through another successful year of management.
 

Here are some of the essential steps for creating an effective budget for your HOA or condo association: 

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HOA Budgets and Landscaping



Investing the time to find the right landscaping partner during budget season.

There is a financial aspect, as landscaping often eats up a large portion of the HOA’s budget, and the quality of that service directly impacts residents’ satisfaction and the property's overall value. Landscaping can represent a significant percentage of the total HOA budget, with estimates ranging from 25% to 75% depending on community size and expectations.

Investing the time to choose the right vendor, who not only fits the budget but aligns with the community’s values, can save headaches down the line. It’s about finding the right balance of cost, quality, and reliability. By carefully planning the budget and following a structured process for selecting and managing landscaping vendors, HOAs can ensure their communities remain beautiful and well-maintained while also safeguarding their financial well-being.


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Budgeting from a CPAs Perspective



Budgeting for
a community association can be challenging.  It requires balancing the desire to keep assessments low with the need to cover the day-to-day expenses and accumulate funds for future major repairs and replacements.  As auditors, we regularly compare association budgets to actual financial results Sometimes, the numbers line up well.  Other times, budgets fall significantly short—or, in rare cases, end up being more than necessary.  Here are some of the top budget-blunders we see:
 

  • Ignoring Bad Debts:  It’s common for associations to fail to consider bad debts in the budgetThe budget for assessment income is based on the assumption that all owners are going to pay their assessments when dueHowever, for many associations that isn’t the case Boards should consider the historical delinquency rates and include an appropriate bad debt expense line item in the budget.   



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Budgeting for Community Organizations



The annual budgeting process for a Community Organization
can incorporate three different budgetsYou have a replacement budget (Replacement Reserves), an annual budget, and a budget for non-annual non-replacement items (Operating Reserves)Some of these budget items may not apply to all associations. 
 

The budget can be prepared either by the Association Manager or by the Association’s Treasurer. 

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Managing Dirt, Navigating New Development: A Community Manager’s Guide


Developing a community is more than just breaking ground and laying foundations- it’s about shaping an environment where residents feel secure, engaged and invested. As a community manager, navigating new developments requires careful planning, effective communication, and strategic problem-solving to balance progress with sustainability.

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Get the most out of your community playground, safely!


Playgrounds are a wonderful addition to any neighborhood. Playgrounds help foster a sense of community by giving residents a convenient way to connect with neighbors while their children play and burn off energy—often year-round, thanks to Virginia's mild weather. Most importantly, playgrounds offer a space for kids to take risks and explore boundaries safely. 

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Dirty Feet

Particular times and events stand out in my mind as I mature (age; I’ll never grow up).  “Dirty Feet” is one of them. In a former life, I often attended meetings at the BASF plant in Anderson, South Carolina. In the lobby hung a banner that read: DIRTFTET. After numerous visits and much brainstorming, I was at a loss in determining its meaning. Not being shy, I finally asked.

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AI: The Newest Member of Your Management Team

Managing an HOA can sometimes feel like juggling flaming swords while riding a unicycle. Between handling homeowner complaints, organizing meetings, and keeping up with ever-changing laws, it’s easy to feel overwhelmed. Enter AI, your new best friend (after coffee). 

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Building Strong Vendor Relationships: Best Practices for Managers & Business Partners

 

Vendor relationships are at the heart of successful community association management. Whether it’s landscaping, maintenance, security, or financial services, the quality of service delivered to homeowners often depends on the strength of the partnerships between community managers and business partners. These relationships, however, don’t develop overnight. They require careful selection, clear expectations, and ongoing communication to ensure they remain productive and beneficial for both parties.

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The Virginia Condominium Act Turns 50

While the recently celebrated Independence Day, that is not the only special occasion this summer. July 1 is the day that most new laws in Virginia take effect. The Virginia Condominium Act (the “Act”) was enacted on July 1, 1974. It superseded the Horizontal Property Act, which was enacted in 1962. Condominiums are purely “creatures of statute” meaning that without the laws permitting them, they would not exist. In other words, they are a legal entity created by statute. The Act is a legislative marvel, crafted by deep thinkers and innovators. It was a new breed. 

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Welcome to Budget Season: What It Means for Your Community Association

As the summer winds down and we approach the latter part of the year, it’s time for our community association to turn its focus to one of the most crucial tasks on our calendar: budget season. This period is not just about crunching numbers; it’s an opportunity to reflect on our achievements, plan for the future, and ensure the continued well-being and growth of our community. Here’s what budget season entails and why it’s essential for all of us.

Understanding Budget Season

Budget season is the time when the community association reviews its financial status, plans for upcoming expenses, and sets priorities for the next fiscal year. It involves several key steps:

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The Importance of Regular Property Inspections During Summer

As we enjoy the long, sunny days of summer, it's easy to get caught up in the season's festivities and relaxation. However, summer is also an ideal time for property inspections to ensure our community remains safe, well-maintained, and ready for the rest of the year. Regular property inspections during the summer months are crucial for several reasons, and here’s why they should be a priority for every community association.

Preventing Heat-Related Damage

The intense summer heat can take a toll on various aspects of our properties. Regular inspections help identify and address issues before they become major problems:

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Mid-Year Review: Assessing and Adjusting Your Community Management Strategy

As we reach the midpoint of the year, it’s the perfect time to take stock of our community management efforts. A mid-year review is essential for evaluating our progress, identifying areas for improvement, and refining our strategies to ensure we meet our goals for the second half of the year. Here’s a comprehensive guide to help you assess and adjust your community management strategy effectively.

1. Conduct a Performance Review

Start by analyzing the key performance indicators (KPIs) you set at the beginning of the year. These may include metrics such as:

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Summer Safety Tips for Community Associations

Summer is a time for fun and relaxation, but it also comes with its own set of safety concerns. As temperatures rise and outdoor activities become more frequent, it's crucial to ensure that our community remains safe and secure. Here are some essential summer safety tips for community associations, focusing on pool safety, firework precautions, and outdoor grilling.

Pool Safety

Pools are a centerpiece of summer enjoyment, but they can also pose significant risks. Here’s how to keep everyone safe while having fun in the water:

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Bringing Community Together

In a world that sometimes feels disconnected, the importance of community cannot be overstated. Community associations play a vital role in creating and maintaining a sense of belonging and togetherness among residents. These associations have the power to transform neighborhoods into vibrant hubs of interaction, support, and shared experiences. One of the most effective ways to achieve this is through organizing engaging activities that bring people together. Let's explore some activities that community associations can host to foster a sense of community:

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A Collective Experience

Living in an association is more than just sharing a physical space; it's about cultivating a sense of belonging and connection with your neighbors. While individual units may be separate, the collective experience of a thriving community enhances the overall quality of condo living.

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7 Best Practices for Choosing a Snow and Ice Management Partner

How to choose wisely and protect your property during storm season

1. It's Never Too Early

Don't wait. Whether you're looking to engage a snow and ice management provider or switching from one provider to another, give yourself at least three months to:

  • Properly vet providers.

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How to Reach a Quorum Through Proxies

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Annual and special meetings require homeowner votes for new board members, assessment increases, capital improvement projects, and amendments to the association’s governing documents. The goal is to reach a quorum—a minimum number of members who must be present for business to be validly transacted.

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CAI Releases New Reserve Study Standards for Community Associations

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Community associations should incorporate preventive maintenance and structural inspections into their reserve studies—the important budget planning tools that identify the components a community association is responsible for maintaining or replacing, indicate the status of the reserve fund, and provide a stable and equitable funding plan to offset anticipated future major common area expenditures. The recommendations are part of new Reserve Study Standards released by Community Associations Institute (CAI)the leading international authority on community association governance, management, and education.

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Fannie Mae and Freddie Mac: New Lender Requirements Take Effect

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In July, Fannie Mae and Freddie Mac released updates to project eligibility standards for condominiums and housing cooperatives.

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