HOA Problems (HOA)


Why Homeowner Associations Get into Trouble


As a homeonwer association attorney with more than 25 years of experience managing community associations, I have concluded that the following are the most common causes of trouble for associations. 


  1. Inadequate assessments and reserves over a long period of time 
  2. Delinquencies leading to a loss of revenue 
  3. The developer leaves the association with an inadequate budget. Usually, expenses have been materially under estimated resulting in the accumulation of inadequate or no reserves. 
  4. The developer failed to pay its assessments during the marketing phase which goes unnoticed by its hand-picked management company. By the time the association becomes controlled by the buyers, it has inadequate or no reserves. 
  5. Construction defects are not adequately addressed resulting in higher than estimated repairs and maintenance. 
  6. Prior boards have made a poor choice of hiring contractors resulting in wasted money. 
  7. Prior boards have failed to get legal advice before making important decisions leading to costly errors. 
  8. Prior boards have made poor choices in hiring management companies who have provided poor advice to the board resulting in expensive mistakes. 
  9. Prior boards have made costly errors in purchasing insurance converage for the association which has resulted in not maximizing coverage. 
  10. Prior boards have deferred maintenance work which has resulted in more expensive, unnecessary repairs. 
  11. Poor management decisions have resulted in the loss of existing insurance coverage and the need to acquire replacement insurance coverage from a second or third tier company at substantially higher premiums. 
  12. Poor decisions have resulted in the association paying expenses that should have been paid by an owner or owners.


Do any of these points apply to your association? If so, let us assist you in developing a plan to turn things around.