All About HOA Docs

Meeting Minutes:

These are “notes” from the most recent HOA meeting. These are important because they reveal issues that are pending, or are in process. The Meeting Minutes provide a glimpse into the future to see what the HOA has been discussing. Many times these discussions center around improvements, changes, updates to rules, and most importantly updates to the HOA financials, budgets and costs.

Budget:

This shows how the finances of the HOA are projected to be handled going forward. The Budget is usually based on last years Financials, and any adjustments (up or down) are made to cover increased maintenance costs, energy bills, or needed repairs.

Financials:

This document will show you the Balance Sheet and Profit & Loss Statement. These are very important. You should think of the HOA as a company that you will soon be a member of. It needs to be profitable to run efficiently and effectively. Sometimes the Financials will also include a report of how many members are behind in their HOA dues, if any.

ByLaws:

The Bylaws are the guidelines for the operation of the HOA. The Bylaws define the duties of the various offices of the Board of Directors, the terms of the Directors, the membership’s voting rights, required meetings and notices of meetings, as well as other specific items that are necessary to run the Association properly.

Declarations (also referred to as Covenants, Conditions, & Restrictions, or CC&R’s):

These are the governing legal documents that set up the guidelines for the operation of the planned community as a non-profit corporation. They were recorded by the County recorder’s office of the County in which the property is located and are included in the title to your property. Failure to abide by these may result in a fine to a homeowner by the Association.

How is the amount of HOA Dues determined?

The Department of Real Estate typically requires an initial budget from the developer for each community that a developer proposes to build. This budget is set upon specific guidelines for utilities, landscaping, administration, etc. Reserve funds are funds set aside for future expenses due to the life expectancy of certain items: common area lighting, common area maintenance, street / parking lot resurfacing, pool equipment, etc. These amounts are then divided by the number of units built in a given phase of the development. Subsequent budgets are developed by the Board of Directors and adjusted periodically to meet anticipated expenses.

Will my HOA Dues go up?

Yes, more than likely they will. HOA dues are not “fixed” like most mortgage payments. As energy (power, gas, etc) prices rise so will your HOA dues. The cost of maintenance (cleaning, landscaping, etc) will also go up which will cause your HOA dues to rise. The cost of insurance will also rise over time (just like any other insurance) which will also cause your HOA dues to increase as well.

For a deeper dive, click here to access Colorado’s resources on HOA’s.