Author: Richard Maritt

As a homeowners’ association (HOA) board member, it can be time-consuming to constantly monitor and enforce the rules when there’s so much more on your plate. That’s why it’s vital to foster an environment where rule compliance comes easily. When you have a set of rules that are necessary, transparent, effective, reasonable, and—above all else—legal, everyone benefits.

Serving community associations for 36+ years, we at CMA believe that informed homeowners have a happier association living experience. Download this ebook to access board tips for communicating with community members designed to encourage voluntary rule compliance and prevent violations in any community. Here’s one to get you started:

Create Easy-to-Read Versions of Important Documents

Governing documents, including rules and regulations, are often difficult to understand. Because confusion tends to lead to noncompliance, board members should help residents decipher the rules and regulations they’re expected to follow. Consider:

• Condensing the governing documents into a brochure or booklet. Providing the rules and regulations in a compact format keeps residents from having to dig through the governing documents for quick reference.
• Creating a maintenance matrix. By drafting a simple chart that indicates who’s responsible for tasks like maintenance, irrigation, and external painting, you’ll eliminate ambiguity and reduce violations.

As always, involve an HOA attorney to ensure accuracy and legal compliance. Distribute these items in your homeowner welcome packet, as handouts during orientation, or post on the community website, so they’re always easily accessible.

Download the ebook for more information!

Benefits of Rule Enforcement

When the Articles of Incorporation; Covenants, Conditions, and Restrictions (CC&Rs) or Declaration of Condominium, and Bylaws are enforced consistently, associations and their boards are able to:

• Preserve the aesthetics of an area
• Protect and enhance home values
• Enforce the community’s CC&Rs & Bylaws
• Maintain the property of the association and its owners

Homeowners’ association (HOA) rules, including guest policies, are part of community living. Not to discourage or prohibit, but rather to maintain order and harmony, HOA guest policies are essential to a thriving community. When inviting friends, family, and other guests over for a visit, familiarize yourself with your community’s guest rules to ensure a warm and enjoyable experience. Keep reading for details on what a typical HOA guest policy entails and tips for planning your next guest visit.

What Are Guest Policies?

A guest policy, or visitor policy, is a formal document that establishes the appropriate conduct for individuals temporarily staying in the community. These policies, which list a set of rules, will vary by association, but they may address short-term visits, overnight stays, and long-term visits.

Why Communities Need Guest Policies

Guest policies are meant to keep residents and visitors safe and preserve community well-being. Without a guest policy, associations may be liable for property damage caused by guests or face legal action for guest injuries on community property. Guest policies also:

• Protect association property. By holding guests and hosts liable for damage, HOAs help people be more mindful of their conduct.
• Prevent overcrowding and overuse of amenities. Amenities, like pools and fitness centers, can become busy, making it difficult for members to use them as intended. By limiting visitor access, associations allow residents to have priority use of the facilities.
• Decrease conflicts. An influx of visitors can exacerbate noise and parking issues. When followed, rules can minimize conflicts.
• Hold residents accountable. Residents are responsible for ensuring their guests are well-behaved. Rules set expectations and consequences for not meeting community standards.
• Mitigate insurance risks. Insurance policies may include provisions that raise rates based on homeowner/renter ratios and long-term guests.

The Most Common HOA Guest Rules

Every community is unique, and visitor rules may vary from one community to the next. However, three common guest rules apply to many associations. Here are guest restrictions to be mindful of:

Parking

Visitor parking regulations are designed to maintain aesthetics, promote safety, and keep property values high. Focusing on vehicles, parking, and traffic, common guest parking rules include:

• Parking area. Visitors may have designated parking spaces within the community.
• Parking pass or registration. Residents may have to register their guests’ vehicles with the HOA.
• Parking duration. The length of time a guest parks in a particular spot may be regulated.
• Type of vehicle. From golf carts to work trucks, the type of vehicle brought into the community may be restricted.

Amenities

Amenities are a highlight of association living. To maintain an enjoyable atmosphere, there are often restrictions on guest access in these common areas. Some tenant and guest responsibilities for amenity use might include:

• Registration. Guests may need to register to use amenities. In many cases, a guest may not use the amenities without their host present.
• Conduct. Visitors may be subject to the same rules as residents, such as no running near a pool.
• Age. Just like the children who reside in the community, younger guests may not meet the age limit to use amenities. In active adult communities, similar rules may apply, only allowing guests above the age of 55 to have access.

Noise/Behavior

Inviting guests to your home shouldn’t disrupt the harmony of your community. Always honor your association’s rules on:

• Loud parties or gatherings. Notify neighbors and community leaders of any events you’re hosting that could pose an issue. Noise complaints may lead to violations.
• Pet sitting. Pets can be guests, too! Ensure you won’t get fined for excessive barking, and consider your HOA pet rules and animal behavior before signing up to pet sit.
• Quiet hours. Communities may enforce quiet hours during certain times of day, and policies may limit music at parties, disruptive conversations, and outdoor entertainment.

Overnight Stays: What You Need to Know

Whether you’re inviting a group of friends over for a sleepover or welcoming out-of-town family during the holidays, households often host overnight guests. If you live in an HOA, there may be rules for overnight guests, including:

• The number of people staying. Associations may limit the number of guests you can have in your home at one time.
• The length of the stay. A guest may stay overnight for a specific amount of time before the resident is required to notify the HOA of an extended stay.
• Consecutive nights. Similar to the length of stay, guests may only be allowed to sleep in a homeowner’s residence for a certain number of consecutive nights before they must leave the association, resetting the time limit put in place.
• Overnight stays. HOAs have rules and regulations that can limit how homeowners rent out their property for overnight visitors.

Consequences of Violating an HOA Guest Policy

The governing documents typically outline the HOA’s enforcement of guest policies. In some cases, a visitor rules violation may directly impact the visitor themself. For example, a parking violation could result in a ticket or the towing of the vehicle. In other instances, the resident may face consequences for violations. The homeowner may be fined for property damage caused by their guests, consistent noise complaints, and other infractions.

How to Plan a Guest Visit to Your HOA

As a homeowner, it’s your responsibility to make sure that your visitors understand expectations and conduct themselves appropriately. For a rewarding guest experience, remember to:

• Read your governing documents. This is where you’ll find HOA guest policies and violation details.
• Inform your guests of the rules. Your visitors can’t follow the rules if they don’t know them. Consider sharing your community’s visitor rules with guests before their arrival or reminding them of relevant policies, such as parking locations and stay duration.
• Stick to community policies and procedures. If your HOA rules require you to register guests at the front office or park in designated guest parking zones, comply with them. By not complying, you risk incurring fines or more severe consequences.

Guest Policies and Other HOA Rules

A guest policy is just one part of an association’s rules and regulations. Include the policy in the list of other rules for your association.

Guest Policy FAQs

Can HOAs restrict guests?

Yes, homeowners’ associations can enforce guest policies, but they must do so within existing legal boundaries. For example, HOA guest policies must be nondiscriminatory and reasonable enough to be followed and enforced.

What are the rules for guest parking in an HOA?

Specific rules on guest parking will vary from association to association, but HOAs typically will regulate where and how long guests can park. Parking will also usually require registration.

What happens if my guest’s car is towed?

Revisit the area where the guest parked, and look for towing signage. Towing signs usually include the name of the towing company, its address, and a phone number to contact when a car is towed.

What are the most common and complained-about HOA violations?

HOA violations related to property damage, parking, noise complaints, and illegal short-term leases are among the issues that cause the most conflict in community associations.

About the Author

Rosa Henao, CMCA®, is a portfolio community association manager. Supporting various association boards as a credentialed manager, her industry expertise includes governance, compliance and enforcement measures, communication strategies, project oversight, and much more.

The board of directors is an important—and required—aspect of any homeowners’ association (HOA). Comprised of elected volunteers who live in the community, the HOA board is responsible for overseeing the community’s operations and setting it up for long-term success. A critical role, board members have a duty to act in the community’s best interest when making decisions for fellow residents—a fiduciary duty.

Keep reading to learn more about what fiduciary duty means and the fiduciary duties of directors.

What Is a Fiduciary Duty?

The fiduciary duty of board members is a legal responsibility to act in good faith on behalf of a person or group that relies on you. This relationship typically exists between an individual in a position of power or authority and those affected by that individual’s decisions.

An HOA or condo board member’s fiduciary responsibility is to help the association succeed while adhering to the governing documents. Homeowners put their trust and confidence in board members to protect the community’s quality of living, use funds wisely, and keep operations running smoothly.

To make sure you meet your obligations as a community leader, review your state laws and the HOA’s governing documents. The bylaws and Conditions, Covenants, & Restrictions (CC&Rs) should outline your responsibilities and authority.

 

What Are the Five Fiduciary Duties of Board Members?

Generally, the five fiduciary duties of board members include the Duty of Utmost Care, Duty of Integrity, Duty of Full Disclosure, Duty of Loyalty, and Duty of Good Faith. These five pillars act as a solid foundation to guide a board’s actions.

1. Duty of Utmost Care

Board members are bound to a high standard of responsibility to fulfill the tasks required of their positions. The duty of care means you must do your due diligence to make the most informed and reasonable decisions within your authority.

2. Duty of Integrity

The board of directors agrees to a code of ethics that requires them to act with honesty, fidelity, and professionalism. This includes following official HOA rules and processes, respecting homeowner confidentiality, and treating all residents equally.

3. Duty of Full Disclosure

The duty of disclosure means that board members must lead with transparency and be open and honest about what happens behind the scenes. The board should disclose all material factors influencing their decisions and impacting homeowners.

4. Duty of Loyalty

The board member duty of loyalty refers to the agreement to leave personal agendas and preferences aside to serve the community. There should be no conflicts of interest or intentional personal gains when a board member takes office.

5. Duty of Good Faith

The duty of good faith suggests that board members should always act in the best interests of the association. Every decision should be made to benefit residents within the confines of the law and HOA rules.

 

How Can a Board Live Up to Its Fiduciary Duties?

With strong leadership and dedication to the community, the HOA board can naturally live up to its fiduciary duties. Practice your board member fiduciary duties by prioritizing:

• Good communication. By actively listening and being open to feedback, you help build trust and transparency between the HOA board and homeowners.
• Forward planning. Anticipating association needs and getting ahead of issues can go a long way in keeping the community functioning at its best.
• Sound decision-making. Base decisions on facts, experience, and rational thinking to make educated choices on behalf of residents.
• Task delegation. Assigning responsibilities to association committees or partnering with a community management company can help board members avoid overwhelm and fulfill duties more effectively.
• Taking initiative. Addressing concerns right away shows your good intentions and loyalty to community members.
• Critical thinking. Board members must provide unbiased evaluations and analysis to solve problems affecting the association.
• Teamwork. Cooperation and compromise can help board members collaborate as they work towards the community’s goals.

 

What Are Breaches of Fiduciary Duty?

While most HOA board members do their best to serve their communities, some may fall short of expectations or take advantage of their positions. An HOA board member breach of fiduciary duty happens when that board officer fails to fulfill their legal responsibilities to the community—either inadvertently or intentionally. This can take many forms, such as:

• Board members refusing to work together
• Not adhering to the governing documents
• Ignoring state statutes or fiduciary duty nonprofit board laws

Examples of Breach of Fiduciary Duty

Some breaches of fiduciary duty are apparent, while others often fly under the radar and go unnoticed. Examples of a breach of fiduciary duty include:

• Using association assets for personal benefit
• Putting your interests before the community’s needs
• Making decisions outside of your authority
• Negligently managing funds or budgets
• Failing to disclose vital information to homeowners
• Encouraging conflict between residents
• Choosing sides based on personal preferences

Consequences of Fiduciary Breach

A board member’s breach of fiduciary duty can have lasting ripple effects on their community. On its surface, it can cause a break in trust between homeowners and the rest of the board, leading to suspicion and tension. The breach of duty may also result in legal action against the association.

In some cases, the board officer may be personally liable for damages or financial losses caused by the breach of fiduciary duty. If the breach violated state laws, criminal prosecution could even be possible. Review your community’s governing documents or ask your HOA attorney for more details on the potential consequences of a fiduciary breach.

Beyond The Board Member Fiduciary Duty: Understanding the HOA Board of Directors & Its Role

Do HOA board members have a fiduciary responsibility? Yes. As association leaders, an HOA board has a fiduciary responsibility to act in the best interest of the community. Guided by five pillars, the fiduciary duty of directors is meant to preserve the integrity of the board. An honorable role, serving on an HOA board can also be an exciting and fulfilling endeavor.

Leading your community isn’t easy, especially when you’re keeping up with meetings, buzzwords, and best practices. While board members often put forth their best effort to succeed in their roles, sometimes they still make mistakes that can result in serious repercussions for themselves, the board, and the community.

At CMA, our teams have learned how to overcome even the most significant board member mistakes thanks to our decades of experience working with boards and becoming experts in the community management industry. Whether you’re new to the role or an established pro looking to gain a better understanding, we can help you discover how to avoid costly mistakes and become a more effective board member.

In our latest ebook, “8 Biggest Mistakes Board Members Make & How to Avoid Them,” leaders from throughout our various markets reveal the biggest mistakes they see board members make. Download your FREE copy now to see what they share, including this snippet:

Ineffectively communicating

Effective communication is one of the most important tools available to promote a positive and cooperative spirit. Board members must frequently communicate information, goals, progress, and outcomes to the membership. It’s crucial to educate residents about why a decision was made, explain the time and energy spent to review options, and listen to feedback. Regular and clear communication builds trust and prevents gossip from getting perceived as the truth.

Board members of a homeowners’ association (HOA) are tasked with running an efficient and financially sound community. To do this, you must set realistic goals aimed at enhancing the overall living experience. However, creating these impactful initiatives and following through with them can be challenging without the proper preparation and planning.

CMA has decades of experience helping boards set and reach meaningful goals for their communities. Our Board Goal-Setting series offers free resources to help you set goals, track progress, and meet milestones. In our first installment, you’ll find a Goal Brainstorming Worksheet complete with tools and tips to encourage idea sharing.

Examples of Goals

HOA goals can be broken down into three categories. Annual goals are set every year to maintain operations, compliance, and adequate funding. Improvement goals are related to maintenance projects and general upkeep of the community. Communication goals improve transparency, collaboration, and resident engagement.

Examples of HOA goals include:

• Prepare the annual budget by a particular date.
• Remodel the community pool deck.
• Create a formal complaint process.
• Invite monthly speakers for community events.
• Find a more affordable option to replace an overpriced vendor.
• Invest in technology that allows homeowners to pay fees online.

Because every association is unique, review your governing documents, know your budget, and consider homeowner priorities before developing strategic plans.

Download the ebook now to set your own goals!

Additional Resources Coming Soon

After brainstorming goals, what happens next? To help you work through the information you’ve gathered, we have additional resources coming in our Board-Goal Setting Series. These templates will allow you to take your ideas further and streamline them for maximum efficiency. Here is the schedule for everything else we’re working on:

• • SMART Goals: Out October 2025
  • Goal Setting: Out October 2025
  • Goal Review: Out November 2025
  • Monthly Planner: Out November 2025

 

Related Content on HOA Board Goals and Responsibilities

Board Tips for Setting HOA Goals

To maximize the effectiveness of a homeowners’ association (HOA), boards must make goal-setting an annual task. With the board’s responsibility to maintain and, ideally, improve the community, creating goals can provide a roadmap to ensure that happens. Goals help keep you on track, accountable, financially sound, and much more. Read this to get expert tips for setting HOA goals.

How to Make Your Community’s New Year’s Resolution Stick

As a homeowners’ association (HOA) board member, it’s your responsibility to prepare your community for a stronger, better future. It’s important to make resolutions and set goals for your association in the new year so you’re prepared to start strong. However, it can be difficult to follow through and accomplish every goal when there seem to be so many worthwhile initiatives on the table. Read this for tips to help you commit to your community’s goals and ensure success in the year ahead.

8 Attainable HOA New Year’s Resolutions to Make Right Now

As a board member of a homeowners’ association (HOA), it’s essential to set resolutions to improve the community early on so you have time to work towards those goals. While there may be many projects you want to tackle, choose resolutions that are well thought out, achievable, and will make the most difference for the association. Prioritizing goals will not only enhance the community in the upcoming year but also set it up for a prosperous future. Download our ebook to learn the top eight goals for your board to consider and tips for achieving them.

Understanding the Fiduciary Duties of an HOA Board

The board of directors is an important—and required—aspect of any homeowners’ association (HOA). Comprised of elected volunteers who live in the community, the HOA board is responsible for overseeing the community’s operations and setting it up for long-term success. A critical role, board members have a duty to act in the community’s best interest when making decisions for fellow residents—a fiduciary duty. Read this article to learn more about what fiduciary duty means and the fiduciary duties of directors.

8 Biggest Mistakes Board Members Make & How to Avoid Them

Leading your community isn’t easy, especially when you’re keeping up with meetings, buzzwords, and best practices. While board members often put forth their best effort to succeed in their roles, sometimes they still make mistakes that can result in serious repercussions for themselves, the board, and the community.   We asked our leaders from around the globe to tell us the biggest mistakes they see board members make. Download this ebook to see what they reveal.

As a board member of a homeowners’ association (HOA), it’s essential to set resolutions to improve the community early on so you have time to work towards those goals. While there may be many projects you want to tackle, choose resolutions that are well thought out, achievable, and will make the most difference for the association. To do this, consider using the SMART method, which stands for:

• Specific – Choose a specific goal that’s clearly defined.
• Measurable – Measure your progress so you stay on track.
• Achievable – Ensure your goal is realistically achievable based on your resources, like time and budget.
• Relevant – Ask yourself if this goal serves the community and its needs.
• Time-based – Set specific benchmarks to keep your timeline in motion.

Prioritizing goals will not only enhance the community in the upcoming year but also set it up for a prosperous future. Download our ebook to learn the top eight goals for your board to consider and tips for achieving them.

As a homeowners’ association (HOA) board member, it’s your responsibility to prepare your community for a stronger, better future. It’s important to make resolutions and set goals for your association in the new year so you’re prepared to start strong. However, it can be difficult to follow through and accomplish every goal when there seem to be so many worthwhile initiatives on the table. Read on for tips to help you commit to your community’s goals and ensure success in the year ahead.

Create a plan of action.

You can best achieve community goals when there’s a strategic plan in place. Work with fellow board members to evaluate needs, identify where you can make the most difference, and determine if you have the resources to execute ideas.

Then, create a plan that includes steps to accomplish the goals and markers of progress. The plan should serve as a roadmap to guide the board and guarantee everyone’s on the same page. Additional details to consider when constructing a plan:

• Actions or decisions that need to happen
• Who is responsible for what
• The overall end goal

Review important goal-related documents.

It’s a good idea for the board to review essential items at the start of each year. By freshening up on laws, responsibilities, and roles, you can more confidently move forward on your resolutions. This will help you set your goals, develop actionable plans, and avoid letting important details slip through the cracks.

Some items to consider reviewing annually include:

• Your association’s governing documents
• New laws or ordinances that may affect your community
• Insurance plans and coverage
• Contracts with vendors
• Regular maintenance calendar
• HOA board meeting schedule

Schedule out the year.

Creating a schedule is vital to achieving your goals for the year. With established deadlines for hitting milestones, you’re more likely to stay on track and avoid stressful end-of-year scrambling.

An association calendar is an easy way to centralize your scheduling and offers a single source of information on all HOA operations. Here’s what you should include on your association calendar:

• Community events and activities
• HOA board and committee meetings
• Maintenance and renovation scheduling
• Renewal dates for contracts and policies
• Holidays and other days off
• Key deadlines

Get organized.

Organization is a valuable skill that all HOA leaders should demonstrate. When you’re organized, you not only save time, effort, and money, but you can also focus your energy on the tasks—or goals—at hand. There are several areas in which organization can help you accomplish more, including:

• Meetings: Identify an agenda and duration of a meeting and stick to it. That way, you’re not sidetracked from your to-dos.
• Communications: Develop a chain of communication within the organization to disseminate information and promote transparency.
• Document storage: Digitize your document storage for easier access, streamlined filing, and quicker decision-making.
• Financials: Keep financial data current so you understand if (and how) projects will be funded.

If you haven’t upgraded to using technology to communicate with residents, store documents, and manage day-to-day processes, now is the time to do it. Beyond being an effective way to simplify procedures already in place, going digital provides many other benefits, like:

• Reducing clutter
• Promoting accuracy in reporting
• Saving on the cost of paper and ink
• Helping the environment

Consult with the experts.

While you have your community’s best interest in mind and want to do your part as a board member, working with professionals can help the association be more effective in meeting its goals. Here are some professional partnerships to consider:

• Certified Public Accountant. Consult a CPA before your annual audit to confirm all the critical details are accounted for in your financial records.
• Association Lawyer. For anything that involves legal documents or decisions, you may want to lean on an attorney who has experience working with community associations.
• Community Management Company. Seek guidance from a community management company when it comes to rule enforcement, property maintenance, communication with residents, handling finances, and more.

Setting a New Year’s Resolution for Your HOA

Setting annual HOA goals is a great way to hold your board accountable. Association members trust that you’ll take steps to make the neighborhood a safe and enjoyable place to live. Part of that responsibility involves setting goals, forming plans, and following through on promises.

If you need help creating a new year’s resolution you can stick to while making positive changes in your community, check out our article, “Board Tips for Setting HOA Goals.”

 

To maximize the effectiveness of a homeowners’ association (HOA), boards must make goal-setting an annual task. With the board’s responsibility to maintain and, ideally, improve the community, creating goals can provide a roadmap to ensure that happens. Goals help keep you on track, accountable, financially sound, and much more. The following are some expert tips for setting HOA goals.

Review your governing documents and consult an attorney.
A critical first step is to review—and abide by—your association’s governing documents. The governing documents highlight which decisions can be made behind closed doors versus those that must be discussed in an open forum. Your board must confirm that its vision aligns with what’s mandated within the pages of those documents.

Equally important, make sure your goals comply with existing or new legislation on the federal, provincial, state, and local levels. If you have concerns or questions about the legalities of what you’re proposing, consult an association attorney. They have the expert knowledge to help guide you with both short- and long-term goals.

Ensure your budget can cover expenses.
The financial stability of a community is one of the most significant factors to consider before setting any goals. Review your association’s financial statements and reserve funds and confirm that the existing budget can support your goals. If not, evaluate if the goal is important enough to merit a special assessment or other funding options, like an HOA loan.

Seek input from homeowners.
Goals are a great way to promote better relationships with residents. When you ask for their input during goal planning, it shows that your board values transparency regarding progress and achievement. Ways in which you can involve community members include:

Asking if your goals for the association align with what homeowners perceive to be the highest-priority factors.
Communicating changes to the goals as you go.
Setting meetings intended to gather feedback from residents.
Forming a committee to assist in the goal-planning process.

Be SMART about it.
SMART is an acronym that’s widely used for goal setting in corporate and management environments. Designed to help streamline ideas, focus your efforts, and use your time wisely, SMART criterion makes goal setting a more thoughtful endeavor. To ensure your goals are easy to follow and attainable, make each one:

Specific. The goal must be well-defined and specific. Confirm everyone has a clear understanding of the goal, knows why it was set, who is involved, what should be accomplished, and the proposed timeline.

Measurable. Having a measurable goal helps you track progress, correct the plan of action if needed, and demonstrate advancement to residents.

Achievable. Make sure your goals are realistic and achievable. Work within your resources of time, effort, and money. Setting the bar too high might leave board members feeling defeated and frustrated and residents unhappy.

Relevant. Is your goal important to maintaining or improving your community? Will achieving it make a difference? Is it something most residents want?

Time-based. Set deadlines. If it’s a long-term goal, break it into phases with deadlines for each phase. Also, take into account board members’ availability and their own time commitments.

Make a plan.
Ideally, you should set goals every year before establishing the budget. Best practice is to develop a five-year strategic plan, then use that to create both long- and short-term goals. Developing a strategic plan requires extensive time and effort, but it’s a valuable tool for defining priorities and desired direction and allocating resources appropriately.

A strategic plan will help you determine which goals are most critical, how others should be prioritized, and whether you need additional resources, such as funding, extra staff, or new committees.

Break it down.
Goal-setting becomes easier when you break it down into three “buckets” of goals: annual essential goals, improvement goals, and meeting or communications-related goals.

Annual Essential Goals
These are the mainstay items that belong on your goal list every year. Examples include verifying that governing documents are properly amended and in compliance, preparing the annual budget, managing assessments, and preparing for tax returns and any upcoming audits.

Maintenance & Improvement Goals
These range from routine maintenance of common areas to major improvements like a remodeled pool area or dog park.

Request homeowner input on bigger initiatives. You might get some great ideas, new volunteers, and improved relationships with the community you serve.
Create a preventative maintenance plan that addresses the association’s most critical components.
Review existing vendor contracts to see if they’re still competitive and necessary.

Communication Goals
Improving communications with homeowners, vendors, and fellow board members is always beneficial, as it leads to more satisfied residents, better cost control, and more effective collaboration. Some worthwhile communications goals include:

Establishing a communications policy, including a fire safety policy and a process to relay emergency alert information, such as natural disasters and major power outages.
Creating a formal HOA complaint process for homeowners.
Reviewing existing processes to repair strained relationships.
Investing in technology as needed. Make it as easy as possible for homeowners to pay fees or report issues online to save both their time—and your time.

How an HOA Loan Can Help Fulfill Your Goals
Some goals may be difficult to achieve due to a lack of funding. If an association has insufficient capital, the project may require a loan from a lender specializing in homeowners’ associations. Loans help fund a variety of projects and expenses, from common area improvements to maintenance and repairs, when the annual membership assessment cannot cover the costs. If your CMA-managed association, wishes to pursue a loan, contact your association manager about it. We will have our Financial Services team work with you to see what is possible. If a loan is to be obtained, we will walk you through the entire process from beginning to end.

A well-structured homeowners’ association budget forms the backbone of a thriving community, guiding financial decision-making and safeguarding homeowners’ interests.  More than 74 million Americans live in community associations—and they each depend on their community’s strong financial planning to preserve property values and quality of life.

So, what is an HOA budget? What should an HOA budget look like? And how should board members manage the budget? Read on to learn everything you need to know to lead confidently, keep members informed, and maintain smooth operations.

What Is an HOA Budget?

At its core, an HOA budget outlines expected income (usually from assessments and fees) and plans for expenses the association anticipates for the year ahead. It’s a spending blueprint for maintaining shared amenities, paying for landscaping, funding reserves for major repairs, and supporting the services homeowners count on.

What Does an HOA Budget Look Like?

A budget will look different for every community. However, a standard HOA budget covers three main categories:

• Projected revenue: Assessments, fees, and fines
• Projected expenses: Maintenance, insurance, and management
• HOA reserve fund contributions: Savings for future repairs or replacements

How to Create an Effective HOA Budget

What should an HOA budget look like in practice? Creating an effective HOA budget means being deliberate, data-driven, and cooperative. Consult with qualified professionals, including attorneys, certified public accountants (CPAs), and reserve study specialists, before making any financial or legal moves for your association.

Here’s a step-by-step HOA budget breakdown:

1. Start Early and Review Historic Information

Begin the budget process months before the fiscal year ends so you have enough time to review historic information. If the fiscal year ends in December, aim to begin in June or July. Go through financial statements from prior years and compare past projections with what actually happened. Use those variances to improve accuracy.

2. Reference Your Governing Documents

Every community association has unique governing documents, state laws, and financial circumstances that may impact budgeting and operations. Additionally, your HOA’s bylaws, Covenants, Conditions, and Restrictions (CC&Rs), and state law may require specific reserve contributions, a timeline for meeting notices, or rules for special assessments. Make sure the budget plan complies.

3. Form or Engage a Budget Committee

A budget committee focuses on gathering line items, evaluating vendor contracts, checking insurance, and verifying utility and vendor rate changes. When the committee provides a proposal to the board, the board can review it, amend it as needed, and adopt the finalized budget.

4. Itemize Revenues and Expenses

It may be tedious, but itemizing revenue and expenses is necessary to ensure accuracy. Some potential line items include:

• Revenue: HOA dues and assessments, late fees, initiation/transfer fees, and amenity rentals or fines.
• Expenses: Administrative fees (management, legal, accounting), operating expenses (landscape, utilities, common area upkeep), insurance, fixed costs (taxes, regulatory filings), and the reserve fund.

5. Consider the Reserve Fund

The reserve fund pays for large-scale, non-annual needs, like roofs, pavement, and pool refurbishment. Proper funding often depends on a reserve study. Review or update your reserve study regularly to confirm the budget reflects real-life expectancy and replacement cost estimates.

6. Evaluate Vendor Contracts and Inflation Adjustments

Check whether contractors’ prices are increasing. Insurance premiums can rise. Utility rates might change. Allowing for inflation and negotiating or rebidding contracts can help avoid budget shortfalls.

7. Communicate with Homeowners

Transparency builds trust. Once the draft budget is ready, share it with your homeowners. Explain any assessment increases, reserve contributions, or significant capital improvements. Gather feedback where governing documents permit.

Common HOA Budgeting Challenges

Here are some of the most common budgeting challenges for HOAs, and what you can do to overcome them.

Ignoring Delinquencies

Delinquency can erode the community’s financial base over time. Collecting delinquent accounts is a must. Set expectations and enforce the governing documents to keep your community financially stable.

Underfunding the Reserve Fund

Up to 70% of HOAs have underfunded reserves. While many HOAs don’t set aside enough for long-term repairs, you can do your part by scheduling a reserve study to determine your reserve amount.

Overlooking Vendor Contracts

Renewing contracts by inertia does your budget more harm than good. Whether it’s performance or pricing, vendor services can change. Probing contract terms, comparing bids, and assessing quality can result in savings.

Failing to Account for Inflation or Rising Costs

Costs for labor, materials, utilities, and insurance tend to increase. Budgets that assume flat costs risk shortfalls.

Lack of Long-Term HOA Financial Planning

Without a projected one- to three-year financial plan, boards might be forced into special assessments, deferred maintenance, or reserve funding.

The Role of HOA Board Members in Budget Management

While board members don’t need a financial background to effectively budget, it’s important to know what items to review and understand your available resources. An HOA board’s financial responsibilities include:

• Drafting and reviewing the annual budget with the assistance of their association manager.
• Connecting with professional advisors.
• Overseeing the collection of fees and the enforcement of payment policies.
• Updating reserves and conducting regular reserve studies.
• Monitoring spending throughout the year and adjusting as needed.
• Communicating clearly and often with homeowners about the association’s financial health.

Regularly updated reserve studies are crucial. These reserve studies, conducted by professionals, assess the current condition of major components and project future costs.

Frequently Asked Questions about HOA Budgets

How do HOA budgets work?

HOA budgets map out anticipated income and expenses for a fiscal year. Income often comes from homeowner assessments, fees, and sometimes penalties. Expenses include administrative, maintenance, insurance, utilities, and reserve contributions.

Who prepares the HOA budget?

Usually, a combination of the board’s treasurer, a budget or finance committee, and management staff prepares the budget. In many cases, professionals like CPAs or reserve study analysts are also involved.

What does an HOA usually pay for?

Common expenses include landscaping, common area repairs (such as buildings, pools, lighting), utilities, insurance, legal and accounting fees, management fees, fixed obligations like property taxes, and funds for future major projects.