What do HOA fees cover? This is a common question many homeowners, and even board members, ask. Learning what fees are paid for in an HOA community is important. It is even more important for the HOA board to employ certain practices to ensure transparency.

What do HOA Fees Cover?

Homeowners associations are organized communities that typically have common areas and amenities. These common areas and amenities, though, will not take care of themselves. The HOA is responsible for maintenance, among other things, and the money for such expenses comes from the homeowners living in the neighborhood.

When a homeowner first buys a house in an HOA community, they agree to abide by certain obligations. One of these obligations is to pay regular dues to the association. The HOA then uses these dues to cover various costs associated with the operation, maintenance, and management of the community.

What do HOA Fees Pay For?

Since homeowners pay regular fees to the HOA, they have a right to know what their money is going to be used for. Every HOA is different, though, so one community’s expenses may not necessarily be the same as another’s. Still, some are more common than others.

What do HOA fees cover? These fees typically cover common area maintenance, common area utilities, insurance costs, management fees, legal and accounting services, security services, and reserve fund contributions.

1. Maintenance of Common Areas

The HOA is responsible for the maintenance and repair of common areas and amenities. These include clubhouses, community pools, fitness centers, parks, and playgrounds. They can also include lobbies, elevators, stairwells, walkways, and parking lots – anything shared or that the governing documents say falls under the HOA’s responsibility.

2. Utilities for Common Areas

Fees also cover the utilities for common areas and facilities. These include electricity and water. For instance, maintaining the HVAC system of an HOA’s clubhouse also falls under the association’s responsibility. As such, the HOA will take the money needed to pay for this maintenance from the dues.

3. Insurance Costs

Many states require HOAs and condo associations to carry insurance. The governing documents of most associations also require this. The cost of the premiums is typically taken out of the operating budget, funded by HOA fees.

4. Management Fees

If an HOA hires an HOA management company, it must pay management fees. An HOA management company helps associations with day-to-day operations, freeing the board of most of the administrative work. However, a self-managed HOA will not need to pay management fees.

5. Legal and Accounting Services

Most HOAs hire legal and accounting services, as board members are only sometimes equipped to handle legal and financial matters. A lawyer can help HOAs amend their documents, draft resolutions, and deal with other legal issues. Meanwhile, an accountant or financial firm can help HOAs prepare financial statements, file tax returns, and manage funds.

6. Security Services

More often than not, security services are necessary for gated communities or associations. If the development is located in a private subdivision, it will need security gates, cameras, and personnel. The HOA fees cover the cost of these services as well.

7. Reserve Fund Contributions

Homeowners associations that maintain a reserve fund will need to make regular contributions. The reserve fund is a savings account that an HOA can use for future major costs. Some state laws require HOAs to have a reserve fund; some don’t. An HOA’s governing documents may also stipulate that the board maintain a reserve fund.

HOA Fees vs Special Assessments

Regular fees or dues are not the same as special assessments. For one thing, HOA fees are a staple. They occur more frequently, typically monthly, quarterly, or yearly. They are a given in an HOA community. On the other hand, special assessments don’t happen often. 

Another key difference is purpose. Regular fees go toward the community’s operating expenses. Meanwhile, special assessments are a last resort for an HOA that requires additional funding. Typically, an HOA board will levy special assessments if there’s a shortfall in the budget for whatever reason or during times of emergency.

Whether or not an HOA can charge special assessments depends on state laws and the governing documents. There may also be rules that limit the amount an HOA may levy. Additionally, some states dictate that an HOA may only use special assessments for the specific purpose written in the notice of the assessment. This is the case for Florida condominiums under Section 718.116 of the Florida Condominium Act.

Do Board Members Need to Pay HOA Fees?

Because board members must fulfill certain responsibilities for the HOA, many often wonder if they are still required to pay HOA fees. After all, shouldn’t they receive some form of compensation if they are serving the association?

Contrary to popular belief, board members must still pay HOA fees. They still have the same obligation as everyone else, even if they are in a leadership position. Board members must set an example for all homeowners. They don’t get special treatment or receive an exemption.

Generally, board members serve the HOA without compensation. However, some communities may allow compensation according to their bylaws. In Florida, Section 720.303 of the Florida Homeowners Association Act addresses this. According to this section, board members may not receive a salary for performing their job. However, the governing documents may authorize a fee or compensation.

How to Promote Transparency in an HOA

Transparency is paramount in an HOA community. Board members must build trust with homeowners – one way to do that is to remain open about financial matters. Homeowners have a right to know what’s happening within the association and what the HOA uses their money on.

Here’s how an HOA can promote transparency.

1. Present the Budget

Homeowners often wonder what is included in HOA fees. Board members can ease owners’ worries by presenting the budget to them annually at the annual meeting. In fact, in some states, this is even a requirement. Homeowners then have a chance to provide their input.

2. Provide Financial Statements

Financial statements show homeowners how the HOA is spending their money. Board members should present the financial statements and reports at every board meeting. They should also distribute a copy of these documents to homeowners. 

Board members should accommodate the request if homeowners request to see the financial statements. Most states even give homeowners the right to inspect the association’s financial records.

3. Conduct Open Meetings

Board meetings, except for executive sessions, should be open to all homeowners. This way, homeowners can see the board in action and understand how the board makes decisions. If the board shows nothing to hide, homeowners are more likely to trust them.

4. Explain Fee Increases

Every so often, the HOA board will have to raise the fees to accommodate shortfalls in the budget or additional expenses. The HOA must also keep up with inflation and the rising cost of goods and services. Instead of raising dues without explanation, board members should discuss their decision. This way, homeowners won’t wonder, “What do HOA dues cover?”

What do HOA Fees Cover? Answered!

In an HOA community, HOA fees play a crucial role. It is the lifeblood of an association, as one can’t function without its primary source of revenue. Both homeowners and board members should understand this role and what HOA fees cover.

Freedom Community Management provides HOA financial services, including collecting HOA fees, in Florida. Call us at 904-490-8191 or contact us online to learn more!

There are many rights of homeowners in an HOA. Everyone in the community must understand what these rights are. In doing so, board members can avoid potential liability, and homeowners can ensure their rights are upheld and protected.

Protecting the Rights of Homeowners in an HOA

Protecting the rights of homeowners in an HOA is crucial for several reasons. It maintains fairness and equity within the community. When homeowners’ rights are respected, the board can implement the rules uniformly and consistently. This reduces favoritism and promotes trust within the association. In turn, these things foster a harmonious environment for residents. 

Additionally, protecting homeowner rights prevents board members from abusing their power. These internal controls will keep the board from making arbitrary decisions. These decisions can lead to conflicts and disputes, ultimately affecting the peace within the neighborhood.

Moreover, homeowners are more likely to actively engage in community affairs when they know their rights are secure. Protecting homeowners’ rights also ensures transparency and accountability.

On the part of the HOA, protecting the rights of homeowners can reduce legal disputes. It can prevent lawsuits, which can be time-consuming and expensive for all parties involved.

What are the Rights of a Homeowner Association Member?

Here are the rights of homeowners in an HOA.

1. Right to Attend Open Board Meetings

Homeowners have a right to attend open board meetings. This lets homeowners see how the board engages in discussions and makes decisions. Many board meetings also include an open forum portion. This is when owners can voice their concerns and opinions.

Of course, board members must discuss some sensitive or confidential issues in private. Such issues include ongoing litigation, delinquent homeowners, and personnel records. For these issues, the HOA board can adjourn to an executive session, otherwise known as a closed board meeting. Homeowners do not have the right to attend executive sessions unless they receive an invitation.

2. Right to Attend Annual Meetings

In addition to board meetings, homeowners also have a right to attend annual membership meetings. Most HOAs are required to hold an annual meeting of all homeowners. At this meeting, the HOA board presents the budget and discusses the plans for the year. It is also usually at this meeting that the association holds its board election.

In Florida, homeowners have a right to speak at these annual meetings. Homeowners can talk about all open discussions or the items on the agenda for at least three minutes. However, the association can implement reasonable rules regarding the open forum.

3. Right to Inspect HOA Records

Homeowners can request HOA financial reports, board meeting minutes, and governing documents, among other things. While they may need to submit a written request and pay for copying and postage, the board cannot deny access unless documents are privileged or under litigation.

4. Right to Disciplinary Hearings

Before taking disciplinary action, like imposing fines, the HOA must provide homeowners a written notice and a fair hearing. At this hearing, homeowners can present their case and any supporting evidence. The HOA board will then make a decision based on this information. Typically, homeowners also have a right to appeal the decision.

5. Right to Vote

Homeowners have a right to vote in the HOA board elections. The HOA’s governing documents, specifically the bylaws, should outline more specific voting rights and requirements. In Florida, unless the bylaws say otherwise, members have a right to vote in person or using a proxy.

6. Right to Sue

Homeowners can sue board members for overstepping their authority, unfair decisions, or selective enforcement. The Business Judgment Rule protects board members if they act in the community’s best interest. Additionally, D&O insurance may cover legal expenses.

7. Right to Peaceably Assemble

In Florida, Section 720.304 of the Florida HOA Act protects homeowners’ right to assemble peaceably. According to this section, homeowners can use common areas and recreational facilities to gather (with invited guests). However, the HOA can adopt reasonable rules regarding the use of these spaces.

8. Right to Display the U.S. Flag

According to the Freedom to Display the American Flag Act, an HOA cannot stop homeowners from displaying the U.S. flag. This is a federal law. However, HOAs can regulate the flagpole’s placement, size, and height.

Furthermore, there may be state-level laws and regulations about displaying the U.S. flag or flags in general. In Florida, in addition to the U.S. flag, homeowners can display the Florida state flag, a flag representing the U.S. Armed Forces, a POW-MIA flag, and a first responder flag.

9. Right to Display Political Signs

Depending on state laws, HOAs may or may not be able to restrict political signs. Some states impose regulations on these signs’ size, number, and display duration.

10. Right to Park in the Driveway

In Florida, Section 720.3075 protects homeowners from certain parking restrictions. According to the law, the HOA cannot prohibit homeowners (or their tenants, guests, or invitees) from parking a non-commercial motor vehicle in their driveway.

11. Right to Solar Drying

Some homeowners associations don’t allow residents to hang a clothesline. This is also known as solar drying. The reason behind the prohibition is due to its negative impact on appearance and curb appeal. However, several states have laws that protect the right to solar drying. However, associations can typically regulate the size of the clothesline.

Florida is one such state, with the Right to Dry law found under Section 163.04 of the Florida Statutes. Other states include but are not limited to Arizona, California, Colorado, Maryland, Nevada, North Carolina, Texas, and Virginia.

12. Right to Friendly Landscaping

According to Section 720.3075 of the Florida Statutes, an HOA’s governing documents cannot prohibit homeowners from planting Florida-friendly landscaping. Such landscaping is defined under Section 373.185 of the Florida Statutes.

13. Right to Install Satellites and Antennas

According to the FCC’s Over-the-Air Reception Devices Rule (OTARD), associations don’t have the power to prohibit the installation of satellite dishes and antennas. However, there are limitations to this rule, and HOAs generally can enact restrictions surrounding the placement of these devices.

14. Right to Reasonable Accommodations

Homeowners with disabilities can request reasonable accommodations under the Fair Housing Act. This includes modifications like ramps or allowing service animals in pet-restricted areas.

Understanding HOA Bylaws and CC&Rs

Homeowners associations are not all made equal. State laws and the governing documents can have a significant impact on the rights of homeowners. Therefore, homeowners and board members should refer to their bylaws and CC&Rs for clarification. 

The CC&Rs contain critical information on the rights and obligations of homeowners and the HOA. Meanwhile, the bylaws cover the operations of an HOA, including elections, board duties, term limits, and voting rights.

A Better Community

There are numerous rights of homeowners in an HOA community. Homeowners should understand these rights so that they can better protect themselves. On the other hand, board members should uphold these rights to promote harmony within the association.

Freedom Community Management provides HOA management services in Florida, including assistance with sustainability planning. Call us at 904-490-8191 or contact us online to learn more!

Leading a sustainable HOA community can benefit both residents and the environment. A sustainable approach will help save resources, reduce expenses, and create a healthier living space. When an HOA implements sustainable practices, it can ensure it thrives longer.

What is a Sustainable HOA Community?

A sustainable HOA community uses environmentally friendly practices in every aspect of its operations. The board must make decisions that reduce the community’s environmental footprint to achieve sustainability. These decisions can affect the use of energy, waste management, and the conservation of resources. A sustainable HOA community balances its current needs with those to come.

The Importance of Sustainability in HOAs

Sustainability is crucial for the long-term success of any organization, including HOAs. For one thing, it can lower the operating costs of the community. For example, energy-efficient upgrades and water-saving measures can help reduce utility bills. These things benefit both the HOA and its residents. Plus, the board can reinvest these savings into the community.

Sustainable practices also make the community more attractive to potential homebuyers. More and more people are becoming environmentally conscious. Younger generations, particularly Gen Z, are more keen to track their environmental impact. These values will come into play when they consider homes. A sustainable HOA community can command higher property values and draw in buyers who care about eco-friendly living.

Sustainable Practices in HOA Community

Believe it or not, plenty of strategies can help achieve a sustainable HOA community. While associations need not implement all of these, even just a few can make a difference.

Here are some sustainable living practices in HOA communities.

1. Implement Sustainable Landscaping

Sustainable landscaping is one of the easiest ways for an HOA to reduce its environmental impact. Traditional lawns require a lot of water, pesticides, and fertilizers. Instead, HOAs can opt for drought-tolerant plants and native species better suited to the local climate.

Xeriscaping, for example, cuts down on water consumption and chemical treatments. Another option is installing rain gardens that collect and filter stormwater. These practices save water and create a more visually appealing landscape that thrives naturally.

In some states, laws are already in place to protect the right to use drought-tolerant plants. California is one such state, as per Civil Code Section 4735.

2. Encourage Wildlife Conservation

Protecting local wildlife is another key aspect of a sustainable HOA community. Associations can create green spaces that support biodiversity. They can do this by planting native trees, shrubs, and flowers. The community can also install birdhouses, bat boxes, and pollinator-friendly plants to attract and support wildlife.

Additionally, refraining from using harmful pesticides is essential to wildlife conservation. Chemical treatments can negatively impact the local ecosystem. With organic lawn care, associations can help ensure that local wildlife thrives. Offering educational materials or hosting workshops on wildlife-friendly gardening can also engage residents in conservation efforts.

3. Conserve Water

Water conservation is critical in a sustainable HOA community. Boards can install low-flow fixtures in common areas to reduce water waste. In outdoor spaces, smart irrigation systems can control when and how much water is used. These systems adjust based on weather conditions, thereby preventing overwatering.

Furthermore, the HOA board can encourage residents to use rain barrels to conserve water. They can use these barrels to water plants. Residents should also ensure they fix leaks as soon as possible to avoid wasting water. This, in turn, can save them money on their water bills.

4. Enact “Green” Guidelines for the Community

To maintain sustainability, HOAs should establish “green” guidelines for residents to follow. These guidelines can promote energy conservation, waste reduction, and environmentally friendly practices. For example, the association can encourage residents to turn off lights when not in use, and carpool or use public transportation when possible.

5. Implement Green Building Standards

Energy-efficient building standards are essential for creating a sustainable HOA community. Green building techniques can include using eco-friendly materials, improving insulation, and installing energy-efficient windows and appliances. These practices help reduce energy consumption, lower utility bills, and minimize the community’s overall carbon footprint.

The HOA can opt to install solar panels in common areas. LED lighting in outdoor spaces and common areas is also cost-effective and environmentally friendly. Associations can encourage residents to use the same standards for their own homes, too.

6. Start a Waste Reduction and Recycling Initiative

Waste reduction is a critical part of any sustainable HOA community. Boards can establish a comprehensive recycling program that includes paper, plastic, glass, and electronic waste bins. Providing convenient recycling stations in common areas makes it easier for residents to join in.

7. Invest in Solar

Solar energy is one of the most effective ways for an HOA to become more sustainable. Solar panels can be installed on community buildings or shared spaces to generate renewable energy. This reduces the community’s reliance on fossil fuels. It can also significantly lower energy costs over time.

Moreover, board members can encourage residents to install solar panels in their homes. The benefits of solar energy extend beyond cost savings. It is a clean, renewable source of energy that helps reduce greenhouse gas emissions.

8. Educate Residents

Education is vital for the success of any sustainable HOA community. Hosting workshops, events, or webinars about sustainability topics can increase awareness and engagement. Boards can distribute newsletters or social media to share tips on living a more sustainable lifestyle.

The more residents understand sustainability, the more likely they are to participate in community-wide efforts. A well-educated community will be more committed to eco-friendly practices. This strengthens the overall sustainability of the HOA.

Protecting the Future Through Sustainable Living

A sustainable HOA community benefits everyone, from residents to the environment. By adopting eco-friendly practices, HOAs can reduce costs, enhance property values, and protect the planet. Leading a sustainable HOA is a choice that ensures a better future for all.

Freedom Community Management provides HOA management services in Florida, including assistance with sustainability planning. Call us at 904-490-8191 or contact us online to learn more!

A condo reserve study is a valuable tool that condominium associations should use to protect financial health. Reserve studies allow the condo board to plan for the future. They can prevent unnecessary special assessments or significant increases in condo fees.

What is a Condo Reserve Study?

A condo association reserve study is a detailed analysis of a community’s finances and assets. It reviews the current reserve fund and inspects physical assets. This inspection helps estimate each component’s useful life and the cost of repairs or replacements.

The reserve study helps prepare the condo association for future expenses. It estimates when assets will need repairs or replacements and the related costs. Based on this, a funding plan outlines how much the association must save annually to meet these financial obligations.

Without a reserve study, associations can be caught off guard by asset failures. This could lead to sudden, significant increases in dues or large special assessments.

Parts of a Condominium Reserve Study

A condo reserve study has two parts: a physical and financial analysis.

• Physical Analysis. The physical analysis inspects the association’s assets, mainly common elements, evaluating their condition, lifespan, and replacement costs.
• Financial Analysis. The financial analysis reviews the current reserve funds. It calculates how much the condo should save to cover repair and replacement costs due to wear and tear. A funding plan ensures the condo has enough funds for these expenses.

Condo Reserve Study Requirements in Florida

Certain requirements apply to reserve studies for condo associations, which will depend on state laws and the condo’s governing documents.

After the 2021 collapse of Champlain Towers South, Florida introduced stricter requirements for condo associations. A structural integrity reserve study (SIRS) must be completed by December 31, 2024. Unlike a typical reserve study, a SIRS focuses on the physical condition and strength of the building.

Milestone Inspections

Buildings must also undergo milestone inspections. For those three miles or more from the coastline, this must happen by the end of their 30th year after receiving a certificate of occupancy. 

The milestone inspection must occur by the end of their 25th year for buildings within three miles of the coastline. After that, inspections for both building types must occur every 10 years. Buildings with three or fewer stories are exempt.

Accounting Records

Section 718.501(1)(c) requires associations to keep reserve studies for at least 14 years. Accounting records should also include financial reports, statements, reviews, and audits.

Condominium Financial Reporting Rules

Section 718.111(13) requires associations to present a summary of reserves in financial reports and estimate how much it will need annually to fully fund reserves for each item using the straight-line accounting method.

Annual Budget Requirements

Section 718.112(f)(2) mandates that the association’s budget includes reserves for items with replacement costs of more than $10,000, based on the latest reserve study.

Suppose an item is not listed in the most recent reserve study. In that case, the association must calculate the reserve amount based on the asset’s estimated remaining useful life and the cost of replacement or deferred maintenance. This rule applies even if a reserve study has not yet been completed. 

Every year, the association must adjust reserve assessments to reflect changes in asset condition or maintenance costs. From December 31, 2024, associations can no longer vote to waive or underfund reserves.

Study Frequency

Condo associations in Florida must complete a structural integrity reserve study by December 31, 2024. Starting in 2025, they must use this study to inform their annual budget. Additionally, milestone inspections are required every 10 years after the first inspection, at the 30th or 25th year, depending on the building’s proximity to the coastline.

No Waiving

Previously, associations could waive reserve funding with a majority vote. However, under the new law, associations can no longer vote to waive or reduce reserve funding.

How Much Does a Condo Reserve Study Cost?

A full reserve study is the most expensive since it includes a site inspection and a 30-year funding plan. An updated study with a site visit is cheaper but requires a new 30-year plan. The least expensive option is an update with no site visit.

Costs vary based on service levels, location, and other factors. Typically, reserve studies cost between $500 and $10,000.

How a Condo Reserve Study Prevents Increased Fees

A reserve study helps prevent dues increases and special assessments in a condo association by providing a detailed roadmap for future financial planning. It analyzes the association’s physical assets and determines how long these components will last before they need repairs or replacements. The study also estimates the cost of these repairs or replacements and provides a funding plan.

By regularly conducting a reserve study, the condo association can set aside small, manageable amounts of money each year into a reserve fund. This fund acts as a savings account for large-scale repairs or replacements. As a result, when these expenses arise, the association already has the money saved to cover the costs. This eliminates the need for sudden, drastic increases in dues or imposing special assessments on unit owners.

People prefer dues increases or special assessments, especially in large amounts. These unexpected costs can create tension within the community and even cause financial hardship for residents who need to prepare for large, one-time payments.

For the Benefit of Everyone in the Condo Community

A well-prepared condo reserve study can improve the association’s financial health by ensuring there is always enough money available to maintain the property. This helps maintain property values and keeps the community in good condition. In the end, a reserve study benefits everyone involved.

Freedom Community Management provides condo management services in Florida, including assistance with reserve management and planning. Call us at 904-490-8191 or contact us online to learn more!

Financial planning for HOA communities is not as easy as it looks. Often, it takes more than creating an annual budget to keep the neighborhood financially healthy. The board should also adopt good financial planning practices to ensure growth and preserve property values.

How to do Financial Planning for HOA Communities

A homeowners association relies a lot on its finances. After all, it costs money to maintain the common areas and meet the HOA’s legal obligations. It also takes money to enhance the community with capital improvements like infrastructure upgrades or new amenities.

For these reasons, financial planning for HOA communities should be a priority. With proper planning, the HOA might avoid falling into debt or levy large special assessments to cover unforeseen expenses. 

1. Conduct a Thorough Assessment

A comprehensive assessment of the HOA’s upcoming projects, ongoing maintenance, and other needs is vital to planning. Doing so allows the HOA to know what funding it may require in the foreseeable future. It also gives the HOA a good basis for creating its annual budget.

How can an HOA conduct an assessment? Apart from laying out all the work it needs, the board may also analyze historical data to estimate future spending. They can review the community’s financial statements and reports to identify trends. It should also help them estimate the cost of future expenses and set realistic goals. 

2. Estimate Income

HOA income usually comes from homeowner assessments, fines, and charges. It’s important to evaluate how much income the HOA has been earning for the past couple of years to estimate future income. This way, the HOA will know whether or not to raise fees, levy additional special assessments, or cut down on costs.

3. Prioritize Dues Collection

Collecting HOA dues can be cumbersome and difficult for many self-managed associations. The board members only sometimes have the time to go door-to-door to collect fees. Nevertheless, the HOA should prioritize dues collection to remain financially stable.

If the board does not have the time or energy to collect dues manually, they can outsource the task to a collection agency or HOA management company. They can also use online platforms so residents can set up automatic payments and reminders for monthly dues.

4. Prioritize the Necessities

Large HOAs may pay for many luxury expenses, such as community events, valet services, and concierge services. While these certainly add to the overall living experience, they also increase the cost. 

If the HOA is in a bad financial spot, consider prioritizing only the necessities. The necessities include routine maintenance, utilities, common area cleaning and upkeep, and insurance. These are usually what keep HOAs running, so it’s important to prioritize them in the financial planning process. If the HOA has a bit of extra income, it can allot a budget for the extra services and facilities.

5. Create a Contingency Fund

Contingency funds or reserve funds allow HOAs to set aside money for unforeseen expenses and major repairs or maintenance. They ensure that the HOA will remain financially stable even if an unexpected flood or fire occurs.

Ideally, associations should aim for fully funded reserves. However, if that is not possible at the moment, try to keep the reserves funded by at least 70%. 

6. Review and Adjust Throughout the Year

Financial planning for HOAs does not stop at creating a budget. HOA boards must be adaptable and adjust to any unforeseen events. It’s best to review and adjust the budget regularly each quarter. This way, the board can account for unexpected developments, additional needs, and changes in expenses.

7. Create a Long-Term Plan

A long-term financial plan for an HOA can be beneficial in many ways. For one, it allows the HOA to set a target for the next couple of years and create a budget tailored to meet those objectives. 

In addition, an HOA 5 year plan or even 10 year plan can help the community ensure financial stability. It helps the board make more responsible financial decisions knowing that they have a goal to achieve in the long term.

Long-term plans also prepare the HOA for future expenditures. They can set aside a budget for a major repair or renovation. The board can set the right amount to levy in monthly assessments to cover those future expenses. 

8. Involve the Community Residents

HOA board members might be tempted to create the budget themselves. While this may be more efficient than involving too many people in the budget creation process, the HOA should still involve the residents while planning the budget.

The board can involve residents by sharing proposals, conducting meetings, and gathering feedback from homeowners to ensure the HOA is addressing all residents are heard. This allows the members to raise their concerns and fosters a better sense of community.

9. Explore Cost-Saving Opportunities

There are many ways an HOA can minimize costs besides reducing its operations. For instance, the HOA can consider energy-efficient technologies to save money on utilities like electricity. Leveraging bulk purchasing opportunities may also be helpful to optimize spending. 

Additionally, HOAs may even negotiate their vendor contracts so they get the best deals. If a vendor is no longer affordable, the board can consider finding a different contractor offering more value. 

10. Use Technology

HOA management and financial management software allow associations to streamline their budgeting and financial management processes. Good software can generate reports, calculate future spending, and track current expenses. 

The best software can even provide financial analytics and insights to show the board where the HOA is headed financially. As a result, the board does not need to conduct a separate financial analysis as the software does the bulk of the heavy lifting.

11. Explore Alternative Income Sources

Homeowners associations are not limited to HOA fees and assessments. Planned communities can also use alternative sources of income to increase their budget. Consider opportunities like partnering with local businesses, renting out common areas, and hosting programs and events that generate additional revenue. 

Effective Financial Planning

It’s crucial to prioritize financial planning for HOA communities. Without proper planning, the community can easily fall into debt or not have enough to maintain the common areas. As a result, the board may fail to meet its fiduciary obligations to the community. The community will suffer as the residents may need to pay higher fees or special assessments.

Freedom Community Management offers robust financial management and community management services to Florida HOAs. Contact us online or call us at 904-490-8191 for more information!

Common areas in condos are tricky to maintain. There are many floors, elevators, stairs, and amenities to consider. For this reason, it can be difficult to keep track of everything and stay on top of all maintenance tasks. HOA boards should develop efficient systems to keep things in check.

What are Common Areas in a Condo?

Common areas in condominium associations are different from regular HOAs. Instead of shared sidewalks and roads, condominiums have more shared hallways, staircases, and elevators. Plus, there are additional common areas like lobbies and rooftops. Here are the common areas you normally find in condominiums.

• General Common Elements. A general common area is a space or amenity all residents can access and use. Common examples include hallways, staircases, lobbies, gardens, pools, gyms, elevators, and parking lots.
• Limited or Exclusive Common Elements. A limited common area is a space made for the exclusive use of specific units. Examples include patios, assigned parking spaces, balconies, and private rooftops. 

Tips to Maintain Common Areas in Condos

How can community associations maintain common areas in condos? Here are some tips.

1. Create a Maintenance Schedule

Common areas need a lot of attention and upkeep to remain pristine. Consider establishing a maintenance schedule that the cleaning and maintenance staff can follow. For example, hallway and lobby cleaning may be done daily. Meanwhile, less frequented areas, such as staircase,s may be cleaned weekly or every few days.

Establishing regular maintenance schedules for certain facilities like pools, elevators, recreational spaces, and fitness centers is also important. The maintenance plan can keep everything in good condition and prevent major damages from occurring. 

2. Establish Usage Rules

Homeowners and their guests might not always take care of common areas and facilities. Hence, it’s best to establish condominium common area rules to prevent damage and keep them in good shape. 

What rules can you set in place? Here are some common examples to consider:

• Operation Hours. Homeowners may be allowed to use certain facilities only during set hours of the day to minimize disturbances and dedicate time for maintenance.
• Reservation. HOAs can outline reservation procedures to prevent overcrowding, property damage, and accidents.
• Capacity Limits. Some common areas may need more capacity to ensure comfort and safety for all occupants.
• Cleanliness and Maintenance. Encourage the unit owners to clean as they go and report maintenance issues when they arise.
• Guest Policies. Provide detailed rules for guests in common areas (e.g., number of guests allowed, restrictions and allowances for guests using certain amenities)
• Pet Guidelines. Establish a pet policy to prevent property damage (e.g,. leash requirements, designated pet spaces, and cleanup responsibilities)
• Behavioral Standards. Create rules on behavioral standards to prevent people from being rowdy. HOAs can prevent certain actions, such as smoking, vandalism, and inappropriate behavior. 
• Safety and Security Guidelines. HOAs can implement safety guidelines for amenity use (e.g. using gym equipment properly, no running or pushing people in the pool). 

3. Implement Good Cleaning Practices

Cleaning is a vital part of maintenance. Make sure to implement good practices to avoid any mishaps and prevent maintenance issues from escalating. Here are some examples of effective cleaning practices to adopt:

• Daily sweeping of floors
• Regular wiping of surfaces
• Daily trash disposal
• Weekly carpet cleaning
• Furniture tune-ups every few months
• Sanitation around high-contact places (e.g. door handles, elevator buttons)
• Monthly window cleaning
• Periodic HVAC maintenance

In addition, it’s important to use the right products and equipment for the job. Make sure to do your research on the kinds of cleaning solutions and tools that are best for each object or surface.

4. Hire Professional Services

Managing condo common areas is not easy. The board can only do so much on their own. Hence, it’s usually best to hire professional cleaners and maintenance staff to do the work. Professional cleaning companies are more knowledgeable and have professional-grade tools to clean the common areas.

In addition, they have more experience in cleaning and maintaining condominium facilities. They may also offer various services from which the condominium can benefit. All of these contribute to a better and cleaner environment. 

5. Address Maintenance Issues Promptly

It’s crucial to address issues immediately once someone spots a maintenance problem. Doing so can prevent issues from escalating and causing further damage. Report any electrical failures, equipment breakdowns, or leaks immediately. It’s also important to tell the residents to do the same.

Furthermore, the HOA board should establish a system for urgent maintenance issues. They should have a reporting system and appoint a point person to coordinate with maintenance staff and contractors. 

6. Incorporate Environmentally Friendly Cleaning Solutions

Eco-friendly cleaning chemicals are free of harmful toxins. Hence, they may be a better alternative to traditional cleaners, which can be abrasive or harmful over time. Moreover, eco-friendly cleaning solutions cause fewer health problems and are more sustainable. 

7. Inspect the Areas Regularly

Regular inspections can help the board spot property damage or potential issues that might cause damage later. Schedule a professional inspection periodically so that everything remains in tip-top shape. They may be a little costly, but they go a long way in preventing major issues.

8. Develop an Emergency Response Plan

Emergencies may easily frazzle HOA board members. However, it’s essential to remain calm and follow a clear procedure when something happens. Consider preparing an emergency response plan so everyone involved can act quickly.

For example, create a list of people to contact when a fire, break-in, or natural disaster occurs. The board may also provide the condo association’s insurance provider details. Moreover, they should post reminders of what to do when there’s a blackout, flood, or extreme weather. Proper emergency response can limit the damage done to community property and get common areas back to normal much faster. 

9. Use Technology

Technology can improve the efficiency and effectiveness of cleaning and maintenance tasks. HOA management software can schedule all the maintenance activities and monitor work orders so everything stays under control. 

Technology can also improve communication between board members, residents, and HOA managers. In addition, associations with enough funds can consider non-human resources such as robot cleaners and other automated systems.

Stay on Top of Condo Upkeep

Condos have more common areas than regular single-family or townhome subdivisions. Hence, the board has much more to keep track of and maintain. The board and management company should develop detailed plans and systems to ensure nothing is overlooked.

Freedom Community Management provides essential condo association management services to Florida condominiums. Contact us online or call us now at 904-490-8191 for more details!

Having a delinquent owner in HOA communities can be a big headache for the board. Not only are they failing to pay their fees but also imposing a financial burden on the rest of the residents. What should the board do when there’s a delinquent homeowner?

Why are Delinquencies a Problem?

Unfortunately, delinquent HOA dues are quite common in planned communities. They happen for all sorts of reasons. Some homeowners may not be able to pay their dues because of financial hardship. The homeowner might have lost a job or gotten into other debt.

Meanwhile, other homeowners may simply refuse to pay the HOA. They might disagree with the board’s methods and not understand why the fees are so high. Regardless, delinquencies can have several consequences for planned communities, including:

• Lack of Maintenance. The HOA must pay vendors and staff to clean and maintain the common areas. Delinquencies might prevent the HOA from paying for these services, resulting in a lack of maintenance. 
• No Services. The HOA may fail to provide usual services, such as garbage collection and snow removal.
• Amenity Closure. HOA amenities that cannot be maintained may be closed so the HOA can focus on paying for the necessities like water, sewage, and electricity.
• Decline in Property Values. HOAs with poor upkeep and services may face lower property values. Home prices will lower, so homeowners cannot rent or sell their properties for higher prices.
• Special Assessments. The HOA may levy special assessments to cover the cost of delinquencies, burdening other homeowners.
• Increased Assessments. HOAs may try to cover the delinquent assessments by raising the fees overall for each community member. 
• Homeowner Exodus. Some homeowners might find it too inconvenient or expensive to live in an HOA with many delinquent residents. As a result, many residents might move to other communities, leaving the HOA with fewer members. 
• Buyer Discouragement. Potential buyers will be discouraged by the lack of maintenance and excessive fees in the community, and they will be less likely to purchase a home there.
• Dissolution. HOAs that cannot pay for upkeep and other services may become insolvent, abandoned, and eventually dissolved. 

What to do About Delinquent Owners in HOA

A delinquent owner in HOA communities is certainly a problem. It causes a lot of physical, financial, and mental harm to the rest of the residents. What can the HOA do to resolve the issue? Here are some potential solutions.

1. Notify the Homeowner

The first thing an HOA can do is to send a notice to the delinquent resident. A formal letter is sometimes enough to remind them that paying dues is important — and that nonpayment can lead to certain consequences. 

2. Impose Fines and Charges

Homeowners associations may issue interest, fines, and other charges for fee nonpayment. Often, the governing documents allow this as an enforcement measure against violating homeowners. Homeowners will be less likely to pay their dues late if they know it will result in monetary penalties.

3. Consider a Payment Plan

Sometimes, the delinquent homeowner may simply struggle financially due to their circumstances. HOAs may consider giving grace to the homeowner by offering a payment plan. The payment plan gives them breathing room and allows them to pay their fees in installments.

4. Report to the Credit Bureau

Homeowners associations can encourage residents to pay on time by reporting delinquencies to credit bureaus and credit reporting agencies. Delinquencies can jeopardize their credit scores and affect other aspects of life. Homeowners may be more likely to pay on time if they know their credit scores are on the line. 

5. Suspend Rights and Privileges

HOAs provide various amenities like pools and fitness centers. The board can exploit these by suspending a delinquent owner’s right to use the facilities. However, remember to check the governing documents before doing this. Some provisions may prohibit the HOA from suspending privileges due to certain violations. 

6. Turn to a Collection Agency

HOAs may have hundreds — or even thousands — of homeowners. In these cases, hiring a collection agency to oversee delinquent assessments may be best. The collection agency will use tried-and-tested methods to collect delinquent dues. Moreover, 

7. Take it to Small Claims Court

Can an HOA in Florida sue a homeowner? Yes, they may be able to do so under certain circumstances. Homeowners associations may force residents to settle their accounts by taking them to a small claims court. The HOA can then resolve the issue legally. On the other hand, remember that small claims courts have dollar limits. 

8. Place a Lien on the Property

Can an HOA in Florida take your house? Yes, they can. Florida homeowners associations are typically allowed to place liens on properties with delinquent accounts. As a result, the homeowner may have difficulty selling the home to someone else.

9. Foreclosure

Homeowners associations can foreclose a home in the community that already has a lien. Initiating foreclosure action allows the HOA to collect the unpaid balance through the sale of the home. Whoever becomes the new owner (usually the bank) will be responsible for paying off the delinquent assessments.

However, keep in mind that this should be a last-resort option. Foreclosures are often tiresome, lengthy, and costly. Once they occur within the community, they may also affect the HOA’s reputation. 

How to Prevent Delinquencies in HOAs

What actions should HOAs take to prevent people from turning into delinquent owners in HOA communities? Here are some possible avenues to pursue. 

• Create a Collection or Delinquency Policy. HOAs should create a clear policy outlining the consequences of late or nonpayment and the escalating steps the HOA will take when these happen. The policy will discourage residents from forgetting or neglecting to pay their dues. 
• Invest in Technology. If the HOA has an online platform, homeowners may be more able to pay their assessments on time. The residents can set up automatic payments, allowing the HOA to collect dues on time each month. 
• Consider Payment Plans. Payment plans allow the HOA to collect late payments at a much slower rate. Nevertheless, it’s better than letting fees remain unpaid. 
• Outsource Collections. HOAs can hire HOA management companies to create collection policies, assist with financial management, and collect dues. The HOA will no longer have trouble collecting dues individually, reducing accidental delinquencies.

An Important Part of HOA Management

Homeowners associations often have trouble when a delinquent owner is involved. Nevertheless, collecting the unpaid dues is important. Doing so keeps the HOA financially healthy and keeps property values high.

Freedom Community Management offers astounding HOA management services, including fee collection, to neighborhoods in Florida. Contact us online or call us at 904-490-8191 for more details!

It’s no secret that homeowners associations cost money to live in. Not only are property values higher but there are regular fees residents have to pay. Where does the money go? What is included in HOA fees? Let’s find out.

What is Included in HOA Fees?

Homeowners often complain about the regular fees they have to pay the HOA. But what do HOA fees include? Are they that important? 

Those who live in an HOA might know they provide many perks and services. The HOA needs to maintain the common areas and provide services like utilities to add value to community life. However, all of the HOA’s operations depend on community funds, and the primary way it earns them is through HOA fees.

What is included in HOA fees? Here are the most common examples of what HOA fees cover.

1. Maintenance and Repairs

Homeowners associations provide amenities to attract potential buyers. These amenities keep homeowners happy and allow property values to remain high. However, they cost money to maintain. Even if an HOA doesn’t have many amenities, it will still have common areas like shared roads, sidewalks, and entryways. These also take a lot of upkeep. 

What do HOA maintenance activities entail? Here are some common expenses included in many communities:

• Cleaning
• Trash disposal
• Snow removal
• Landscaping
• Pest control
• Painting or repainting of exterior and interior common areas like walls and floors
• Preventive maintenance of electrical, lighting, HVAC, plumbing, security, and elevator systems
• Repairs to HOA systems and structures like plumbing, roads, walls, and roofs
• Amenity maintenance (e.g., maintaining the community pool or gym equipment)

2. Utilities

Some homeowners associations provide utilities like water and sewage. But, even if an HOA does not provide utilities, it needs to pay for the utilities of its facilities. It needs to cover everything from water, electricity, and heating. After all, the community pool and the clubhouse restroom won’t be usable without water or sewage services.

Meanwhile, gym equipment and street lights need electricity to function properly. All the common rooms also need proper ventilation, heating, and air conditioning to be comfortable.

3. HOA Insurance

Homeowners associations need insurance to protect them from liability and property damage. In some communities, the governing documents require additional coverage based on the property type and location. For example, some may need to carry Directors & Officers (D&O) insurance, while others need Workers’ Compensation coverage.

In addition, many master policies do not include fire protection by default. The HOA may need additional coverage to protect them from fire and other emergencies such as earthquakes or terrorism. 

4. Reserve Funds

HOAs set aside funds for the reserve account to cover the cost of planned major renovations, repairs, and replacements. After all, everything has a useful life — including the HOA clubhouse’s roofs and walls. The HOA will eventually need to pay a lot of money to repair, replace, or renovate these structures and their components to keep them usable.

In addition, the reserve funds may also be used for the cost of emergency repairs and maintenance after a natural disaster or accident. Keeping enough money in the reserves will prevent the HOA from levying hefty special assessments or obtaining loans. 

5. Staff Salaries

HOAs may hire workers such as cleaning, maintenance, and accounting staff. Some communities even hire security guards to provide extra protection. However, the HOA will need money to pay their salaries. 

6. Professional HOA Management

Running an HOA is hard work. Sometimes, it can be impossible to juggle all the tasks without extra help. For this reason, many HOAs hire professional management companies to handle operations and keep them financially stable. 

What do HOA Fees Cover in a Condo?

Condominium associations are unique in that they have a different overall structure compared to single-family and townhome communities. Their shared walls and roofs make their fee structure a little more complex than regular HOAs.

Nevertheless, condo association fees cover similar perks and services. Here’s what the HOA fee includes in a condominium:

• Landscaping
• HOA condo insurance
• Salaries of personnel (e.g. security, cleaning, and maintenance staff)
• Maintenance of common areas like elevators, staircases, lobbies, patios, and hallways
• Running and maintaining amenities such as co-working spaces, pools, and multi-purpose rooms

What About Special Assessments?

Apart from regular HOA fees, homeowners also need to pay special assessments. These are one-time fees that associations charge to cover the cost of maintenance, repairs, and other operations. HOAs often charge these because of the following:

• Lack of operating funds due to delinquencies in the HOA
• Emergency repairs, maintenance, and replacements after a natural disaster or accident
• Lack of funds in the reserve account
• Legal fees arising from unexpected lawsuits and disputes
• Design or construction defects
• Budget shortfalls

Are There Limits to HOA Fees?

What are the HOA fees in Florida? While there is no set standard, the average HOA fee typically falls between $100 and $350. However, higher-end communities with many amenities can charge between $400 and $800 in HOA fees.

This means that HOAs can generally charge the amount they need to cover operating costs. However, according to Florida law, HOA assessments charged according to the annual budget must be levied in each member’s proportional share of the expenses.

Why are the HOA Fees so High in Florida?

Homeowners associations in Florida and many other states may face a rise in HOA fees for several reasons. One of the biggest reasons is higher property values. Typically, HOA fees rise when property values increase because it costs more to maintain the amenities and common areas.

In addition, increasing insurance premiums and regulations that heighten inspection and reserve requirements may also contribute. There’s also inflation to consider, as the cost of labor and materials has also increased over the years.

A Necessary Expense

What is included in HOA fees? Once homeowners know the answer to this question, they may be more willing to pay the assessments. After all, while fees can be annoying to pay, they’re necessary for the HOA’s operations. Without them, the HOA’s common areas and services might suffer and be detrimental to homeowners as well.

Freedom Community Management provides industry-leading HOA management services to communities in Florida. Contact us online or call us now at 904-490-8191 to learn more!

Creating an effective HOA budget is vital for ensuring financial stability and meeting community needs. A well-planned budget allows a homeowners association to manage expenses, maintain common areas, and plan for future projects. It also ensures transparency and accountability.

What is an HOA Budget?

A homeowners association budget is a financial plan outlining the expected income and expenses of the association over a specific period. It is typically prepared annually and serves as a roadmap for managing the community’s resources. It helps the board allocate funds to maintain common areas, handle repairs, and meet operational costs.

The primary role of the budget in an HOA is to ensure enough funds to cover both regular and unexpected expenses. A well-prepared budget allows the association to collect adequate dues from homeowners while maintaining a reserve fund for future costs. It also promotes financial transparency and helps avoid legal issues by adhering to state laws.

The board can calculate each owner’s regular dues from the HOA budget. Proper budgeting and collection prevent the need for special assessments, which tend to be significant in amount. For this reason, homeowners often dislike special assessments.

How to Plan an HOA Annual Budget

Planning an HOA budget involves several important steps to ensure the community’s financial health. Board members should familiarize themselves with these steps to conduct a productive and effective HO(budget meeting).

1. Review Previous Budgets and Financial Reports

The first step is reviewing past budgets and financial statements. This helps identify trends, recurring expenses, and unforeseen costs that may impact the next year’s budget. Historical data is a good starting point for future planning.

2. List All Expected Income Sources

Board members should identify all sources of income, including monthly dues, special assessments, or rental income (if any). Typically, an HOA’s primary income source is from monthly dues. 

3. Estimate Operating Expenses

The next step is to create a detailed list of all necessary operating expenses. These include utility costs, insurance premiums, landscaping expenses, and management fees. The board must consist of every possible operating expense to avoid shortfalls in the budget.

4. Include Maintenance and Repair Costs

Don’t forget to factor in the costs for regular maintenance, including any anticipated repairs. Larger projects, such as roof replacements or exterior painting, should also be accounted for well in advance. This way, the board can spread the cost over several months to make it less burdensome for homeowners.

5. Allocate Funds for the Reserve

A portion of the budget should go toward the reserve fund. This fund is essential for covering major repairs or replacements in the future. With a reserve fund in place, the board can avoid levying special assessments or increasing the dues significantly.

An HOA board should conduct a reserve study to determine how much reserve money is necessary. This study includes a funding plan that dictates the requirements for annual contributions to meet future financial obligations.

6. Prepare for Unplanned Expenses

It is wise to always plan for contingencies. An HOA board can do this by setting aside additional funds for unexpected expenses. A cushion ensures the HOA can cover unforeseen costs without negatively impacting the budget.

7. Present the Budget

After drafting the budget, the board should present it to the rest of the board members and then to the community members. Allocating a time to present the budget allows members to review and approve it. This step helps build transparency and trust between the HOA board and homeowners. In some states, a budget approval meeting is even mandatory.

8. Monitor and Adjust

After finalizing the budget, spending must be continuously monitored to ensure the HOA stays within its financial limits. If unexpected expenses arise, the board may need to adjust to balance the budget and avoid a shortfall.

Florida HOA Budget Requirements

Florida has specific requirements regarding HOA budgets. These rules differ slightly between condo associations and homeowners associations.

For Condo Associations

Florida condo associations must follow stringent rules when creating their budgets. The Florida Condominium Act Section 718.112 requires a detailed, line-item budget to be prepared each year. This budget must include all projected income and expenses for the upcoming year and reserve accounts.

The board must provide homeowners with a copy of the proposed budget at least 14 days before the budget meeting. The final budget should be approved by the board of directors during this meeting, and homeowners must have a chance to review and comment on it.

For Homeowners Associations

Homeowners associations in Florida also have specific budgetary requirements. According to the Florida Homeowners Association Act Section 720.303, HOAs must prepare an annual budget that outlines the estimated revenues and expenses for the upcoming year. This budget must also account for reserves, though there is more flexibility in managing reserves than condo associations.

Like condo associations, HOAs are required to provide homeowners with a copy of the proposed budget in advance of the budget meeting. The meeting must be open to all members, and the board of directors must adopt the budget during it.

One important distinction for homeowners associations is that Florida law allows them to opt out of reserve requirements if the membership votes. However, it is best not to waive this requirement, as the reserve fund plays a critical role in ensuring the association’s financial stability.

All Things Said and Done

The HOA budget is an important tool in financial planning. Homeowners associations and condominiums alike should have an annual budget in place. This budget helps ensure that the association meets its financial obligations. In the end, the budget safeguards the association’s future and has a domino effect on property values.
Freedom Community Management provides HOA financial services in Florida. Call us at 904-490-8191 or contact us online to learn more!

Short-term rentals in condo associations are becoming increasingly prevalent. Given their potential negative effects, many condo boards are moving to restrict them. Not all restrictions, though, may be reasonable or even enforceable. Boards must consider the law before taking action.

An Increase in Short-Term Rentals in Condo Associations

There is a clear demand for short-term rentals in the United States. The short-term rental industry is a multi-billion dollar industry, with revenue increasing every year. While vacation rentals experienced a dip during the COVID-19 pandemic, things are back in full swing today.

Why do people gravitate towards short-term rentals?

With a sizable shift to remote work triggered by the COVID-19 pandemic, more and more people are choosing to hop from one place to another. After all, there is a big difference between working remotely from home and working remotely from paradise. With increased flexibility, Americans are now simultaneously working while on vacation.

Short-term rentals are particularly popular in condo communities. Florida, for instance, is home to countless condominiums. As a common vacation destination, Florida welcomes visitors in droves, who often book short-term stays in condominiums.

However, allowing a short-term vacation rental in a condo association has several side effects. Many condo associations dislike these types of rentals because of their negative impact on the community. 

One such impact is a decrease (or perceived decrease) in safety. An increase in short-term rentals means more strangers coming in and out of the building. Long-term residents feel less safe and secure when they constantly see a stream of new faces – people they don’t know and have never been neighbors with.

The condo’s appeal to new buyers also tends to plummet when there are many short-term rentals. New buyers have a more challenging time securing financing when a condo has more than 25% of its units as short-term rentals. Lenders are more hesitant to finance purchases in these communities because there is a greater risk of financial instability.

Do Condos Allow Short-Term Rentals?

Although short-term rentals have clear negative effects on condos, they increase tourism and allow owners to earn extra income, but there are benefits and pitfalls. However, whether or not a condo association can allow short-term rentals depends on state laws and the governing documents.

Some states have stringent laws regulating what condo associations can and can’t do, including prohibiting short-term rentals. As such, condo boards should first look to their state and local laws to determine what action they can take.

In Florida, condo boards can generally restrict short-term rentals in condo associations. However, according to Section 718.110(13), amendments restricting condo short-term rentals work differently.

Here is the provision:

“An amendment prohibiting unit owners from renting their units or altering the rental term or specifying or limiting the number of times unit owners are entitled to rent their units during a specified period applies only to unit owners who consent to the amendment and unit owners who acquire title to their units after the effective date of that amendment.”

Apart from state laws, condo boards should also refer to their governing documents. The condo’s bylaws and CC&Rs, in particular, may contain provisions prohibiting or restricting short-term rentals in the community.

How to Enforce Condo Short-Term Rental Restrictions

Dealing with short-term rentals in condo associations can come as a challenge. However, armed with the right knowledge, any condo board can handle their vacation rental problem.

Here are the steps to take to enforce condo association rental restrictions.

1. Enact a Policy

If a condo association allows short-term rentals to some degree, it will need a comprehensive policy outlining all the requirements and restrictions. However, if it intends to ban all short-term rentals, it will likely only need a less detailed policy.

When crafting a short-term rental policy, it is important to include the following information:

• If owners are required to provide rental information to the board or community manager, including the duration of the rental, start and end dates, and tenant information
• Whether the association will charge a short-term rental fee or other fees
• Any rules that apply to short-term renters
• Fine policies if a renter or unit owner violates the rules
• Occupancy limits

Additionally, the condo board should make it clear that the behavior of the renter falls under the responsibility of the unit owner or landlord. As such, if a renter violates the rules, the owner will have to answer for it.

2. Have a Rental Agreement

One of the most important short-term condo rental conditions is requiring landlords to have a rental agreement. This agreement or contract should outline all the pertinent information about the rental, including a statement that the renter must follow the association’s rules. Renters must sign this contract to signify their agreement.

3. Manage Rentals

Managing short-term rentals can be difficult, especially for larger condo communities. To make things easier, condo boards can use online management tools to create distinct profiles, track rentals, and tag violations. Such tools also let condo boards send the rules directly to the tenants.

Alternatively, a condo board can hire a condo management company to handle this task. Community managers usually have access to the right platforms and resources to make rental management smoother.

4. Enforce Using Penalties

It is not enough to simply have rules and restrictions. If a condo board wants to ensure that owners follow these rules, there should be penalties for violations.

The short-term rental policy must specify what penalties owners potentially face. This includes fines or other consequences, such as temporarily suspending renting privileges. Condo boards should amend their governing documents to include this policy.

Furthermore, condo boards should enforce the policy uniformly and consistently. There is no room for bias or selective enforcement. Board members should also follow proper enforcement procedures to avoid claims of invalidity.

Navigating Short-Term Rentals in Condo Associations

Short-term rentals clearly negatively affect condo communities, which is why many boards restrict them. Restrictions, though, should still comply with state laws and the governing documents and be reasonable. A condo management company can assist boards in navigating the ins and outs of short-term rental rules.
Freedom Community Management provides condo management services in Florida. Call us at 904-490-8191 or contact us online to learn more!