Resident happiness and respected board members go hand in hand. All too often, board members fail to exceed expectations, step on resident’s toes, and even overstep their boundaries. While these mistakes might not be intentional, they have negative repercussions, and have the power to affect the entire association. With that in mind, we’re going to cover 4 mistakes that every HOA board member, new or established, can avoid. Even more importantly, address your insurance needs with an LA HOA Insurance policy.
It’s easy for any type of fraud to occur if the HOA is not regularly reviewing the financials. A fiscally fit HOA will understand its expenses, prevent fraud, and be responsible with their spending.
According to HOA Management, it is very common for board members in self-managed associations to forget to file important legal documents each year. Every homeowner’s association is required to file a federal tax return (IRS Form 1120-H). Many board members think that the association is not required to file anything because it doesn’t pay taxes. This is not true. You are still required to file this form on behalf of your association. Failure to do so can put your association at risk of losing its non-profit status and will result in penalties and interest that will need to be paid to the IRS.
Yes, homeowners might be reluctant to pay for some fees. But, collecting these payments are critical to maintain your financial health and take care of the association the way it was intended. Don’t let a failure to collect fees hinder your association.
Mistake #4: Failing to maintain insurance.
The right LA HOA Insurance policy can give your association the peace of mind you need. Consult with your trusted insurance professional to go over coverage limits, as well as any dues, policy inclusions and exclusions, and lapse dates.
About Scott Litman Insurance Agency
At Scott Litman Insurance Agency, we are dedicated to protecting HOAs like yours. We have a unique understanding of the industry and the common risk exposures that you face in your daily operations. In fact, we find that 90% of the policies we review are missing coverages that violate the Covenants, Conditions, and Restrictions (CC&R), exposing the board, HOA and management to lawsuits – which is why our comprehensive policies are tailored to meet your specific needs at competitive prices. For more information about our products, contact our experts today at (818) 879-5980 ext. 201, or fill out our online form.