HOA Money Terms Every Board Should Know

The fee each owner pays to fund the association. Regular assessments cover steady costs like landscaping, insurance, water, and management. Boards collect them monthly, quarterly, or once a year.

An extra charge on top of regular assessments. Boards use it for large costs the budget did not plan for, such as a new roof or a legal bill. Many states cap how much a board can levy without an owner vote.

The yearly plan for income and spending. It lists expected fees coming in and costs going out. The board approves it and uses it to set assessment amounts.

Savings set aside for major repairs and replacements down the road. It pays for big items like roofs, roads, pools, and elevators. A funded reserve keeps the board from hitting owners with surprise charges.

A report that predicts future repair costs. An expert inspects the property and estimates the remaining life of each major part. The study tells the board how much to save each year.

An unpaid or late assessment. Boards track delinquent accounts and apply late fees or interest. Long delinquencies can lead to a lien or legal action.

A legal claim against a home for unpaid assessments. It attaches to the property and must clear before a sale closes. In many states the association can foreclose on the lien.

The 12-month period the association uses for accounting. It often runs January to December, but some groups pick other dates. Budgets and audits follow this calendar.

An outside review of the association books. A certified accountant checks records for accuracy and red flags. Some states require one each year above a set budget size.

A major upgrade that adds value or extends the life of common property. New playground equipment or a repaved lot counts. These cost more than routine repairs and often draw from reserves.