Treasurer Duties in Community Associations are Most Important

Treasurers Should be aware:

  • Associations must file a federal and state tax return or exemption statement by the 15th day of the third month after the fiscal year ends. If you have a calendar year, then your tax returns are due by March 15th.  Since requirements can vary, it is best to consult the association’s CPA regarding requirements.
  • Associations that have their own employees or have non-incorporated independent contractors (paid $600 or more during the year) must file appropriate forms with the state and federal government at various intervals during the year. Consult the association’s CPA or payroll company to be sure all forms are being processed.
  • Directors must disclose any contract or other transaction between the corporation and (I) the director or (2) any entity in which the director has a material financial interest.

A Treasurers Duties in a Condo or hoa are the most important

  • At least quarterly, review a bank reconciliation of the association’s operating and reserve accounts. Also review the latest account statements from each financial institution where the association has its operating and reserve accounts.
  • At least quarterly, review the current year’s actual reserve revenues and expenses compared to the current year’s budget.
  • At least quarterly, review an income and expense statement for the association’s operating and reserve accounts.
  • Be sure that the signature cards on all reserve accounts require at least two signatures. One signature should be a board member and the other either a second board member, or the management company.
  • Do not spend reserve funds except for reserve items, or for litigation involving the repair, restoration, replacement or maintenance of major components which the association is obligated to maintain. The board may borrow money from a reserve fund for operating expenditures. However, any borrowed funds must be repaid as soon as possible.
  • If the board uses any reserve funds to pay expenses for any litigation, make an accounting of all litigation expenses and make it available for inspection. Give the members written notice of (I) any decision to use reserves to pay for such litigation expenses and (2) the location of the accounting that is available for their inspection.
  • At least every 3 years, review the reserve study and make any necessary adjustments.
  • To obtain exemption from personal liability for volunteer directors, purchase both general liability and directors and officers liability insurance.
  • To prevent suit and joint and several liability against individual owners, if the association contains any property owned in common by the owners, purchase general liability coverage.
  • At least every 3 years, conduct a reasonably detailed and competent visual inspection of the accessible components the association must maintain as part of a study of the association’s reserve account requirements.
  • We have found that some associations are paying real estate taxes on their common areas. Most, if not all, associations should be exempt. Check with your CPA.
  • If the association owns common area lots, be sure the county assessor has your correct mailing address, even if you do not normally get tax bills. If a tax bill appears for any reason, or if you become subject to a mechanic’s lien, the only address may be the address in the public records. You want to be sure you know about any tax liens or other liens against the property. Many of these mailing addresses are still old addresses for the developer.
  • Associations regularly pay water bills on meters that serve other properties, or they encounter claims to pay water bills that someone else has been paying. It is critical for boards and managers to know that the water bills match up to a meter serving the association and that meters serving the association have a water bill coming to the association.
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