125 | The Cost of Financial Mistakes for HOAs - HOA Insights: Common Sense for Common Areas

Episode Transcript
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Kevin Davis (00:00):
The end of the day, if you are a unit owner and

(00:03):
you're looking at an increase inyour assessments or special
assessment, the first thing youwanna do is question their
authority, their competency,their honesty, if they don't
communicate it why it's needed,well enough. Again, go back to
communication and transparencyand openness, my only option is
to distrust, and once Idistrust, it's hard to get that

(00:26):
back.

Announcer (00:26):
HOA Insights is brought to you by six companies
that care about board members,association, insights,
marketplace, association,reserves, community financials,
Kevin Davis, Insurance Services,Hoa invest and the inspectors of
election, you'll find links totheir website and social media
in the show notes,

Robert Nordlund (00:42):
Hi, I'm Robert Nordlund of

association reserves, and I'm Kevin Davis of
Kevin Davis Insurance Services.
And this is HOA insights. Wepromote common sense

for common areas. Well, welcome to episode
125, where we're again speakingwith insurance expert and
regular co host, Kevin Davis.
This episode was inspired by ourrecent episode, 110 on
understanding board financials.
And Kevin reached out to me andwanted to do a follow up to that
program, helping our audience tounderstand the serious

(01:12):
consequences communityassociations face when board
members and managers fail tounderstand their financial
statements. Board members areresponsible to run the affairs
of the association, so it's noexcuse to say that you don't
understand the financialstatements. There's a real cost
of being unaware or oblivious ofthe financial state of the

(01:33):
association. Every board member,not just the treasurer, needs to
understand how their associationis doing financially. Last
week's episode 124 featured agreat interview with Jason
Gamel, the CEO of Arda, thetrader Association for the
timeshare and vacation ownershipindustries. And just like with
so many other areas of life, itreally helps to understand

(01:56):
something by stepping back andlooking from a different angle,
and that's what I enjoyed in mydiscussion with Jason, the
ability to look at what being aboard member is like from the
timeshare and vacation ownershipside of things. Now, if you
missed that episode or any priorepisode, take a moment after
today's program to listen fromour podcast website, Hoa

(02:19):
insights.org, or watch from ourYouTube channel, but better yet,
subscribe from any of the majorpodcast platforms so you don't
miss any future episodes. Thoseof you watching on YouTube can
see the HOA insights mugs thatKevin and I both have, that we
got from the merch store, whichyou can browse through from our

(02:40):
Hoa insights.org website, or thelink in our show notes, you'll
find we have some great freestuff there, like board member
zoom backgrounds and somespecialty items for sale, like
mugs. So go to the merch store,download a free zoom background,
take a moment look around, findthe mug that you'd like, and if
you're the 10th person to emailme at podcast at reserves

(03:02):
day.com mentioning episode 125,mug giveaway. We'll ship that
mug to you free of charge. Weenjoy hearing from you
responding to the issues you'refacing at your association. So
if you have a hot topic, a crazystory, and we get a few of
those, or a question that you'dlike us to address. You can
always contact us at805-203-3130, or email us at

(03:28):
podcast@reservesay.com buttoday's episode comes from Simon
from Portland, who asked, I'mnot good with numbers. I'm the
rules guy. Is it okay for ourtreasurer to be the one handling
all the budget and financialissues? So Kevin, a good
question. What do you say to ourfriend?

Simon, yes, for assignment. You know, when
somebody asks a question likethat, you know they know
something is wrong, okay,

well, or they're they're nervous. They're
nervous something might bewrong.

Assume Simon's the president of his association,
and every month he gets thefinancial statement. He says,
you know Michael, you knowtreasure guy. Listen, please
handle all this stuff, becauseguess what, my job is to enforce
the rules. I'm a rules guy. Imake sure that people take their
trash cans in every single day.
I make sure that the pools arekept I make sure they're not

(04:22):
parked in visitors parking. ButMichael, you handle all this
financial stuff, and then guesswhat Michael's been handling for
years. And guess whateverybody's happy with Michael?
All of a sudden, one day,Michael's gone. He disappeared.
And guess what? What happened toMichael? So I don't know, I
already moved or somethinghappened to him, but we can't
find him. And guess what else,you can't find the reserve
account, the reserve withMichael, and that's the problem,

(04:45):
having one person to handle it,and Robert. This is that's
always been the issue. However,today it's a greater concern for
me, and when I heard whatepisode 110, So I heard in him
that you have to be aware of thefinancials. You have to
understand them. And he neversaid, why? What happens? Is it a

(05:08):
cost associated more today thanever before, but today we have
incivility. We talked about thelack of civility, the lack of
interaction. We know. We suspecteverybody is being dishonest. We
expect everybody beingconfident. We're looking at
living in community associationthrough a distorted lens these
days. You know, we don't trustthere's a lack of trust. And

(05:31):
guess what? They'll not trust.
The money. Part of it issignificant, and that's when I
heard 110 and please, if you goback to podcast 110 and you'll
you'll learn, you'll get thebasic understanding of the final
statement. But today, that's whyI was really concerned about it.

(05:52):
So Simon, today, more than everyou have to be under you have to
understand that financialstatement. More than ever
understood it before.

Let's talk about a couple of things.
There's one thing about being anexpert, and we're not saying
everyone has to be an expert,but you need to understand. And
I know some, some very sharppeople. I know a doctor friend
of mine, I know an attorneyfriend of mine, that are just
wizards in their area ofexpertise, but they just don't

(06:21):
know numbers, that's just nottheir strength. So we're not
talking about a heavy lift ofbecoming an expert. We're
talking about understanding,does the well, does things
balance out? Do we? Are we aheadof budget or behind budget?
Those are simple concepts tounderstand. That's where, that's

(06:42):
what we're talking about here,right? Exactly.

You have put yourself in a defensible
position when somebody islooking you in the eye, if that
your next door neighbor issaying, How could you let this
happen? And you have a choice.
You can say, Guess what? Ireviewed the financial
statement. I know the income forthe month of June was down, and
I know the reason why it wasdown, and we're working on it.
That's defendable positionversus, well, I don't know. I

(07:06):
got a second, see, I'm lookingat financials in a while, and,
you know, the guy gave me allthe stuff, and I really don't
understand numbers, because I'mthe guy who has to enforce the
rules which one's defendable.

And there's so many side effects of that, if
you say, I've seen it, and bythe way, yeah, our budget is a
little bit behind. And here inJune or July or August, you
should already start preparingfor expectation that we're going
to have higher homeownerassessments next year. That's
just being conversational,that's having an awareness. And

(07:37):
they say, Do we have enoughmoney in the reserve fund for
the roof project? And the answeris yes or no, or maybe you want
to be able to answer thatquestion, rather than, I don't
know when you told me about youwanted to go down the path of
this episode, I started to thinkback when I was the president of
my association, and I honestlygot a chill up my spine,

(08:00):
thinking, what if someone askedme, how could that have
happened? Yeah, I would neverwant to answer. Well, I just
trusted Pam, or I trusted, inthis case, Michael, isn't that
why we have dual signature checkresponsibilities? That's why you
have all

responsibilities.
Just to keep reality. What youwanna do is keep an honest
person honest. Okay, let's goback to Michael, for example.
Let's say Michael intends to dowell. Let's say every week
Michael does it, and all of asudden he makes a slip up. He
makes a mistake. And guess what?
Nobody caught him, and nobodysaid anything. Ooh, what happens
to Michael? Yeah, he goes on aslippery slope. Michael's not a

(08:39):
dishonest guy in the beginning,and most people are not. They
go, Okay, I got it. But then allof a sudden, if nobody looks
over his shoulder, nobody say,Okay, I do the monthly
reconciliation. I just make suremy job is as the president to
make sure that Michael's doinghis job, to keep Michael honest.
You know, even if we just lookat, you know, you have
employees, let's say, all of asudden, I have an employee.

(09:00):
Let's say I don't look at theirfinancial statement every month
in terms of their expensereport, and they go out and I
said, Hey, you can fly, but youcan't go first class, but I'll
look at it go every once in awhile. Okay, hey, did you? You
didn't put with class? Okay?
That means keep them on target.
We don't want to make justhonest people dishonest, and you
do that by just ignoringeverything.

You gotta keep your eye on the ball. Things can
slip through and well, I wasthinking on my phone, and all
the different apps we you and Ihave, there's now two factor
authentication, just doublechecking that kind of stuff. And
again, we're not talking aboutbeing an expert. We're just
understanding are the numbersgoing up or are the numbers

(09:43):
going down? And show me whereremind me. Remind me is that the
is that the balance sheet? Isthat the budget? Michael show me
which one that is again, andMichael can show you, and you
can say, oh, yeah, okay, now Isee What was that last month.
Remind me. Just. Getting an ideaof is that moving in the good
direction? Is it moving in thebad direction? And if it's

(10:05):
moving in the bad direction,then your next question is,
well, do we need to do anythingabout it? And Michael can say,
well, through whatever we payour insurance premium three
times a year, so it willrebound, or we're heading into
the summer months where we watermore. So we're going to have
higher landscaping or higherwater, expensive find out what

(10:26):
it is, so you can what have thatconversation be?

Conversationally capable. That's what we're
saying. The idea is not to be anexpert. It's just be capable. If
Simon is capable, Simon says toMichael, I don't understand what
happened here. And Simon is notgoing to be an expert, but what
happens is, is when he goes tolooks at the next door neighbor

(10:52):
and say, Listen, I talked toMichael about the financials. He
explained to me that this isgoing on, that's going I can't
believe he lied to me when hewas just honest to me. Now, when
you say that, guess whathappens? That's a defensible
position. You're defendingyourself. I did my job as the
president Association. I lookedover his shoulder, but he lied

(11:12):
to me. Okay? He said, X, Y, orhe lied. He lied about the
financial statement, about theincome. You know, now he didn't
steal the money. He just he madea mistake himself, but it was
his mistake, and he either amentions or doesn't mention. But
from Simon's point of view, hewants to be a defensible
position. He wants to appearcompetent. Because guess what in

(11:34):
the world we live in today, youknow, because we live in a
community association now thatpeople lack trust. They lack
trust in their experts. Theylack trust in their board and
their management company. Theyjust don't trust them. And so
you have to appear confident allthe time.

I was just thinking about in the world in
politics, the last few electionsthat we've had have been
contentious. Is that fair thingto say? Yeah, you're right.
There's more incivility, and soare we. And we've talked about
this. Julie is a strong advocateor proponent about building

(12:13):
community, and you want to betransparent, you want to be
clear, you want to be open aboutthings, and like we've talked
about here today, havingconversational capability with
the numbers is where you areable to build trust at the
association. Because I think, asyou say, the natural thing right
now we see, are people worriedwhat's happening? Are you an

(12:39):
idiot? Are you a thief? Are youa fool? All those, all those are
bad things, and that's whatthey're wondering.

And guess what?
It's not that hard to do it. Youknow, go back to Simon, if Simon
just learned some basic thingsthat you look at a financial
statement and you have a incomeand you have a balance sheet
balance, that's a balance theincome statement. Gotta have
more income than expenses. Okay?
And take a few minutes and lookat them, because when Simon
appears competent, okay? And heappears competent to the people

(13:08):
who live there as a presidentAssociation, then guess what?
Life is a little bit easier forSimon, you know, as opposed to,
I don't understand, or guesswhat, Michael hands the ball.
Can you imagine going before theboard of directors or a unit
owner, or anybody, and say,Guess what? Michael handles it
all my jobs to enforce therules. It doesn't pass that

(13:28):
test. And again, we live in thatworld where we it's a distorted
lens that we just don't feelcomfortable. And we don't feel
comfortable about society as asociety thing right now. We lack
comfort so, and you mentionedtransparency, it is so clear
that if we're transparent andsay, Guess what? Here are the
numbers. Here is Michael toexplain the numbers to all of
us, you know. And if Michaelexplains them, well, guess what,

(13:52):
Michael, it's great. Let's sayMichael starts to stutter. We
start be concerned about Michaelas the board president, as the
Vice President, as the rest ofthe board. We say, Michael,
we're kind of concerned rightnow, you know, an outsider to
come in and review, review thosefinancials. You know, it's
comfort. We all have to feel,appear comfortable. And the
problem is, like, like withSimon, what happens we don't

(14:12):
feel comfort in a board member,a board member or community
association. Do we go forwardand say, explain it to me, or do
you take a step back and go,Well, I assume he's doing the
right

job. And then Kevin, you got me thinking about
two more aspects of this. One isthe team aspect, where a healthy
board will speak as one will beunified. Obviously, there's
going to be some differentopinions, and not every vote is
going to be unanimous. There's alot of votes that are reveal
more or less or conservative oraggressive or that kind of
stuff. And I'm fine, but youneed to be united as a team, and

(14:45):
at least be facing the realityof our collections are suffering
this year. We have adelinquencies problem. You need
to be all on board with that,and then the whole idea of
having a pipeline of new boardmembers, if you. Are reliant on
this Michael guy, then are youlooking for another Michael guy,

(15:06):
another CPA, another bookkeeper,or something like that, and
that's a hard board member toreplace when you're looking so
narrowly. And so if you developmore general skills and people
helping each other, all of asudden it becomes easier to have
a pipeline of new board memberswho keep the association
healthy, and you don't getembedded secrets.

The most important part we operate as a team. So
now we as a Board have talked toMichael, and you got Simon and
all the rest of us gettingtogether, and now the board
understands it, and we supportand we support Michael.

Well, let me slow you. Let me slow you down.
Now we, we support Michael. Weas a board. I love that

word, and it's so important because we as a board
now, sudden, we go out before tothe unit. That doesn't mean that
they're gonna agree. Doesn'tmean they're gonna like us. It
still may even sue us, but guesswhat happens, though, we have a
defensive position, so if we getsued, because guess what, they
don't like the specialassessment that we pass. We went
through the numbers. We haveMichael through the numbers.
He's an expert. We all agree. Weall understand it, and we go out

(16:08):
there and say, We need a specialassessment. Guy. No, you know,
you have the authority. You didit too late. You don't have it's
against the Civil Code. Youcan't do it. We're gonna file a
lawsuit now. In that lawsuit, asthe President Association and as
my group, guess what, we okay,because we have insurance to
pick it up. And guess what. Andme, as an insurance provider,
say, Guess what, I'm okaybecause you have to defend the

(16:28):
position. It may cost 3040,$50,000 to defend you, but let's
say, all of a sudden you in thatsame board meeting, and all of a
sudden you had that meeting, andwe all blame Michael. And we
say, hey, guess what? That'sMichael's job. I can't believe
that Michael did this. Now,guess what that claim is going
to cost three or $400,000 whenthere's no defendable position

(16:50):
in there? You're talking about a$30,000 claim to 300 $400,000
claim. It's as simple as that.
We're defending it. You're noteven paying it. We're just
spending because guess whathappens now, you know, I live in
unit number three. Okay, guesswhat? Robert, you live in unit
number 10. We're going to talkto each other. And guess what's
going to happen? You'll talk tothe next door neighbor. Now, you
have 15 unit owners there whosaid, Guess so. You want to have

(17:10):
a special assessment. Okay? AndI can't get Michael on the phone
to tell me why it's needed. AndSimon, you're not telling me why
it's needed because you'retelling me to talk to Michael.
Nobody can reach Michael becausehe's at work. I don't trust what
you're doing, and I don'tbelieve you have the authority
to do it. They won't say you'reincompetent, okay, what do you
mean? They may go that far andsay you're incompetent, but

(17:31):
don't have to. We say you don'thave the authority to pass it.
Now, if you are a committedboard, the we board, guess what?
We understand your concerns,okay, but we had to do it, and
we need to do it for thesereasons. Yeah, and then you walk
away. You have to debate, do youhave the authority? That the
authority was what we've done asa board, it's defendable. Let's,
let's take us to court. We okay,and you guess what? The

(17:53):
insurance will look at you andgo, Okay, you did your job. You
did your job as a board ofdirectors. Guess what? I don't
have a problem defending you,but if you bla if Simon blames
Michael or Michael's gone withthe reserve account, guess what
happens now? Now a $30,000 claimgoes into three, $400,000
including the reserve accountthat he stole.

So there's different kind of costs. There's
a cost of damage to community,the damage to the board, the
damage to maybe home values, thedamage to trust. Boy, how long
it takes to rebuild trust, thedamage to the health of the
association. And then there's $1damage. Just a lot of aspects to
it, okay, well, we have someother things that we want to

(18:38):
cover, but looking at the time,let's take a quick break now to
hear from one of our generoussponsors, after which we'll be
back with more common sense forcommon areas and speaking more
about the cost of not knowingwhat the numbers are at your
association,

Paige Daniels (18:54):
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f, i, p, H, o.com, learn howyour association measures up,
and

we're back.
Well during the break Kevin andI were speaking more about this,
and come back. It comes back towhat Kevin has talked so many
times about, the three primaryroles that the board members
need to fulfill. And Kevin, canyou go down that path?

And this is interesting, because if the
Board of Director of condounderstand that if they do these
three things really well, thatis, enforce the rules, maintain
the association Okay, and handlethe financials, okay in a proper
way, yeah, that's it. Everyboard meeting, are we doing
those three things? And again,we're talking about in a time
where people. Who live in thiscommunity, associations are

(20:02):
looking through the distortedlenses. If you feel confident
enough to know that you're doingthose three things really well,
you in pretty decent shape. Now,the one key area, though, is
that people's money, they takeseriously, you know, yeah, okay,
you know, I've parked invisitors parking. Okay, well,
all right, okay, so that's that,you know, the trees have been
trimmed. You gotta trim thosetrees. But when we start talking

(20:23):
about money, specialassessments, increasing
assessments, you haven't paidyour assessments, that means,
guess what? Now, all of asudden, wait a minute, do you
really know what you're doing?
Are you really doing a good job?
It raises that level. That levelis different when you talk about
finances. So you have to have abasic understanding of the
financial you don't have to bean expert. And I assume with

(20:44):
Simon that Michael there, whohandles the money, is a CPA or
an accountant or something,that's why he believes that they
can do it, and Michael could bethat guy. But if you're in a
meeting and Michael's onvacation that week, or Michael's
anywhere, and Michael's notavailable, Simon, you have to be
in a position to say, Iunderstand what you were talking

(21:07):
about. And guess what? Let meget back to you, because I do
understand. And you have to getthat feeling that you do
understand, which means you gotto understand you can't fake
these things. You know, peoplelook in your eye and say, Wait a
minute. Why? The month of June,the income is lower than it has
been for the past six months.
The income should be pretty muchthe same every month, right?
Yep, okay. And Simon, you haveto go back there and say

(21:30):
something simple. You don't haveto be able to say, well, guess
what? The reason why is because,you know, we do have some
delinquencies, okay, but guesswhat we have, we have a system.
We have a policy in place thatworth
that money. Yeah. Okay, and sonow, what's going on? Yes.

(21:50):
So now, since Simon is feelingmore confident, okay, about his
job, and it goes back to the weso now Simon is backing it up,
Michael and the whole boardacting together collectively.

Yeah, and I hope that Simon has gotten an
appreciation, maybe notmemorizing numbers. See, wow, is
unit number 13 five months ornine months behind? And does
that mean 13,000 or 15,000 Idon't know, but something like
that. And so you can say thereis this one unit that is way
behind, but the good news isthey've posted it for sale, and

(22:25):
so when it sells, then we'll getthat money back from escrow. All
this kind of stuff. Have just aworking knowledge of what's
going on, and then the workingknowledge of every board member
should know what's happeningwith their insurance premiums.
What's happening with theirreserve funding? Are we ready or
not? Are we looking at trouble,or are we making progress? And

(22:48):
just that that workingknowledge. And again, it comes
back to having multiple peoplebeing able to cover for each
other. Because, you know what,if Michael breaks his leg and or
is in the hospital for a month,you want someone else to be able
to cover for and be able to talkit through. And then I was
thinking about from the ownerpoint of view, also the board

(23:10):
members want to have anunderstanding and that clarity
for a larger Association. Mightit be a good idea to have an
open budget meeting once a yearso everyone gets to see the
numbers, and you can share thenumbers around at that point in
time and say, This is our budgetfor the year. Notice that our
delinquencies are nice and lowat 2.5% whatever things are. Can

(23:33):
you go further to be proactiveand be open and share numbers
with the owners also,

that's exactly what it is. Because, again, if we're
looking at through thatdistorted lenses, and we don't
have trust, what's the best wayto say trust? Hear the numbers.
We're open. We're open. We'retransparent. Here the numbers.
Look at them, and again, onething I have to remember, too,
this is important. It doesn'tmean they're not going to be mad
at you and not going to sue youor make a claim against you,

(24:00):
because that's the problem. Isthat most people are afraid that
if we do this and they see it,guess what's going to happen? We
may get sued, we may get yelledat. May not like it, and that is
the problem, because, yes, youstill they may not like they may
not like the fact that you gotto wait until unit number 11
sells the unit to get your moneyback. They may sell. No, no, you
should be doing it more. Youshould have a better collection

(24:21):
policy. You should have this.
And this a still may be mad atyou, but you're going to say
that, listen, our policy is whatit is, and we're okay with it.
And be okay with it and notpanic, because if you get sued,
you want to make sure that youhave liability insurance to
protect you for your suit. Andif you are, you have a defensive
position. If you don't haveliability insurance, you want to
have a defensive position that,guess what? We followed the

(24:42):
rules based on the documentstell us to do? We have a
collection policy, and we areimplementing our collection
policy. Here's our policy. Doyou have any questions on our
policy? Well, we don't agree.
That's okay. You don't have toagree. We understand that you're
not gonna agree to everything wehave to say, but we're okay.
Well. My lawyer will contact youtomorrow. That's okay. We're

(25:03):
doing our job the way we aresupposed to do it. We're having
our board meeting, and we'retreating our board meetings as a
board meeting, not social club.
When I talk about what's goingon Netflix, you know, I talk
about the we see what's playingthe movie, it's a business
meeting, and we're talking aboutthe finances. And guess what?
Here are the numbers right here.
We're totally transparent.

Yeah, the whole idea that there is a growing
amount of distrust, and you needto be prepared for that. And
just as you were saying, someonethreatening to sue you, that may
be an idle threat. It may be areal threat, but if you're well
defended, then it's a non issue,absolute non issue. Maybe you
can get ahead of that withcommittees. Maybe you can get

(25:45):
ahead of that with an openmeeting. But okay, let's say you
are Simon. What are Simon'ssteps to figure this out? Does
He say, Hey, Michael, can youtake me to coffee and we go
through this are, can I meet youbefore the board meeting next
month? And can you remind me?
Please be patient with me. Butcan you remind me which ones

(26:07):
which? And what they all tell meis that, is that how it starts?

That's it. And the key thing is make sure it's
Simon. Simon, you got to makesure you understand that Michael
understands his job, becausegive him benefit that he's
probably a CPA or captain,something like that. And you're
going to have to be patient withMichael also, because we don't
want to treat Michael like he isdishonest. Because the easiest
thing to do is to say, oh, youknow, we say at the end of this

(26:35):
our podcast, right? Simon hearsthat, oh, I have a problem. We
have a distorted lens. I onlyfind what Michael's doing here.
And he goes to Michael, Michael,I know what you're doing now.
I'm also, Michael's starting tofeel, you know, attacked, and my
defensive, defensive. So Simon,whatever you do, don't attack
Michael. Sit down with him likeyou're saying. Let's talk ahead
of time, because I need tounderstand these things. I've

(26:57):
heard this podcast. I gottaunderstand it, because there is
a cost involved. I need tounderstand but make sure you
don't you don't put Michael in adefensive position, because now
all of a sudden, you knowMichael's going to worry about
him. Now, if Michael in adefensible position, you got to
be careful, because why he's ina defensible position too, you
know? So there's a lot to

it, yeah, but build the We, of us being on the
board help me so we can presentthis. Someone asked me at the
pool yesterday, how are wedoing? And frankly, I don't
know. And I don't like being ina position where I say I don't
know, and that's isn't that whatwe're talking about here?

Hey, Simon, go back to Episode 110 to get a basic
understanding of the financials.
That's probably the best thingthat that assignment can do,
because the basic understandinggives you that appeal, that you
are competent. Because the endof the day, if you are a unit
owner, and you're looking at anincrease in your assessments, or

(27:55):
special assessment, the firstthing you're going to do is
question their authority, theircompetency, their honesty. I
mean, if they don't communicateit why it's needed, well enough?
Again, go back to communicationand transparency and openness,
they don't do it well enough. Myonly option is to distrust, and
once I distrust, it's hard toget that back. So the key to the

(28:17):
whole conversation we're havingright now is to understand the
world is different. You know, welive in a world where we have
difficulty trust issues. Youknow, we all have trust issues
right now because we don't trustour government. We don't trust
the people leading it. We justdon't have trust in institutions
overall and where's the wardthey're not communicating, yes,

yeah, where's Walter Cronkite when we need him
to tell me what the truth is andwe go

home. But now there's so many truths out
there, because everybody hastheir own, you know, podcasts
out there who gives theirversion of the truth. Best thing
we can do is be open,transparent and

communicate.
Yeah? Well, you've also saidtrust the process and work the
process. I'm assuming that youhave a good process at your
association, whether it becollections, whether it be
getting the information and thenstanding behind your policies.
This is how we do things here.
Obviously, if it's a dated andineffective policy update, it

(29:18):
talk to your attorney aboutthat. But what about we skipped
right over this. What if you getto the board meeting? Oh, two
things. One is, what if you'regetting your financial
information late, and when youget your financial information,
it's not right? I thinkfundamentally, you got to fix
that problem. And there arecompanies like 110 was Russell.

(29:41):
Wasn't it? Russell fromcommunity financials, yeah,
yeah. This was him, yeah, thatwas him. Yes, there's companies
like that. That's all they do,and they are good at doing it,
because board members do need tohave accurate numbers to make
decisions based on so solve yourproblem of if you're if you're
not getting good informationaccurate. Information in a
timely manner, in time toprepare for your meeting. So you

(30:03):
know what you're all talkingabout. You got to fix that
problem. But otherwise, do talkabout it be the we is that where
we're at,

and go back to honesty, you know. Okay, if you
don't have it, you got to admitthat. Guess what? We just got it
the earlier day. We haven't gota chance to review them yet, but
we review them, we'll get backto you. Okay, okay, honestly.
You know, we saw someirregularities. Guess what?
We're gonna find out and getback to you on it. Okay, so,
honesty, honesty, honesty,honesty. Matter because we

(30:32):
honest with people. Okay, theycan feel your honesty if you
say, Listen, we don't know rightnow, because we've got these
reports in and we haven't had achance to review them properly.
You know, the board meeting. Youknow, we got them an hour ago.
And, you know, it's just unusualto get them an hour. We usually
get them, you know, two weeks inadvance, or a week in advance,
whatever it is, they'reconsistent. Now, if it's not

(30:54):
consistent, and you always getthem in the hour, say, Guess
what? This is our last time weget them an hour ahead of time.
For now, one we want them X daysahead of

time. Yeah, you know, it could be as I just
think could be as simple asthere's a new admin at the
management company, and thatperson sent you the finances for
the wrong Association, exactlylike, Oh, gee, oh yeah, that's
it. This is 120 unitAssociation, and we're 13 units
and glad we don't have theirproblems. Well, Kevin, as

(31:23):
always, it's great talking withyou. It's fun. It's informative.
Any closing thoughts to add atthis time?

I think we let out a lot of good information. I
think when I concluded bycommunication, openness,
transparency, those are thingsthat keep the again, as we say
all the time, get a temperaturedown. Our job is to not to
elevate the temperature, likewith the people were in civil we
got to say, Okay, this, this, doour jobs in the best way we can.
And guess what happens if we getsued? We're okay because we have

(31:52):
a defensible position. That'sall we want to make sure you
have.

I like that, and you don't have to be an
expert, but to have a workingunderstanding of the financials
at your association. Are thingsgoing up, things going down, and
what are your problems that youneed to solve? Well, we hope you
learned some HOA insights fromour discussion today that helps
you bring common sense to yourcommon areas. Thank you for
joining us today. We lookforward to bringing many more
episodes to you, week after weekafter week. We'll be here. It'll

(32:18):
be great to have you join us ona regular basis, spread the word

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125 | The Cost of Financial Mistakes for HOAs

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}125 | The Cost of Financial Mistakes for HOAs