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Financial management

The board conducts financial management on behalf of the HOA and corresponds with and on behalf of all owners of an apartment right in the HOA.

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Many tasks of an HOA arise from a legal obligation. Other tasks arise from the deed of division (articles of association) of the HOA and/or decisions of the Meeting. Use the overview below to read more directly about a specific topic:

Tasks from legal obligations

According to the law, the board must, on behalf of the HOA, carry out the following tasks among others:

  • Maintaining complete financial accounting, with all income and expenses, for the HOA;
  • Administering and managing bank accounts in the HOAs name and generating interest income on the HOAs reserve funds;
  • Paying the common costs and charges of the HOA on behalf of the HOA;
  • Annually preparing the balance sheet and operating statement of the HOA for the past association year;
  • Initiating the review of these annual financial statements by the HOAs audit committee and providing explanation upon request.

Tasks from the deed of division (articles of association)/household regulations

The board must, on behalf of the HOA, carry out the following tasks from the HOAs articles of association among others:

  • Annually preparing an HOA budget of expected income and expenses for that year;
  • Presenting a calculation of the advance contributions owed by individual owners to the HOA;
  • Collecting and administering member contributions and conducting correspondence about this;
  • Monitoring member payment arrears and, if necessary, arranging payment plans and/or preparing legal collection procedures to be conducted by third parties on behalf of the HOA.

Tasks from owners’ meeting decisions

From the Meeting’s decisions, the following tasks among others must be carried out by the board on behalf of the HOA:

  • Preparing a Multi-Year Financial Forecast to clarify whether sufficient funds are being reserved, in combination with operating costs for future years;
  • Advising the meeting on major maintenance expenses and how this relates to reserves;
  • Investigating subsidy possibilities for major maintenance matters.

Support a board by a professional HOA manager

Given the complexity of the above tasks for financial management, an HOA often decides to appoint a professional HOA manager in addition to the board. A professional HOA manager relieves the board of carrying out financial tasks. A professional HOA manager is engaged with knowledgeable execution. Periodically, the professional HOA manager reports to the board so that the board is fully informed of the HOAs operations but does not have to deal with daily affairs.

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Frequently asked questions

Members of a Homeowners Association (HOA) live together in a building or at a resort and must reach agreement on important topics. Therefore, we have created an overview of frequently asked questions for you. Is your question not listed? Click the button below or contact us.

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  • What does my advance contribution consist of?

    The owners’ meeting annually establishes a budget listing all costs that the HOA must pay for the HOAs operations. In the deed of division, an owner can find the allocation key of their apartment right. This allocation key is applied to distribute the total budget across all apartment rights.

  • Where can I find the deed of division and bylaws?

    The deed of division, including its bylaws and regulations, is a notarial deed that must at all times be registered with the Land Registry. Upon the transfer of an apartment right, the civil-law notary is required to provide this deed to the new owner. The Land Registry is a public register, meaning the deed can be requested directly from the Land Registry.

  • Who determines all matters within the HOA?

    The owners’ meeting is the highest governing body of the HOA. All decisions concerning the management of the common property are taken within this meeting. All apartment owners have access to the owners’ meeting. Decisions are adopted by an absolute majority of the votes cast.

  • What is major maintenance?

    Major maintenance is maintenance that is carried out in a fixed cycle and recurs regularly. Major maintenance can always be found by an owner on a Multi-Year Maintenance Plan (MYMP). This MYMP is approved annually at the owners’ meeting.

  • When can major maintenance be carried out?

    After a legally valid decision by the owners’ meeting and approved budget, orders can be issued for major maintenance. See the article “Major Maintenance within your HOA” for this.