Why Homeowner Associations Get into Trouble

Following are the ten most common causes of trouble for homeowner associations:

  1. Inadequate assessments and reserves over a long period of time;
  2. Delinquencies leading to a loss of revenue;
  3. An inexperienced developer leaves the association with an inadequate budget;
  4. Prior boards have made a poor choice of hiring contractors resulting in wasted money;
  5. Prior boards have failed to get legal advice before making important decisions leading to costly errors;
  6. Prior boards have made poor choices in hiring management companies who have provided poor advice to the board resulting in expensive mistakes;
  7. Prior boards have made costly errors in purchasing insurance coverage for the association which has resulted in not maximizing coverage;
  8. Prior boards have deferred maintenance work which has resulted in more expensive, unnecessary repairs;
  9. Poor management decisions have resulted in the loss of existing insurance coverage and the need to acquire replacement insurance coverage from a second or third tier company at substantially higher premiums; and
  10. Poor decisions have resulted in the association paying expenses that should have been paid by an owner or owners.


Do any of these points apply to your association?


Coast Management of California