What is a condo balance sheet?

What is a condo balance sheet?

The balance sheet in your HOA financial statement is the quickest and easiest way to get a feel for the financial strength of your community association. There are three parts to a balance sheet: assets, liabilities, and equity.

What should I look for in a condo balance sheet?

Requirements as per Section 66(2) of the Condo Act:

• a balance sheet.
• a statement of general operations.
• a statement of changes in a financial position.
• statement of reserve fund operations.
• prescribed information relating to the reserve fund study and the operation of the reserve fund.

What are condo financials?

They are a recurring report of the financial health of the Condominium Corporation used by a variety of stakeholders. decision making tool to ensure they are using fees collected by owners the best way possible • assist in making sure the Condominium Corporation is prepared appropriately for the future.

What are condo assets?

Generally, assets include cash and investments, as well as unpaid co-owner contributions. If the condo corporation also owns capital assets, such as the concierge’s apartment, these capital assets are also part of the assets.

What does an HOA balance sheet look like?

Assets = Liabilities + Equity. This is the basic formula that your HOA balance sheet should follow. It will provide a general snapshot of how well your association is doing financially at a certain point in time whether it be at the end of every month, quarter, or year.

How much reserve should a condo association have?

Typically (that is a dangerous word), most condominium associations should be setting aside 15% – 40% of their assessments towards Reserves. This ratio is lower for associations where each homeowner maintains their own home and the association only is responsible for some minimal common areas.

How do you budget for a condo?

5 Tips For Planning Next Year’s Condo Association Budget

1. Conduct a maintenance review and prioritize projects.
2. Review vendor contracts.
3. Evaluate insurance policies.
4. Look into alternative utility providers.
5. Reassess your reserves.

What should I look for when reviewing condo financial statements?

There are three major areas to focus on when reviewing financial statements: assets, income and expenses. If the building is a co-op, the status of the underlying mortgage is also very important.

What are the common areas of a condominium?

Common areas in condominium developments usually include the following:

• the lot, i.e., the dirt the development sits on.
• the buildings (the entire physical structure)
• plumbing lines.
• heating and air conditioning systems.
• electrical systems.
• windows.
• roofs.
• hallways and stairs.

What are HOA liabilities?

For an HOA, premises liability could arise from a slip-and-fall on an ice-covered sidewalk, a child’s injury at the community playground, or any other host of accidents that might happen within common areas.

How to create a budget for a condo association?

Here are some tips on how to create a budget for a successful condo association, based on all the information provided in this article thus far: Make a budget – A lot of associations still fall into the trap of not creating a budget in preparation for the coming year. It’s important to keep a regular date on which you’ll review the budget.

How much money do condo associations put into reserves?

Budget reserves – When preparing the budget, an association must ensure that a fraction of their income goes to the reserve account. The actual amount varies according to the association. Some condo associations will put as much as 20% of their total revenue into reserves.

Why do you need a rental income and expense worksheet?

Stay on top of your bookkeeping with this easy-to-use worksheet that you can personalize to meet the needs of your rental business. As a landlord, tracking your monthly rental income and expenses is an essential part of effectively managing your rental property and getting the most out of your investment.

Who is responsible for financial planning for condos?

Financial reporting is a joint effort between the board, the management company, and the outside accountant. But, a lot of condo boards will leave this and make other financial planning tasks to the treasurer. This is obviously a recipe for disaster and could cause accountability issues for the whole board.