What is an HOA operating budget?

An Homeowner’s Association (HOA) operating budget is an annual financial plan that outlines the estimated costs of providing services and maintaining the common areas and amenities of a planned development. The budget also accounts for the financial transactions of the HOA, such as membership fees and assessments. An HOA operating budget is important for ensuring the long-term viability of an HOA and its ability to maintain common areas and amenities. In California, the Davis-Stirling Common Interest Development Act sets the legal framework for HOA operating budgets. A budget must be prepared each fiscal year, and the budget must follow a uniform budgeting format that includes estimated revenues and expenses. The budget must also include a reserve fund to cover the future costs of replacing and/or repairing common areas and amenities. Every HOA must adopt an annual budget and make it available for review by the membership. An annual budget is subject to amendment by the membership. Any amendments must be made by majority vote at a meeting of the membership or by written ballot. The budget must be approved at least 30 days before the start of the fiscal year. The budget must be reviewed and updated on an annual basis. An annual review allows the HOA to maintain financial solvency and ensure the availability of resources to maintain the common areas and amenities. The budget should also include provisions for contingencies, such as unexpected expenses and natural disasters. An HOA operating budget is an important tool for ensuring the long-term health and viability of an HOA. It provides the framework for maintaining the common areas and amenities of a planned development and helps to ensure the financial well being of the HOA and its members.

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What is an HOA operating budget?

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