1	Overview of Homeowner and Condominium Associations According to the Community Associations Institute Research Foundation, 75% of association homeowners are very or extremely satisfied with their community. In 2004, there will be an estimated 260,000 associations in the United States. According to HOA-NC.com there are over 12,000 associations in North Carolina.
2	Characteristics of Associations Owners Pay assessments Are mandatory members Have to comply with restrictions Share an interest with the other owners in common areas
3	Types of Associations Cooperative Condominium Townhome,Patio,Garden Master Association Planned Community
4	Planned Community The association owns the common area Owners have a shared interest in the association Owners also own a lot or house
5	Condominium The individual owns a unit The owners, not the association, jointly own the common area
6	Townhome, Patio, Garden These are marketing, not legal terms You have to read the association legal documents to determine whether you live in a condominium, cooperative, planned community, or master association
7	Master Association A master association is a combination of two or more of the common-interest communities previously listed The owner is a member of their own sub-association and a member of the master association The master association often owns common area that is different from the common area owned by the sub-associations
8	Most Associations Have To… Enforce Rules
9	And Give or deny Architectural Approval for exterior changes
10	And Maintain Common Area
11	North Carolina State Laws that Govern Condominiums Chapter 47C-The Condominium Act or Chapter 47A-The Unit Ownership Act and Chapter 55A-Nonprofit Corporation Act
12	North Carolina State Laws that Govern Homeowner Associations The Planned Community Act The Nonprofit Corporation Act
13	The Four Types of Insurance Every Association Needs General Liability Worker’s Compensation Directors and Officers Liability Fidelity Bond Property Damage
14	Fiduciary Responsibility Board of Directors Board members are legally responsible for the finances of the association If the Board doesn’t understand the association’s financial problems it is breaching its duty of ordinary care Board is obligated to maintain or improve property values.
15	Role of President Presides at meetings The association representative Sets meeting agenda
16	Role of Treasurer Either does or insures that the following is done: Develops budget Maintains records of financial transitions Receives, safeguards, and disburses funds Prepares financial reports Files State and Federal tax returns
17	Role of Manager Has fiduciary responsibility to the association-not to the Board Implements Board policy Collects and deposits dues Provides financial records Supervises contractors such as landscapers and attorneys Receives complaints, requests, or questions from members Assist board in enforcing published Rules and Regulations Participates in preparation of the budget Inspects the property
18	Role of Auditor Provide independent opinion of accuracy of financial statements. Audit usually mandated by State Law (Unit Ownership Act) or by association’s legal documents Audit is different from Review or Compilation
19	Accounting Methods Used for Reports Cash Basis Records income when it is collected and expenses when they are paid Accrual Basis Records income when it is earned(or assessed to owners) and expenses when they are incurred or acquired Modified Accrual Records income and expenses on a cash basis with selected items recorded on an accrual basis
20	Types of Financial Statements Income Statement Records the financial transitions during a given period of time (generally for a month, quarter , or year) Balance Sheet Summary of a association’s financial position at a specific point in time. It show the assets, liabilities, and members’ equity Delinquency Report Who owes the association money and the collection action being taken Cash Disbursement Report Who the association has paid money to