Thursday 08/25/2016

What Do I Need to Know About My Homeowner Association?

Molly Stinn, CPA has experience with common interest realty associations, or CIRAs:

 

 

If you own a home or rental property in a condominium or in a housing development where the homeowners share certain common property, you are probably a member of a condominium owners or homeowners association – collectively referred to as a common interest realty association or CIRA. Whereas CIRA members own the exclusive use of their individual living quarters, they also share the exclusive use of certain property with all other property owners in the condo or development. The common property can be as simple as a foyer or common building entrance or as complex as multiple areas such as swimming pools, tennis courts, garages and the like.

CIRAs are separate legal entities which do not own the common property itself, but which are organized (1) to manage, maintain and repair the common property; (2) to provide certain services to the property owners, such as security; (3) to enforce compliance with the CIRA’s governing documents and state and local statutes; (4) to enforce rules for the mutual benefit of the members; (5) to equitably assess and collect fees from the members to support the association’s operations; and (6) to design programs to develop a sense of community.

Membership in CIRAs is typically automatic with the ownership of property within the condo or development; therefore the payment of dues is mandatory. Dues are quantified to cover the cost of association costs and also to cover the current and projected future estimated costs of major repairs and replacements of the common property.

As a property owner subject to a CIRA, it’s very important to understand how your association works, what common property you share with the other owners, what the annual maintenance costs are, what the future major repairs and replacements are projected to cost, and how well funded the association is in terms of completing these major repairs and replacements efficiently and timely.

Corrigan Krause works with several CIRAs, providing bookkeeping, financial reporting, tax services, consulting and attestation services. Helping association members understand the financial reporting related to their operations, including how they have identified, quantified and funded future major repairs and replacements is a key feature of these services.

If you need to know more about CIRAs, contact me!

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