This is arguably the most well-known and critically important HOA process – the transition of management from a developer-controlled association to a resident-controlled HOA.
The transition process will almost certainly require external assistance from a CPA, lawyer, and others. It is highly recommended to bring in a neutral third party to review the books, validate your community’s financial health, train the new treasurer, and even help resolve potential conflicts during the turnover.
The transition process also requires close collaboration between the developer and the HOA members, which is accounted for in the checklist with approval tasks that require review and approval from both parties before moving on to the next stage of the transition.
In brief, here are the six key things you should do as part of the transition process.
- Inspect all financial documentation (budget, bank statements, tax returns, vendor contracts, etc.)
- Conduct a financial audit (highly recommended to hire an experienced CPA)
- Conduct a reserve study to evaluate the health of the reserve fund
- Ensure compliance with state laws and CCRs
- Determine the HOA board of directors (election) and conduct training with the developer
- Hire an engineer to inspect the properties
This HOA Transition Checklist will take you through each of the above tasks while maintaining communication with other stakeholders such as the developer and external professionals assisting you with the transition.
Bear in mind that the best time to start your transition is about 4-6 months before the official developer turnover. If you wait until during (or after) the turnover process, you may find it more difficult to get access to important records from the developer.
A little info about Process Street
Process Street is superpowered checklists. By using our software to document your processes, you are instantly creating an actionable workflow in which tasks can be assigned to team members, automated, and monitored in real-time to ensure they are being executed as intended, each and every time.
The point is to minimize human error, increase accountability, and provide employees with all of the tools and information necessary to complete their tasks as effectively as possible.