Who Is Responsible for a Budget Deficit?

Hi Charles,

In an HOA, both the management company and the board have important roles when it comes to managing assessments receivables and addressing any budget deficits. Depending on the management contract, the management company is typically responsible for the day-to-day tasks, such as collecting assessments, sending billing notices, and following up on overdue accounts.

If there is a large deficit in receivables, the management company may be at fault if they have failed to properly track payments or follow up on overdue accounts. On the other hand, the board of directors has a fiduciary duty to oversee the HOA’s finances, approve the budget, and ensure that assessments are collected correctly and on time. The board also makes decisions on how to handle delinquencies, including whether to take legal action or set up payment plans.

Both parties share responsibility, but the board is ultimately responsible for overseeing the financial health of the association and holding the management company accountable for its duties.