Homeowners facing financial hardship due to the COVID-19 pandemic can benefit from an extension to the federal foreclosure moratorium and new rules limiting collections of delinquent mortgage payments.
Some community association boards have sought guidance about whether using reserve funds is appropriate to address potential cashflow issues caused by COVID-19. Here are some things to consider.
Despite common areas and amenities being closed due to COVID-19, it’s still necessary for community associations to collect assessments to meet ongoing maintenance requirements and contractual obligations.
Failing to collect assessments may impair an association’s ability to pays its bills and provide essential services, but it’s important for boards to be flexible with homeowners who are facing financial hardship.
Just like for-profit businesses, association boards should work diligently to develop annual budgets that estimate revenue and expenses for the upcoming fiscal year. A properly drafted budget can help prevent reduced services, deteriorating property, or special assessments.