Controlling Condo Cash Crashes
October 22, 2009 - Posted in Pattaya Articles
Imagine you live in a desirable city in a desirable condo and that all residents have only a planned repair bill submitted by their Homeowner Association (HOA) for $ 80,000 was – per dwelling unit. It may (and still is) happening.
Moreover, demand is all legal and above board presented: The estimates were three times and the required spare parts / repairs were engineer-backed, so there is no room for argument!
Wow! This is a real eye-opener, you canCruising along quite happily and suddenly you are in debt – big time! It raises many questions about the condo owners.
Do you know how much has your HOA in its treasury? Do you know what type of insurance is your HOA? Does your HOA no limits in their agreement, the amount required to be written in a year?
Is it common (or if not, should it be?) For all to pay a small fee once a year so that funds can accumulate against this type of disaster? WhenWord is "reasonable use" has been set – a millionaire might think that $ 80,000 is appropriate.
Do you know where and how the HOA, your monthly earnings if they are not used to invest? All others seem to lose their cash holdings in those days – is the HOA do the same? When was the last one was up-to-date (up-to-date is the key term here) a statement that you saw from the board?
Very few investments are safe at the moment, perhaps a board and members shouldDiscussion about the HOA's funds. In the HOA mandate in relation to the investment of reserve funds of the HOA wording of the investment policy is not appropriate for these days of price increases and an unstable economy.
For example: to achieve the highest long-term investment success is not a priority in a falling economy, such as "no risk of loss of principal"?
Safe to invest to replace profits; Treasury bills, notes or bonds are still considered safe. Certificates ofDeposit deemed to be safe in FDIC insured financial institutions, but they must be less than U.S. $ 100,000 (the usual government insured limit) per institution.
Certain sums must be "liquid" and this can be invested in short-term securities (approximately three per month) with different maturities. (This is as "laddering," and it will ensure that some funds available for unforeseen emergencies without paying a penalty to escape.) Is
While you are checking the wholefinancial situation of the HOA, make sure that other safety devices are available. For example, that two signatures are required for alterations and withdrawals) (usually the treasurer and the president, that made all investments in the name of the HOA will be, and that regular (monthly maybe?) Investment valuations in the meetings of the Board of Directors for the supplied short term at least.
These precautions are only, what would you take with your own money – oh yes, it's your own money!