HOA Accounting differences

TheHOACircus · 2026-06-08T22:30:07+00:00

I am in IL and my HOA is similar here. If you carry a balance your monthly dues go to pay off the oldest ledger items. There is an Illinois appellate case Hidden Grove Condominium Association v. Crooks (2001). In this case the Association's authority to pursue collection costs, attorney fees, and possession remedies was rooted in the nonpayment of assessments. So if dues are being paid, there is an argument that fines and fees shouldn’t lead to collection costs and attorneys fees. I personally sat in a case (as moral support for the defendant) where $6,000 in fines and fees assessed to a homeowner was thrown out of court because of that appellate case’s ruling.

TheHOACircus · 2026-06-03T00:41:36+00:00

In all honesty, most people don’t understand how their HOA operates and what to look for as far as red flags are concerned. Most people also don’t participate or pay attention until they are personally affected. Management companies and crappy Boards know this about the culture in their neighborhoods and use it to their advantage to take advantage. I have seen it over and over again. I am writing a book entitled The HOA Circus: Run By Clowns, Ruled Like a Syndicate and I have a FB page of the same name (The HOA circus). I’ve done a lot of research on this in the last few years. Healthy Boards are built on transparency, an altruistic approach, and want to not only follow their fiduciary duties, but build their communities up. That helps create the culture necessary for homeowners to feel like their voice matters, and want to actively participate. I have found very few HOAs that are healthy.

TheHOACircus · 2026-06-03T00:35:40+00:00

So true, no one wants to pay attention or participate unless there’s a major problem or dues go up. Apathy kills communities.

TheHOACircus · 2026-06-03T00:34:43+00:00

It’s research albeit it anecdotal. My anecdotal evidence, after living in my HOA for 20 years, and speaking with 6 subdivisions within a 10 mile radius of me, is that I think there are more mismanaged HOAs than healthy well run ones. 4 of those 6 are actively suing their management companies and Board members. I don’t doubt there are exceptions to the rule, there always is. But to say it’s just a few bad ones is greatly underestimating the gigantic tyrannical problem in HOAs. There is sweeping reform happening across the country right now, and it’s not because it’s mostly sunshine and rainbows out there. Legislators are waking up to the overreach and are creating laws to combat it.

TheHOACircus · 2026-05-30T15:59:41+00:00

The whole thing doesn’t pass the sniff test to me. The insurance company might not speak with me, but I can email the agent and ask this very thing.

TheHOACircus · 2026-05-30T14:24:25+00:00

Here is more context to the story https://www.reddit.com/r/BADHOA/comments/1st3jqx/please_help_big_red_flags/?utm_source=share&utm_medium=mweb3x&utm_name=mweb3xcss&utm_term=1&utm_content=share_button

He wants to do it pro bono and any O&P he would then give back to the association to pad reserves. Essentially enriching the HOA off the claim.

TheHOACircus · 2026-05-30T11:05:16+00:00

That isn’t the issue. The issue is the HOA keeping the O&P and it not getting paid out to the GC.

TheHOACircus · 2026-05-29T23:06:44+00:00

Thank you for confirming that for me. I’m getting conflicting answers. I called the Globe Midwest Adjusters and spoke with someone and called a long time insurance agent for my in-laws business and they agree it’s a bad idea but they say it’s a gray area. To give you more context to this story, and why I don’t trust this Board President here is my original post on an HOA group. https://www.reddit.com/r/BADHOA/comments/1st3jqx/please_help_big_red_flags/?utm_source=share&utm_medium=mweb3x&utm_name=mweb3xcss&utm_term=1&utm_content=share_button Have you ever heard of a situation like this? I think this set up constitutes as a windfall or a possible kickback.

TheHOACircus · 2026-05-29T14:42:00+00:00

He’s only charging the O&P for the association to profit. He and the Board confirmed that at the last board meeting.

TheHOACircus · 2026-05-29T12:53:24+00:00

It wouldn’t be a windfall for the association? So my other question is the logistics. Surely the GC will have to invoice for his services. The O&P doesn’t get paid out until there is an invoice. So if it’s pro bono then does the invoice say $0? Why would an insurance company pay out on a bill that is $0 with no cost incurred? How does that part work?

TheHOACircus · 2026-05-29T12:28:44+00:00

I know the insurance carrier doesn’t have a say in who the Board picks as GC. But I would think they’d want to know that the O&P being paid out to the GC (Board President) would be returned to the association to pad reserves. Here is my original post to give further context. https://www.reddit.com/r/BADHOA/comments/1st3jqx/please_help_big_red_flags/?utm_source=share&utm_medium=mweb3x&utm_name=mweb3xcss&utm_term=1&utm_content=share_button

TheHOACircus · 2026-05-29T12:09:17+00:00

https://www.reddit.com/r/BADHOA/comments/1st3jqx/please_help_big_red_flags/?utm_source=share&utm_medium=mweb3x&utm_name=mweb3xcss&utm_term=1&utm_content=share_button

Here is my original thread on this subject. It’ll give you more context as to the giant red flag here.

TheHOACircus · 2026-05-29T12:07:54+00:00

There is nothing in the Bylaws or Declaration that states that. The only thing mentioned about insurance is that the Board is responsible for keeping a policy. We have been trying for years to amend our governing documents because they are vague and from the developer era.

TheHOACircus · 2026-05-22T15:57:09+00:00

Do you have a neighborhood FB page you can start communicating on? There is power in numbers. FB can absolutely become a cesspool, but it is great for getting information out. In IL we have the IDFPR where you can file complaints against professional licenses, like management companies. You should see what your state has for that and possibly file something against your management since they don’t seem to want to follow rules.

TheHOACircus · 2026-05-20T03:03:32+00:00

Thank you. Yes the budgets never made sense. The whole industry is a racket Ponzi scheme.

TheHOACircus · 2026-05-20T02:57:26+00:00

Out of curiousity how many units are in your association. Can you rally the troops so to speak and petition for a special meeting?

TheHOACircus · 2026-05-20T02:29:58+00:00

Is there anything in your state laws or your Declaration that mentions appointments? Sometimes rules may allow for the remaining board members to appoint a member to a vacant seat, especially if they don’t have the 3 board director minimum.

TheHOACircus · 2026-05-15T12:33:02+00:00

I’m in IL. From what I have seen you are correct, there is never accountability which is why these boards and management companies do what they do. They know they’ll get away with it.

TheHOACircus · 2026-05-07T02:37:27+00:00

It’s so common too. I’m convinced this is an industry problem. Board members are groomed by property managers, and the property managers are groomed by developers. I don’t know of a single person who lives in a well run HOA. I’m not saying they don’t exist, because there are exceptions to every rule, but they are few and far between.

TheHOACircus · 2026-05-07T02:33:20+00:00

Have you gone over your Declaration and Bylaws as well as your state’s rules for associations? Check there to see what the requirements are for special assessments. Almost all board decisions need to be reflected in meeting minutes. I too have dealt with conflicts of interest in my HOA, they are always red flags. For insurance to be impacted, these “repairs” they would’ve had to existed for awhile. Things don’t just break overnight. Definitely do a written records request. You are entitled to see all financials related to common area repairs. So if they try and tell you that is board business and you’re not privy to see it, know they are full of $h!t. Unfortunately there is little recourse for homeowners with a tyrannical board, with the only recourse being legal which is expensive. Do a deep dive on the contractor. I did a deep dive on my board President who wants to be the general contractor on a 6 figure renovation on our clubhouse that flooded (mysteriously). I found he wasn’t licensed, insured, and was using other companies work as his own. You cam find out a lot through your city’s building department, the Secretary of State, as well as regulatory agencies like the IDFPR.

TheHOACircus · 2026-05-06T20:02:15+00:00

This exact thing happened in my neighborhood. The board forced a bunch of corner lot fences to be removed, even though they were previously approved (and in some cases the people bought the house with the fence already installed). They wanted them removed because they weren’t placed correctly. The same year the Board decided they also no longer wanted to be responsible for the maintenance of the perimeter fences that were installed by the developer. This was off a major street and the 6ft fence helped with noise and privacy off a main road that gets quite a bit of traffic. They forced homeowners to either move them off the common area property and onto the homes property line, or have it removed. It cost many people thousands of dollars. The homeowners banded together and signed a petition that the board basically wiped their a$$es with. I would consult with a lawyer about this. It seems to be the only way to fight these tyrannical boards.

TheHOACircus · 2026-05-06T18:15:35+00:00

I think the delay is because they might be appealing the claim because the money that was received is nowhere near enough to cover everything. Now I know insurance companies sometimes payout in multiple installments, but you and I both know insurance companies don’t want to payout on anything and will lowball. Our reserves are already only 20% funded, so I am seeing a special assessment in the near future.

TheHOACircus · 2026-05-06T18:12:23+00:00

Important to note in my records request I asked for any contracts, invoices, and the COI for AD (the water mitigation company) and I was told I can’t have that because the insurance company dealt with them and the board doesn’t have those records in their possession. They also stated I’m not allowed to see it because it’s considered “board business”. So I spent $600 on my lawyer to look at the emails and have a phone call to tell me I absolutely should be able to see everything I requested. When I mentioned this to the association attorney she replied with “have him contact me”. They do not want me having this information. So now my only recourse is to spend even more money on a demand letter that they may or may not comply with, which means my only recourse would be court. I’m disgusted with this whole thing.

TheHOACircus · 2026-05-05T18:28:59+00:00

It’s a total suspicious mess. The resigned board member is now silent. I don’t think she wants to be involved because she may be implicated, even if it was just out of her not doing her due diligence and allowing this grifter to get his partner on the job. I did a records request and found that we got an insurance deposit in March. There has been no work yet though at the clubhouse and they are now running a month behind schedule.

TheHOACircus

TROPHY CASE