Timely Assessment Payment Saves Us All Money
Posted on January 3, 2020 12:22 PM by Melissa Gentry
Categories: Homeowner Articles
In order to meet its financial obligations, our association depends upon the timely receipt of our assessments from the owners. When our community's budget is approved by the Board, it assumes two things: the amount of income must equal the amount of expenses, and, that each homeowner will pay his or her maintenance assessment in a timely manner. If one or the other fails to happen, we have a cash-flow problem and it usually results in costing all of us more money in the long run.
Our communities depend entirely upon the assessments to pay its bills (insurance, landscapers, water, electricity, gas, management, etc.). Whenever homeowners are delinquent in paying their assessments it creates a "cash-flow shortage" that may prevent the association from paying it's bills in a timely manner. There is no other source of income available to make up for the shortage. If we "borrow" money from the reserves to pay for operating expenses, we are required to pay it back, thus we create even more expenses.
Ultimately, when even a few homeowners fail to pay their assessments on time it ends up costing us all more. That is because since most of our expenses are pre-determined, the only way to make up for a cash-flow problem is to increase the amount of money coming in, or in other words, raise our assessment amount. We can all take part in keeping our community's expenses down, and one of the best ways is to make sure that your assessment check is sent on time!