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Forums > Homeowner Association > HOA Discussions

Subject: HOA investments

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GlenL
(Ohio)

Posts:1466

07/25/2008 12:48 PM
Posted By SusanW1 on 07/25/2008 6:22 AM I am leary of the word "investing". Can someone explain if HOA's can invest (like in the stock market?) Or do you mean depositing funds in high interest bearing accounts? I'd have a fit if I knew the Board was playing the stock markets with my dues money. Susan somewhere in your documents there should be the power to invest the funds. This is from our Articles of Incorporation: To invest its funds in any shares or other securities of another corporation, business or undertaking or of a government, governmental authority or governmental subdivision; and This was added to our By-Laws by the State: 5311.081 (20) Invest excess funds in investments that meet standards for fiduciary investments under Ohio law While investing in the stock market for long term growth is allowed. IMO things like Future Speculation or day trading where you are putting the principle at substantial risk are improper and depending on the investment may be illegal. Just like a collection policy the Association should have a written investment policy stating just what types of investing can be done. While it wouldn't bother me to invest in a Blue Chip Mutual Fund because while there is risk to the investment it is an acceptable one. I don't however want the Board investing my money in the president's spouse's second cousin's new business, even if it is technically permissible.

LoriE
(Indiana)

Posts:34

12/10/2008 1:51 PM
Here's a question from a different angle: The idea of a reserve fund (sinking fund) is great but here is my question. -- How can a BoD sit on our money and not spend it on the items that have been approved? The BoD continues to raise our dues, increasing the reserves, but never spends anything out of those reserves. How can this happen? Is there a point in time when the BoD should be refunding some of those funds for non-use? Just curious!!

MaryA1
(Arizona)

Posts:2498

12/10/2008 2:33 PM
Lori, Monies deposited into a reserve fund are earmarked for specific long-term repair, maint or acquisition. Are there elements of the reserve fund that are in need of repair or replacement? If not, then there may be no need to spend any of the reserve monies at this time.

LoriE
(Indiana)

Posts:34

12/10/2008 2:57 PM
but our BoD doesn't spend the money for what it is earmarked for ... and they are still asking for more. They tried to get the association to approve a special assessment for a bridge repair they did not know how much it was going to cost, but wanted the homeowners to write them a check.

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Forums > Homeowner Association > HOA Discussions > HOA investments

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