02. Commonhold Association's accounts
The Commonhold Association's accounts serve as an essential financial record that sheds light on the association's monetary inflows, outflows, expenditures, and reserves. These detailed records capture transactions related to maintenance, repairs, amenities, and administrative costs. Access to these accounts provides a comprehensive understanding of the association's financial health and its ability to manage ongoing and future expenses.
Here is how you can explore and assess these accounts:
| Request financial statements | Reach out to the Commonhold Association and request copies of their financial statements. These documents typically include balance sheets, income statements, and cash flow statements. Reviewing these statements will give you a detailed overview of the association's financial performance. |
| Examine budgets and expenditures | Review the association's budgets for the current and past years. Compare the planned expenditures with the actual spending to assess financial management. Pay attention to major expenses, such as maintenance, repairs, and administrative costs, to understand how funds are allocated. |
| Check reserve funds | Assess the presence and status of reserve funds. Reserve funds are set aside for future major expenses or unforeseen repairs. Understanding the reserve funds is essential to ensure the association is financially prepared for upcoming obligations. |
| Analyse arrears and outstanding debts | Check for any arrears in contributions from unit-holders and outstanding debts. Unpaid contributions can impact the association's ability to cover expenses. Analysing these aspects provides insights into the financial discipline and stability of the Commonhold Association. |
| Consult financial professionals | If interpreting financial statements is challenging, seek assistance from financial professionals or accountants with expertise in property management. They can help you understand the accounts, identify any financial red flags, and assess the overall financial health of the Commonhold Association. |
| Attend association meetings | Participate in Commonhold Association meetings where financial matters are discussed. Meetings often provide an opportunity to ask questions, seek clarifications, and gain a better understanding of the association's financial decisions. |
| Verify compliance with legal requirements | Ensure that the Commonhold Association is in compliance with legal requirements related to financial reporting. Inquire about any audits or reviews conducted on the association's accounts, as these add an extra layer of transparency. |
By actively engaging with the Commonhold Association's accounts and seeking professional advice when needed, you can make informed assessments of its financial stability and management practices. This understanding is crucial for unit-holders to have confidence in the association's ability to sustain shared amenities and effectively manage financial responsibilities.