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10 Signs Your HOA May Be Stealing From You

Your HOA should never be allowed to keep you in the dark.

By Heather Bien

Edited by Lauren Wellbank

Updated Dec. 26, 2024

Serving on a homeowners association board (HOA) may not be at the top of the list of things most people want to do with their time, but when you leave this responsibility to other people, you may find yourself on the outside looking in at a financially suspicious situation.

Most people probably have good intentions when they serve on the board — and hire trusted vendors, keep excellent bookkeeping records, and responsibly steward the HOA’s funds — every once in a while there’s a bad egg who can do everything from making surprising financial mistakes, to committing actual crimes.

And, while there should be complete financial transparency around how, when, and why your community’s HOA funds are used, that’s not always the case.

Here are the ten signs that could indicate your HOA is stealing from you.

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There are a lot of inaccuracies with their bookkeeping

Humans make mistakes. As such, sometimes, issues with bookkeeping are honest errors made by people who are not professional accountants.

But, other times inaccuracies in bookkeeping are being used to intentionally cover up financial crimes like embezzlement or fraud. For example: One mistake is probably something that should just be corrected while a pattern of mistakes could mean there’s something to investigate.

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Personal payments being made from the association’s account

It’s rare a check would be made out from an HOA to an individual unless it was a reimbursement for a repair that was deemed the responsibility of the association.

Anytime it appears checks are being made to individuals with no clear or verifiable reason, it raises questions about whether or not there is a chance that fraud is being committed.

Payments being made to non-existent companies

If your HOA is making payments to Sam’s Tree Service, but there’s no Sam’s Tree Service in your area, you may have reason to be alarmed.

That’s because sometimes bad actors can use fake companies — like Sam’s Tree Service in this example — as a pseudonym for someone on the HOA board who is looking to get a payday using the HOA’s funds.

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Board elections seem to be rigged

The board of an HOA has the inside view into what’s going on in the association’s finances. If it seems that the board elections are being rigged to keep a specific group of individuals in power, then there’s a possibility that they’re doing so to keep curious outsiders away from their shady business dealings.

Something with the vendors seems fishy

Most HOAs will go through a bid process each time they have a project that requires hiring an outside vendor. They’ll get bids from several vendors, compare the pricing and scope, then choose the best vendor for that specific project.

But, if it appears that your HOA is skipping that process and going with the same vendor time after time, there could be something more going on behind-the-scenes. There may be vendor kickbacks where the vendor pays an HOA board member to hire them, or an insider connection.

HOA funds are disappearing

There should be transparency around where HOA funds are going each time they’re used.

Whether it’s for utilities or landscaping, the board has to be clear with the owners how their money is being dispersed. If HOA funds are disappearing with no explanation, there’s a chance that there’s something nefarious at play.

Request a look into your HOA’s bank statements and records if you’re worried. If the board is reluctant to share, you may need to escalate the matter by following your organization’s bylaws, or even by getting outside counsel involved.

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Bank statements are inaccurate

Nobody wants to think their neighbors are capable of falsifying documents, but if the HOA’s bank statements aren’t matching up or appear inaccurate, there may be someone pulling the strings when no one is looking.

This is another time when you need to request access to view the statements, as well as an explanation, then look into further investigation if you believe there is illegal — or negligent — activity occurring.

Suspicious vendor pricing

Anytime a vendor changes its pricing, that should be flagged by the HOA board so the contract can be reassessed. If it becomes clear that vendors are being paid amounts significantly higher than their original contracts, you have good reason to wonder whether there’s some type of kickback or bribe being skimmed off the top.

Cash being taken out of checks

When someone deposits a check, there is a possibility that they can deposit part of it in the account and take the rest of it in cash.

If you see a discrepancy between the checks being written to the HOA and the amount being deposited, you should raise an immediate red flag. That extra cash could be lining a board member’s pockets.

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There’s no HOA annual review

A lack of an outside HOA annual review could simply mean that the board doesn’t quite have their processes in tip-top shape. But, if they’re resistant to implementing one, you should start raising your eyebrows — and maybe even insist that an annual financial review ASAP.

Bottom line

If you’re looking for a savvy way to eliminate some money stress, then serving on your HOA board could be a way to make some extra money. While most associations do not pay their board members, there are some that issue a small stipend for the work they do to manage the HOA.

The time commitment can be significant, depending on whether there are major projects or assessments going on in the community, but it can be an unexpected way to help pay for your mortgage and get ahead on your financial goals.

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