About Darla Ellingson

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So far Darla Ellingson has created 10 blog entries.

Financial Audits of Condominium Associations

Considering a financial audit? We'll review financial audits of condominium associations (Chapter 514B). There is no audit requirement for Planned Community Associations (Chapter 421J). Most Board of Directors of condominium associations and their managing agents do not give much thought to the auditor’s report. As long as the auditor issues a “clean opinion” [...]

2017-10-17T15:37:18+00:00 Financial|

Solar Energy Credit Pass-Thru to Unit Owners

Maui County has the highest electrical rates in the nation. Currently, that rate averages $0.38/kwh for homeowner associations. Hawaii as a whole has more photovoltaic (PV) panels installed per capita than any other state in the nation. So, it makes a great deal of sense for associations to start the discussion on whether [...]

2017-10-17T13:39:56+00:00 Renewable Energy|

Tax Issues for Owners in Homeowner Type Associations

There are various income and related tax issues faced by unit owners in homeowner type associations. Due to space limitations, it is not meant to be a comprehensive discussion of these tax issues. Such a document would easily run to several hundred pages. Our hope is that you are made aware of these [...]

2017-10-17T19:19:43+00:00 Tax Issues|

Replacement Reservers for Condominium Associations

Replacement reserve law as it applies to condominiums can be complex. We'll navigate through its history, legal requirements, tax issues accounting and calculation. The definition of “replacement reserves " is defined in the law as "... funds for the upkeep, repair, or replacement of those parts of the property, including but not limited [...]

2017-10-17T19:29:12+00:00 Financial|

Internal Controls to Prevent Thefts from Internal Sources

Business losses due to employee thefts amount to billions of dollars every year. The most important strategy used to minimize such losses is a good system of internal controls. Internal controls do not prevent thefts; however, a good system will detect such threats on a timely basis. Basically, an internal control system separates [...]

2017-10-17T14:29:25+00:00 Financial|

Embezzlement of Association Funds – Awareness and Prevention

The potential for theft or unauthorized use of association funds should be one of the highest priorities of every director. Unfortunately issues dealing with governance, budgetary and financial concerns, repairs and maintenance, enforcement of house rules, policies, and other association issues usually take precedence. Most boards assume that the funds handled by the [...]

2017-10-17T16:05:36+00:00 Financial|

GET, TAT & TOT Requirements for Homeowner Associations

Do you get confused distinguishing between GET, TAT and TOT for Homeowner Associations? Hawaii General Excise Tax (“GET”), Hawaii Transient Accommodations Tax (“TAT”) and the Hawaii Time-Share Occupancy Tax (“TOT”)- these three taxes are based on gross income or receipts. In other words, they are separate and distinct from the Hawaii income tax [...]

2017-10-17T19:26:46+00:00 Tax Issues|

Taxation of Condominium, Community and Homeowner Associations

The law is clear that an association’s Board of Directors is responsible for the filing of the annual federal and State income tax returns, regardless of who actually prepares them. In addition, the law imposes a fiduciary duty on directors. As a result, Board members should take an active role in understanding the [...]

2017-10-17T18:56:00+00:00 Tax Issues|

Water Leak Insurance Claims in Community Associations

Do you know what to expect when there is an insurance claim as a result of water leaks? We'll focus on the drippy problem here (not other types of insurance, i.e. D&O, fire, liability, flood and other policies typically carried by community/homeowner associations). There continues to be a great deal of misunderstanding [...]

Investment Issues for Homeowner Associations – FDIC Insurance, CDARS, Laddering and Policies

Associations should be well-versed in how to invest excess funds. Homeowner associations include condominiums (Ch. 514B), planned community associations (Ch. 421J) and time-sharing plans (Ch. 514E). The only definitive guide to the investment of excess association funds is found in Ch. 514B-149, Association fiscal matters; handling and disbursement of funds. However, as a [...]

2017-10-17T19:16:47+00:00 Financial|
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