In community associations, the collection of assessments is the primary source of revenue for the operation and maintenance of the community. Boards of Directors, with excess capital not currently allocated or needed in the immediate future, are turning to investment and financial planning as a means of maximizing these fixed, limited resources. Putting idle money to use can preserve the association’s purchasing power, increase its asset base and act as a hedge against the imposition of burdensome special assessments.

The current success of the nation’s economy and its various investment markets have encouraged many boards to consider investing as a means of improving an association’s financial position. Any cautious board, however, will want to consider the duties and ramifications of investing association money prior to undertaking such an endeavor. Two areas of concern, the standard of care associated with investing
association money and the development of an association investment policy, have been addressed by recent legislation in Colorado.

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