The Foundation for Community Association Research estimates that as of 2022, there were between 359,000 and 363,000 homeowner associations in the U.S.
With so many Americans experiencing HOA living, there are a lot of questions about HOA fees. HOA dues are a necessary and mandatory part of living in a planned community.
Just like anything else, HOA assessments increase over time. Do you as a homeowner find it frustrating? Keep reading to find out why your assessments may be increasing and what you can do about it.
Inflation
The U.S. has been experiencing record inflation over the last few years. As prices rise, the HOA budget increases. Everything from pool maintenance to landscaping is more costly. Those increased prices are passed onto the HOA homeowners.
The HOA board can cut lower priority expenses, but most services are necessary for the functioning of the community.
Special Assessments
Does the community pool need resurfacing? Does the roof on the condo building need updating? When projects like this arise, the HOA board may have to charge homeowners a special assessment to cover the cost.
Homeowner associations should have reserve funds for occasions like this, but inflation has likely cut into the reserves.
Review The CC&Rs
The community's Declaration of Covenants, Conditions, Restrictions, and Easements (CC&Rs) contains all the rules that govern the operation of an HOA. You'll sometimes find limits on how much the HOA can increase dues and assessments.
For example, the CC&Rs might limit increases to 2% or a maximum dollar amount like $100 for the year. The only way to know if there are limitations is to review the CC&Rs.
Limitations Under State Laws
Some states have laws regulating assessments and fee increases. The laws might limit it to a certain amount each year. Some may require the approval of homeowners before they can raise dues by more than a specific percentage.
Do some research to find out the laws in your state regarding assessment increases.
Double-Edged Sword
Limiting increases whether under state law or CC&Rs can create a crisis for the community. If the limitations keep the HOA from collecting the amount of money necessary to operate and maintain the community, the community common areas may fall into disrepair.
A shortage of funds puts your investment at risk as your home's value might decrease. Saving a few dollars on your monthly assessment is not worth what may follow.
Remember that the dues keep the community operating and looking its best, which in turn protects your investment.
HOA Assessments
If you think your homeowners association has unfairly raised your assessments, it's a good idea to review state law and the governing documents of the HOA community.
If you need any clarification about the rules and regulations of HOA assessments, we at PMI Cross Timbers are here for you. Give us a call at 682.628.0483 or schedule a consult through our website.
We are a dedicated team of professionals with a goal of elevating the standards of association management and revolutionizing the way associations thrive.
