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It’s OK to Raise Fees: Strategic Increases in HOA Dues Can Help Owners, Not Hurt Them

Posted by Jane F. Bolin, Esq. | Apr 20, 2016 | 0 Comments

If done right, you'll get everyone on board and increase property values.

It's never fun. But creating and managing the budget for your HOA is a responsibility that all boards have to contend with. And setting association dues is part of the deal—sometimes the part that makes you feel unpopular among homeowners. What HOA boards need to keep in mind and convey to their homeowners is that raising fees is not always harmful. On the contrary, it can actually help the community. Here's a quick look at how to do it as painlessly as possible and why it can be a positive move.

A strategy that works

First and foremost, it's important to remember that raising association fees should only be considered when there's a need for it. Increased fees can cause stress or backlash among the residents. But if the street lights in the neighborhood need to be replaced or the pool has to be resurfaced, for examples, it's a good idea to consider raising fees as an option to cover costs. If the board has met, gone over the budget for the coming year, and concluded that there just isn't enough money to pay for these updates or repairs, then it makes sense to adjust your HOA dues.

Come up with a realistic number

Once your board has met and decided that HOA fees need to be increased, the next step is to get all your ducks in a row and come up with a realistic number. Take into account all of the new expenses and your original costs that are spent on maintenance and upkeep of the neighborhood, and determine exactly how much the increase will need to be. Often, a raise of just $5 a month can help pay for repairs. The total amount you come up with depends on how many homes you have in addition to the new costs that you're going to incur.

Ease into it

To help make the increase easier for your residents, it's best to notify everyone before the change will take effect. Draft a letter that includes an explanation of the increase and any and all updates, repairs, or improvements that are planned. If possible, include the budget, and show estimates of the costs. And be sure to mail this information to the homeowners as early as possible.

How an increase can benefit the community

An increase in HOA fees, although not often a popular change, can actually help your community. Remember that your mission as an association board to is to maintain the community, keep common areas clean and well cared for, and to protect the value of the homes. An increase that allows you to do these things is an obvious advantage. Communities that never change, update, or improve things often find that property values in their neighborhood go down. And those that invest in projects like repaving sidewalks, adding LED lights, painting clubhouses, and resurfacing the pool—among other improvements—reap the benefits of increased values.

When you're faced with raising your HOA dues, remember that even if you follow all of the protocols and let your homeowners know ahead of time, you may still meet resistance. The key is to be totally transparent and informative, and to remember that you're doing what's necessary to maintain the beauty and value of your community.

For more information and resources on running your association, give us a call. Community Association Law is our focus, and we can offer you specialized services to help on a case-by-case basis, or under our new flat fee retainer program.

About the Author

Jane F. Bolin, Esq.

Founding Member, Managing Partner


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