Property Management

How to Increase HOA Dues and Handle Homeowner Concerns

Most associations review budgets at the annual meeting, or at a separate meeting called for this specific purpose. As costs (of utilities, insurance, labor, materials, etc) are constantly on the rise, it is almost always considered best practice for the HOA to adapt and collect more from the owners in dues. Other reasons to increase the fees are:

  • Inflation, or the inherent rising costs of operational expenses and vendors
  • Planning ahead — schedule large-scale maintenance, replacements, repairs, renovations, upgrades
  • Building a sufficient reserve for the Association

Although this is rarely a popular decision, there are ways to communicate the news of an increase to residents with minimal friction.

When issuing an increase, clear communication with the residents is key. Homeowner complaints are a normal part of the process, so it is only natural to expect some negative feedback from community members. However, there are steps you can take to make this process smoother.

Here are some things to keep in mind when notifying residents about assessment increases:

Notify residents as soon as possible

Nobody likes surprise expenses. Right after the board approves it, notify residents about the increase. Make sure to do this at least 30 days before the date the first higher assessment is due.

Remind homeowners what the dues are used for

From mortgages to utilities and other bills, people pay for so many things they may forget how important assessments are. When you notify them, offer more information than just the amount and the due date. Show the members the breakdown of the annual budget and where their money is going, whether it’s playground upgrades or new landscaping. When it comes to financial matters, transparency is usually appreciated.

Explain why the increase is necessary

When a homeowner has been paying the same annual dues for years on end, they may begin to wonder why it’s necessary to increase the amount in the first place. Whether it’s due to inflation or some other reason, explaining the “why” can be very helpful. Reassure residents that raising assessments is best practice and in the best interest of the association. Remain transparent throughout the process and give homeowners as many details as possible.

Stay positive

Be prepared for concerns, complaints, or even angry comments. However, as a board member, you should always stay positive and proactive, and do your utmost to help residents understand why this was a necessary action for the association. 

Although increasing assessments isn’t the most popular decision, keeping them low just to stay popular isn’t a good idea either and can lead to bigger financial problems later on. Sometimes all you can do is increase the dues, and that’s perfectly fine, as long as you stay honest, transparent, and proactive — and make sure that you always follow governing rules and state laws.

If you’d like our advice or input on your situation, we are always happy to help. Click here to learn more about our Association Management services.

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