In homeowner associations, two things are certain: taxes and HOA fees. While taxes go to the taxman, fees go to an HOA's management. It's from these fees that an HOA raises the money to maintain communal facilities, pay its workers and service providers, and put some aside for emergencies (reserve fund).
And just like taxes, HOA fees aren't cast in stone. They can go up or down, but mostly up. As an HOA board or management team, you know very well that rising inflation and increasing cost of services can occasion a need to increase the fee.
There's a problem, though. How do you implement the increase without running into problems with homeowners? Here are some practical tips and strategies.
Manage HOA Funds Transparently
It's not uncommon for homeowners to resist increases in homeowner association fees. The economy is tough for everyone, and homeowners are already dealing with rising mortgage costs.
However, if there is a clear justification for increasing HOA dues, most property owners will understand and pick up the new bill. This raises a crucial question: how do you justify the increase?
It all starts long before you actually decide it's time to increase the fee. If you've been managing HOA funds prudently and transparently, it's not difficult to show homeowners why an increase is warranted.
Involve homeowners in HOA budget planning and they'll see how much money is coming in and where it's going. They'll know when the HOA is stretched too thin and may be more open to an increase because they're all invested in the success of the community.
Transparent Communication
Nobody wants to wake up to a sudden bill increase. This is why most companies give customers notice to increase their bills several months before the change is effected.
As an HOA board, you must follow the same approach. Transparent communication involves informing homeowners of their intention to increase HOA fees and inviting their feedback on the matter. The best time to raise the agenda is during the HOA annual meeting.
In your communication with the homeowners, provide a breakdown of the HOA's budget, along with a detailed explanation of why the increase is necessary. Maintain an open line of communication where residents can ask questions and raise related concerns.
Follow Relevant Laws and Procedures
In Texas, HOAs are at liberty to set their fees and dues. While that's the case, communities have bylaws that have provisions for raising HOA assessments.
Ensure you have followed the relevant procedures when planning and implementing the increase. If the bylaws require a community vote on the issue, do so. Violating your bylaws will only delay your plans since homeowners can go to court to seek redress.
Navigating HOA Fees Increase with Ease
Increasing HOA fees is the last thing a board wants to be involved in, but there are instances when it's necessary. With these tips, you now know some of the steps you can take to ensure a smooth increase.
What's more, you can turn to a professional association manager for advice. PMI Values Your Casa is a full-service association management company that offers accounting and reporting, vendor management, maintenance and inspections, and other services.
Schedule a consultation to learn more about how we can support your HOA community.
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