If you reside in a planned community, homeowner association (HOA) fees may be a fact of life. Associations are generally duty-bound to channel these funds toward maintaining common services, areas and amenities.
Rising HOA costs can strain your budget and make you question if you can continue to afford to live in a planned community. It can help to understand how often and by how much your HOA board should increase these fees. This way, you can leverage resources when rate hikes come at you unexpectedly.
Types of HOA fees and their adjustments
The basic HOA fees cover expenses for keeping the landscaping, shared facilities and common areas looking presentable. They’re also necessary for insurance and providing security for the community. Additionally, your HOA may request additional fees for large projects like unforeseen repairs and replacements. These supplemental budgetary needs might result in fee adjustments being introduced by the HOA board. The HOA should use financial forecasts, annual budgets and reserve studies to help ensure that the fee increase is reasonable.
How much and how often can HOA boards raise fees?
Local regulations, state laws and the HOA boards determine the frequency and amount by which an HOA can increase fees. Most associations hold an annual budget review to determine if there is a need for an increase. Before approving an increase, the board should try to ensure it does not exceed the caps imposed by the state.
Homeowner recourse against fee increases
Suppose you and many other homeowners within your community feel like the HOA fee increases are too frequent and unreasonable; there might be something you can do about your situation. A good place to begin is to familiarize yourself with the HOA’s governing documents with appropriate legal guidance. This way, your community can better understand the legal framework for fee increases and homeowner rights. You can also benefit from attending HOA meetings to gain insights on budgetary fee proposals. During HOA meetings, you have the right to voice your concerns and influence budgetary decisions.
While HOA fee increases are sometimes necessary for effective community management, your HOA should make changes within the limits set by their governing documents and state laws. You should know that you and your fellow homeowners have several methods to combat unreasonable increases, from participating in meetings to pursuing a lawsuit in extreme cases. Understanding your rights and being proactive is key to helping ensure that HOA costs remain fair and manageable.