If you’re a board member of your Community Association, then you already understand that over time expenses can creep higher and higher or emergency projects can deplete reserve accounts no matter how frugal you have been. In these instances, you may need to raise your Association’s dues.
This doesn’t always go over well with homeowners and can create some friction throughout a community. Next time the issue of raising dues comes up, keep these association management tips in mind as you pursue acquiring additional funds.
How High Can Dues Be Raised?
The amount the Board can increase dues really depends on the circumstances and bylaws of the Association. These governing documents will most likely have a ceiling in place to prevent extravagant increases.
What To Avoid When Faced With Raising Dues
Sometimes Board members can’t decide if they should increase dues because they don’t want to be seen as “the bad guys” or want to be considerate of fixed income owners. The problem with trying to keep fees set without considering actual expenses is that eventually, funds will run out and the community will then need to either take out a loan or levy a Special Assessment to cover costs.
Both options are not ideal when the alternative is small increases at regular intervals to cover operating costs and actively fund reserves. Raising dues a little bit every year or two is a lot easier for owners to digest than a large sum Special Assessment or the Association accruing interest through a large loan.
Responding To Average Homeowner Reactions
Even with these considerations, your Board is most likely going to face some form of backlash from members in the community. Changes within the neighborhood are a big deal, so try to mitigate concerns and negative statements with further reasoning behind the decision.
Even if your Association’s documents allow for the Board to raise dues at their discretion, it would still be a good idea to hold a meeting so that owners can ask questions so that they may fully understand why the increase is necessary.
Let Goodwin & Company Help You Handle The Details
Although every Board should understand that increases in dues are often necessary, no one really wants to be the one responsible for increasing your neighbors’ bills. With the help of a team like Goodwin & Company, you can minimize conflict between the Board and community members because we’ll do the complicated work for you. Let us handle the details while you take care of your Association. Contact us today to find out more about our services.