Managing your association means dealing with dues. From collecting them to setting them, your board needs to be on top of HOA dues. It also means having tough conversations about raising dues and looking thoroughly at the budget to see if there are areas to cut costs. If you’re worried that you may need to raise dues, we’re here to help you understand and plan how to raise HOA dues.
Check the bylaws and CC&Rs.
Often there will be a limit that the association has put on how much dues can be raised at one time. Look for a mention of a percentage increase that the board can enact in one year and a note that anything more than that will need to be voted on by members within the HOA.
Decide if there’s a necessity to substantially raise HOA dues.
Now is the time that many HOA boards are taking a look at past budgets and creating a budget for the upcoming year. Your budget can give insight into whether your association should implement a substantial increase in dues. Some of the key reasons for a big increase in dues include:
- Repairs and replacements need to be made for common areas.
- There was community damage after a disaster (flood, fire, etc.)
- Seeing a rise in the cost of operating expenses.
- There was a rise in the cost of maintenance vendors.
Look at what your HOA has in reserves.
After your HOA board has determined the increases in costs, your board will need to take a look at what they have in their reserve funds. If your reserve funds can handle taking on some of these extra costs while keeping enough set aside for emergencies, you may not have to face a large increase in dues.
Important reminders for your HOA.
Before you raise HOA dues, there are some important reminders we want you to keep in mind.
- Remember that due to inflation and unpredictable costs that are added on to essential services for the community, increasing dues is common.
- According to Texas law, a board can’t vote for due increases unless done at an open meeting of which all members have been provided notice.
- Your board doesn’t have to do it alone. Prism Realty Management is here to provide you with the knowledge, leadership, and support you need to not only make smart decisions about your HOA dues but about your association in general.
Contact Prism Realty Management if you have questions about how we can help your HOA run smoothly all year round. Learn about who we are, the services we offer, and our process, then give us a call at 512-676-5842.