One of the biggest challenges of running a homeowners association board is handling the dues. While residents usually want their homeowner’s association dues to be as low as possible, the neighborhood still needs a decent amount of funds to handle community needs. There are all sorts of pros and cons to raising HOA dues, but learning how to raise HOA dues the right way can help reduce some of the downsides.
Advantages of Increasing Your HOA Dues
While everyone loves low homeowners association dues, years of super low dues can actually hurt the community. There are all sorts of reasons for HOA dues that you should be aware of.
Keep Up With Inflation
If your HOA has been around for a few years, there’s a pretty big chance your dues are no longer adequate. Prices always rise over time due to inflation. Furthermore, costs for construction, maintenance, and the other tasks an HOA provides have risen even higher than inflation. There is a big demand for things like building new playgrounds and maintaining tennis courts, and there isn’t a lot of people willing to do this sort of manual labor. This has led to significantly higher prices. To meet rising costs, your HOA will most likely need to adjust dues every now and then.
Save for Large Community Upkeep
Keeping dues low can be a big problem when your community needs to fix bigger maintenance problems or even general HOA upkeep. While low dues might cover the cost of regular landscaping, they won’t pay for reroofing the community clubhouse. A good HOA needs to build up a decent savings fund to handle bigger maintenance projects. Increasing fees ensure you have a little leftover after routine expenses, so you can save for larger maintenance.
Increase Property Values
One of the main benefits of having an HOA in the first place is because it helps improve property values. When the entire community comes together to make the neighborhood a welcoming, well-kept place, people will pay more to live there. If your neighborhood looks run down and neglected, property values can plummet. Ultimately, being able to properly maintain the community and add extra amenities will improve your property values over time. This can provide a huge perk for all residents in the neighborhood.
Be Prepared for Major Emergencies
Another reason to have savings is in case of emergencies. Depending on the way your neighborhood is structured, the HOA might be responsible for things like water, electric lines, or roadways. These sorts of essentials are vulnerable to a variety of natural disasters and other issues. Even though your community most likely has insurance, you may need to pay deductibles, non-covered costs, and other expenses. Therefore, your HOA needs enough money saved up to promptly address these Homeowners Association Emergencies. Increasing dues makes it easier to save an emergency fund that can benefit the whole community.
Add More Exciting Amenities
If everyone in the neighborhood has been begging for a pool or more sidewalk lighting, it can definitely be a good idea to increase dues. Higher dues allow you to offer more community amenities that everyone can enjoy. This can create a better standard of living for residents and enhance the overall atmosphere of your neighborhood. Depending on how much your raise dues, you may be able to save up enough for new amenities within a surprisingly short amount of time.
Potential Downsides to Raising HOA Fees
With all the great HOA dues benefits, why wouldn’t a board increase fees? Most arguments against raising fees boil down to two basic issues.
Of course the main argument against higher HOA dues is simply that members do not like them. No one likes having to pay more money, especially when they’re used to paying far lower fees. It is fairly common for members to express discontentment when the HOA raises fees. This can cause a negative vibe in an otherwise peaceful and happy neighborhood. You might notice bitter arguments between neighbors, lengthy letters of complaint, or other signs of discontent.
Extra Work for the Board
When members of the neighborhood are grumpy, they may decide to start being intentionally difficult. During HOA meetings, much of your schedule might end up fielding complaints about higher dues. In some cases, unhappy homeowners may drag their feet on paying fees. This can lead to extra hassle for the HOA. Instead of focusing on improving the community, the board might find themselves spending a lot of time just trying to collect fees.
How to Raise HOA Dues Without Causing Conflicts
The potential backlash to higher homeowners association dues can be concerning, but there’s no need to let that keep you from adjusting your dues. Here are some ideas on how you can make the change more appealing to members.
- Prewarn the members of dues changes at least six months in advance. No one likes a surprise increase in fees.
- Encourage members to debate the changes by having an in depth discussion of the HOA budget.
- If dues were extremely low, compare them to average HOA dues in the area to reassure members they are still getting a good deal.
- Make a cost-benefit analysis that shows how higher fees can end up improving property values and community satisfaction in the long run.
- Provide value to the dues increase by planning community upgrades at the same time.
- Create a list of everything dues are used for, so you can remind members of the reason for HOA dues.
- Be honest and transparent, explain exactly why the dues are being raised and what members can do to keep dues low.
If your community is considering increasing its homeowner’s association dues, Silvercreek Association Management is here to help. Our team of professional management experts can carefully consider your neighborhood and assess what level of dues you need to meet community goals. With our customized solution, we can make sure every neighborhood resident’s individual needs are met. To learn more about our services, contact us now and schedule a proposal.