HOA Dues Increase Letter Example Needed

David,

Based on what you are asking, I assume you do not have a management company. If you do, they should have a standard letter for that purpose.

You said that you just took over from the builder. Had the builder prepared a budget for next year? If so, did that show a deficit? If there has not been a budget prepared for next year, how do you know that the dues need to be increased? Are there items in the budget that can be reduced to offset the deficit rather than raise the dues?

If you have considered those alternatives and still feel that a dues increase is necessary, your letter should explain why the increase is needed, what expense reductions you considered and why those were not implemented.

My experience has been that the builder had little or no incentive to operate the HOA efficiently, since it was your money being spent, not his. We were able to drastically reduce our operating expenses when we took over by renegotiating the contracts for services (e.g trash removal, snow removal, etc.). We have been able to provide additional services and amenities without a dues increase in 5 years.

I don't have the one we wrote three years ago, but since I helped write it, there are a few things you should emphasize

1 - what your board is doing to control costs
2- areas where costs exceeded expectations (e.g. you got more snow than expected, had to replant lawns because of drought)
3 - what homeowners can do to help control costs (e.g. accepting the newsletter via email can save printing and postage, recommend contractors who are willing to work with HOAs, etc).

Be sure you include a copy of the upcoming year's budget and a recap of the current year's budget so people can see for themselves where the money's going.

If this increase must be approved by the Members, then you can announce that there will be a motion to approve the new dues rateand announce when and where the vote will take place.

Then you can present your backup reasons for an increase to the members, who must approve it.

If this increase is within the amount allowed by the board to do without a Memembership vote, then announce the new rate, present the reasons why and hope the stuff doesn't hit the fan . . .

A vote was taken at Sept. meeting to increase dues $150.00 per year (no budget) or reason for increase. To the best of my knowledge those unable to attend were not sent this info. We are not a year round community (lake homes) but if you haven't paid you are not allowed to vote and according to by-laws would affect the number needed to establish a quorum at next meeting shouldn't this info. be sent to everyone ? By-Laws say only upon request. (Request stirred it !!!!!!!) The by-laws also read a lein can be filed if dues have not been paid within thirty days of being due. Who is responsible to notify homeowners ?

I have to check the documents to make sure I have the correct wording...will look tonight. thanks

Many boards don't have to notify dues payers of dues increases, provided the increase is in line with a barometer like inflation. Of course, every situation can be different.

That said, I think it's good protocol to keep your community informed and have a good reasonable reason for $2.50/month increase ($25/year sounds "high"). I've found even my HOA critics will hear me out and I thank them for caring enough to challenge my assessment of a budget situation.

Information and openness has quelled all my "problems" in dealing with dues payers. Maybe I'm lucky, or maybe it's the fact that I resist new amenity additions while maintenance of the existing legacy amenities need periodic work.

Talk straight. The fewer sentences the better. Be clear and offer yourself to answer questions by phone or email (a written record)