Get 1 year of free community web site hosting from Community123.com!
Monday, October 18, 2021











HOATalk is a free service of Community123.com:

Easy to use website tools to help your board
Only members have access to all features.
Click here to join HOATalk for Free! Members click here to login and access all features.
Subject: HOA Dues Increase Letter Example Needed
Prev Next
Please login to post a reply (click Member Login on the menu).
Author Messages
DavidP17
(Maryland)

Posts:3


11/21/2011 8:13 AM  
HI everyone,

We recently took over the HOA from the builder. After reviewing the budget we need to increase the rate by $25 annually. Does anyone have an example letter to increase the HOA dues? Just trying to figure out the best way to proceed. Thanks
DavidW5
(North Carolina)

Posts:565


11/21/2011 8:31 AM  
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.

PeterD3
(Florida)

Posts:708


11/21/2011 10:02 AM  
How about publish the 'old' and the 'new' budget in a spreadsheet and you won't need a letter.

Frankly our budget changes a few $s year to year and we don't use letters to explain the change. It's all right there on a simple document.
SheliaH
(Indiana)

Posts:4220


11/21/2011 10:06 AM  
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.
DavidP17
(Maryland)

Posts:3


11/21/2011 10:56 AM  
Thanks everyone.
SusanW1
(Michigan)

Posts:5202


11/21/2011 11:41 AM  
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 . . .
TimB4
(Virginia)

Posts:17766


11/21/2011 12:34 PM  
Hi David,

Here are a couple of examples for you:


Attachment: 1112134851571.doc
Attachment: 1112134864054.doc

BB5
(Missouri)

Posts:145


11/22/2011 2:40 PM  
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 ?
TimB4
(Virginia)

Posts:17766


11/22/2011 3:10 PM  
The amount of the annual assessment should be sent to each member at the address on file with the Association. The reason behind the increase being sent would depend on your Associations governing documents.

What do your governing documents say about notifying the membership about the annual assessment?
DavidP17
(Maryland)

Posts:3


11/23/2011 6:16 AM  
I have to check the documents to make sure I have the correct wording...will look tonight. thanks
BradP
(Kansas)

Posts:2640


11/23/2011 7:06 AM  
Posted By BB5 on 11/22/2011 2:40 PM
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 ?




BB5...that is a tricky slope...technically reading our bylaws and CC&R's there is absolutely no mention of the HOA having to inform members of any monies owed, there is just a reference to assessments due and when. I would say good business practice is that information needs to be send to everyone. You also might want to check your state regs, in Kansas you can not take away voting privileges for certain things even if you are behind.
KellyM3
(North Carolina)

Posts:1784


11/26/2011 1:58 PM  
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)
Please login to post a reply (click Member Login on the menu).
Forums > Homeowner Association > HOA Discussions > HOA Dues Increase Letter Example Needed



Only members have access to all features.
Click here to join HOATalk for Free! Members click here to login and access all features.







General Legal Notice:  The content of forum messages are from the posting member and have not been reviewed nor endorsed by HOATalk.com.  Messages posted by HOATalk or other members are for informational purposes only, are not legal or professional advice and do not constitute an attorney-client relationship.  Readers should not act upon this information without seeking professional counsel.  HOATalk is not a licensed attorney, CPA, tax advisor, financial advisor or any other licensed professional.  HOATalk accepts ads from sponsors but does not verify sponsor qualifications nor endorse/guarantee any sponsor's product or service.
Legal Notice For Messages Posted by Sponsoring Attorneys: This message has been prepared by the sponsoring attorney for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship. Readers of HOATalk.com should not act on this information without seeking professional counsel. Please do not send any sponsoring attorney confidential information unless you speak with the sponsoring attorney or an attorney from the sponsoring attorney’s firm and get authorization to send that information to them. If you wish to initiate possible representation, please contact an attorney in the firm of the sponsoring attorney. Sponsoring attorneys that post messages here are licensed to practice law in a specific state or states as indicated in their message signature or sponsor’s profile page. (NOTE: A ‘sponsoring attorney’ is an attorney that is a HOATalk.com official sponsor and is identified as such in the posted message or on our sponsor page.)

Copyright HOA Talk.com, A Service of Community123 LLC ( Homeowners Association Discussions )   Terms Of Use  Privacy Statement