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Subject: Yearly Dues
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Author Messages
JimD15
(Florida)

Posts:21


12/04/2012 12:14 PM  
My very small SFH HOA collects fees yearly. We have no common areas to maintain, no street maintenance, everyone is responsible for their own home and yard. What we do have is an entrance and a sign which the HOA pays about $80 a month to maintain. So after years of collecting dues (everyone in the HOA is current) we have a balance over $10k. Just about every homeowner is in compliance with the bylaws and the HOA is not collecting fines.

Some members have suggested lowering dues about $20 per year. I wondering how long it will take before a homeowner suggests that a portion of the dues be refunded. We have an interest bearing acct which doesn't make too much in interest and no other investments.

The present BMs want the money saved for any future legal advice or if one of us are sued by a homeowner over a violation dispute.

Any suggestions if a homeowner brings up this subject in the future? Thanks for any replies.
TimB4
(Virginia)

Posts:16704


12/04/2012 12:29 PM  
Even if all you have is an entrance area that needs maintained, there should be Reserves set aside for replacement of the actual sign. If you want, you may want to include saving funds for insurance deductibles.

Assessments should be set based on budgets.
If you have that much extra money, it sounds like past boards were not properly preparing a budget and perhaps just rubber stamping the previous years budget without looking at actual and/or expected expenses.

CarolF
(Florida)

Posts:433


12/04/2012 1:10 PM  
I notice you are in Florida. Do you have an irrigation system that waters the entrance plantings?
FredS7
(Arizona)

Posts:919


12/04/2012 1:26 PM  
Ideas:

- reduce dues below expenses (but not to zero) to eventually reduce the reserve

- buy director's insurance (it sounds like you don't have it yet)

- do a reserve study and aim to have the reserve funded generously but not for a continuing surplus

BruceF1
(Connecticut)

Posts:2535


12/04/2012 1:36 PM  
JimD,

You might want to check your state laws. I'm not familiar with Florida laws, but here in Connecticut associations are required to refund any excess, either by check or by reducing the following year's assessments.

You should have adequate reserves to fund future capital expenses. Other than that, you should have a balanced budget: assessments = expenses.
TimB4
(Virginia)

Posts:16704


12/04/2012 1:49 PM  
Another question:

Has your Association ever had a Reserve Study done?
If not, you may want to use some of that money to pay for one.
JonD1


Posts:0


12/04/2012 2:22 PM  
As the OP provided very little in the way of real numbers, tough for me to comment as to whether reductions are in order.

How many units do they have? Is their an MC? Do you carry insurance or hold a Master policy? Are you familiar with the operating budget? If so where does that stand in terms fo covering annual costs? How old is the property? How do you plan to cover costs IF some unit fail to pay their CC's?

IMO in 2012 $10,000 is not a whole lot of money.
JimD15
(Florida)

Posts:21


12/05/2012 7:20 AM  
All great suggestions and ideas, thanks to everyone for their answers.

Carol, We don't have an irrigation system and there are so many trees the grass and plantings hardly ever need watering. Good idea though especially here.

Tim, Our budgets have been balanced in the past however this past year the new treasurer has made a more detailed expense column. Your second suggestion is a good idea, we will look into it.

Jon D We have 44 single family homes in our HOA. Membership is mandatory and we have no MC. You're correct 10k is nothing in 2012

Fred; The rest of the board with the exception of myself and a member at large don't feel we need insurance. The member at large is resigning after the 1st of the year because of this. I let the treasurer decided if she wanted to be bonded but she declined. There is no question of honesty or intregrity of any BM.

Bruce, We will look into your suggestion, thanks.

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