If youlive in a homegoverned by a homeowners association, you arent alone.
In fact,73.9million U.S. residents belonged to a homeowners association in 2020.
With HOA membership comes monthly dues, and those dues can cost thousands of dollars a year.
What happens when those fees keep increasing?
Is there anything a homeowner can do?
Lets take a look.
Need Quick Money to Pay for HOA Fees?
Wed bet no one gets excited when they hear the word fee.
Just another thing we have to pay for.
If youre enjoying the benefits of an HOA but youre not exactly enjoying the fees, we can help.
What Are HOA Fees?
HOA fees are monthly fees issued by organized communities so that maintain the neighborhood.
But todays houses are typically built in planned neighborhoods, with homes relatively close together.
All that closeness comes at a price.
Your next-door neighbors behavior impacts your homes resale value.
Thats where a homeowners association can help.
HOAsset rulesthat members must follow.
Break the rules and youll likely get a friendly reminder letter or two, followed by fines.
But HOAs also help maintain common areas and even, in some cases, provide landscaping services.
This is in addition to the homeowners insurance and property taxes you pay on your home.
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Why Are HOA Management Fees Increased?
That board will be responsible for documenting funds collected and how that money is spent.
Unfortunately, expenses will increase over time and so will HOA fees.
Here are some reasons an HOA board may vote to charge members more.
Depleted Reserves
Money doesnt grow on trees.
As your HOA board crunches the numbers, it may become abundantly clear that moneys running out.
That can lead to an increase in HOA fees.
Most HOAs strive to keep a reserve fund for emergencies.
As funds get low, the board may see fee increases as the only option.
Even a $10 monthly fee, spread out over many households, can make a big difference.
Rising Costs
Its no secretthings have gotten more expensive, and HOAs arent immune.
Think about the services your HOA provides.
To maintain services at their current level, the board may have no choice but to up HOA fees.
Comments like, The entry gate is malfunctioning and The street lights are dirty can be relentless.
HOA boards have a choice.
They can spend money to address those concerns or let them go.
Some boards choose to cut corners to avoid rate hikes.
That can keep your HOA fees low, but you may not be happy with the results.
Thats when the complaints ramp up.
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If it’s crucial that you wrangle your budget, it may be time to consider a savings challenge.
HOA management fee hikes can feel similarly frustrating, though.
If your HOA has announced a rate hike, there might be a few things you could do.
Track down all the paperwork and review exactly what you agreed to when you signed that contract.
Chances are, your HOAs CC&Rs will include language about increases.
Check local laws and regulations regarding HOA fee increases.
Laws may have changed since your HOA initially set up their rules.
Statescan vary widelyon how they keep HOAs in check.
Some states will cap the percentage, while others are more concerned with how increases are handled.
You may find that your area requires homeowner consent before HOA boards can change rates.
In some cases, consulting an attorney who specializes in HOA disputes may be worthwhile.
Talk It Over
HOA meetings can be chaotic.
If that fails, the next meeting is likely your best option.
It might help to get together with other homeowners and discuss the best approach.
This is especially true if you are dissatisfied with your HOA boards handling of the funds.
Even if you arent excited about moving, consider whether increasing HOA fees will impact resale value.
Here are some tips:
1.
Budget for Increases
Surprise expenses canupend your entire budget.
Thats why it can help to plan for them.
you might also automatically add increased HOA fees to next years budget when you start planning it.
And youll have a voice in how and when the association tackles that work.
There are some telltale signs to look for before you look at those CC&Rs, though.
This will usually let you know more or less if your fees are likely to increase and how much.
Increasing HOA fees may put stress on your household budget, but there are ways to make it work.
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Stephanie Faris is a professional finance writer with more than a decade of experience.