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owner insist we need to go to the original fees

Started by BonnieG1 • 8 replies • 1536 views

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BonnieG1 (Nebraska)
Posts: 1,186
Posted:
Our CCO (Chief Complaining Office) insist that we have increased her fee by $3.00 too much. She told one of the Board members that we needed to start at the original fee. I don't know exactly what she means because each time the fee was increased it was increased by percentages.
Thus $100.00 original fee then 5% increase is $105.00. Then the next increase may be 5% of $105.00 for a fee of $110.25.
Has anyone else had the need to go back to the original fees mentioned.???
GlenL (Ohio)
Posts: 5,491
Posted:
That would mean you could never increase your fee past $105.00 if you went back to the base fee every time. The way you have described what the BOD sounds proper depending on how your CC&R's are worded. Could you post the relevant section on fee increases?
Studies show that 5 out of 4 people have problems with fractions
BruceF1 (Connecticut)
Posts: 2,535
Posted:
Quote:
Posted By BonnieG1 on 06/07/2012 9:10 PM
Our CCO (Chief Complaining Office) insist that we have increased her fee by $3.00 too much. She told one of the Board members that we needed to start at the original fee. I don't know exactly what she means because each time the fee was increased it was increased by percentages.
Thus $100.00 original fee then 5% increase is $105.00. Then the next increase may be 5% of $105.00 for a fee of $110.25.
Has anyone else had the need to go back to the original fees mentioned.???

Fees should be cost driven. You take the total cost to pay all the expenses for the HOA for the coming year, including an amount for a reserve contribution and divide that number by the number of homes. That becomes the annual fee for each member for the year. Divide that number by 12 and you get the amount each homeowner should pay per month. Simple.

Whatever percentage increase that turns out to be over the past year is what it is, be it 3%, 3.27%, 4%, - whatever.
BonnieG1 (Nebraska)
Posts: 1,186
Posted:
Glen, when I have time, I will try to post the revelavant part of our documents.
BonnieG1 (Nebraska)
Posts: 1,186
Posted:
Bruce,
I wish it were as simply as you said, but not according to our documents. We should first figure the budget and then figure the percent of increase we need and that is the percent we have to increase the fees.

State law designates that each unit be assigned a percentage of value and we cannot take that percentage away. If we just divided the amount of increase by the number of units and increase everyones' feess the same dollar amount we would be ignoring the percentage.
EllieD (Vermont)
Posts: 446
Posted:
Quite often for Condominiums, each Condo Unit does not pay the same amount proportionately. Different Units are assigned different percentages based on a formula. For example, some Units may pay 3.125%, others 3.404% and other Units 2.750% of the total budgeted amount.

Whatever the percentages, when they are added up, the TOTAL has to equal 100%. And of course, when all the yearly (or monthly) fees are added up for all the Condo Units the SUM has to equal whatever the “Total Budget amount” is.

I believe what Bonnie is talking about is a maximum % amount the Budget can be increased each year without requiring a Member Vote.

Also I believe typically that, that maximum % increase is based on the PREVIOUS year’s Budget - Which is what Bonnie’s CCO seems to be questioning.

Since the Annual Fee is determined by the Budget, the yearly (monthly) fees have to increase by whatever amount, %, they have to.

If the Budget increase for the next year is over the amount (percentage wise) that does not require a member vote, then it is, and a member vote is required to approve the Budget.
BonnieG1 (Nebraska)
Posts: 1,186
Posted:
Elle,
Our documents never require a member vote to increae the budget, nor is there a problem with the increase from last year. This is the first increase we have had in five years.

Our documents give the Board the entire authority to increase the budget. When I have more time I hope to post the revelant articles from our documents, but this week is extremely busy for me.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Bonnie

Ask your CCO if they would like it if their bank did not compound interest but only paid them interest on their base deposit.

Some Bylaws say a BOD can increase HOA dues no more then X% per year then I say it it compounds. Let us say the Bylaws limit dues increases to no more then 10% per year, then compounding says:

Year 1.....$100.00 per unit, per month.
Year 2.....$110.00 per unit, per month.
Year 3.....$121.00 per unit, per month.
Year 4.....$133.10 per unit, per month.
Year 5.....$146.41 per unit, per month.

I say the above is within the Bylaw of no more then 10% per year.
BruceF1 (Connecticut)
Posts: 2,535
Posted:
Quote:
Posted By JohnC46 on 06/08/2012 11:15 AM
Ask your CCO if they would like it if their bank did not compound interest but only paid them interest on their base deposit.

Or if the interest paid for their mortgage was always based on the original loan amount.

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