Dues or Assesments - terminology

We are updating our Bylaws, (and will be for awhile). Our CC&Rs refer to our annual "fees" as annual assessments or charges". The NC Planned Community Act states, under Powers of owner's association, that the association may "collect assessments for common expenses. Later it is stated that "reasonable charges for late payment of assessments..."

Our treasurer would prefer to refer to the annual fees as "dues" rather thank Assessments and we have been doing so now for a couple of years when sending the annual notices. His point is that usually the term "assessment" is used for a one time charge or special assessment or as a penalty.

Our treasurer would prefer using this term "dues" in our new Bylaws. I am hesitant to use the terminology of "dues" in our new Bylaws rather than "Assessments" as our governing documents refer to annual maintenance or common charges as "Assessments". When reading on your site it does appear that many people refer to the annual common charges to cover the ongoing maintenance of a community as "dues", and I don't think he is wrong at all, I am again just worried using this term "dues" in our new Bylaws.

Thanks for your feedback! Robin

It's always good to research the state laws, but I think including a "definitions" section in your bylaws and defining these terms by how they are used in the document would work fine.

This is also an area of confusion for our association too. I said assessment and people went nuts. They thought we were going to hit them with a large amount for a repair.

'from the gut'

assessment = mandatory

dues = voluntary (y'all are NOT a social club)

use the proper term = assessment

Robin,
There is an important difference between assessment and dues. Assessments are often called dues but for HOAs the term dues apply only for voluntary HOA members.

Assessments are manditory charges against the property and paid by the homeowners.

Dues are voluntary charges to the homeowners and are paid by the homeowners.

WRONG

In most HOAs it is an annual assessment which may be paid monthly or quarterly if the Covenant so permits.

Think they mean to say that if your in a VOLUNTARY HOA then dues are paid. If your in a MANDATORY HOA then it's Assessments. Dues are usually what club members pay to be part of the club. Assessments are mandatory collections bases on a certain criteria or need. You are assessed because your home proportional contribution to the HOA budget is required. (Budget is split equally among all members). Special assessment are those cases where a special need arises that will take an extra contribution to the HOA budget to cover expense.

To me they are pretty much interchangeable. It's just how your HOA is set up. Voluntary or mandatory. If you want to treat it more like a "club" then dues are due. If you want to treat it like a property, then assessments are due. Just run it through an attorney at the end of the day if you plan on making changes to your documentation and file it.