HOA Dues

Can the board waive the 2020 yearly dues or is it illegal for them to return yearly dues even for one time? The reason why I ask is because my friend told me that their HOA decided that they have too much reserve in the bank. The prior board decided to increase their dues in the last 5 consecutive years just because the president then foresaw lawsuits coming her way. It was primarily to pay for attorney and court fees. They decided to hire a property management to manage finances as their way of cutting on this extra reserves. What are the circumstances they can or cannot do this about yearly dues?

Usually, an HOA that has a reserve fund for capital components, also had an operations budget.

While it is easy to imagine not needing reserve component funds for a year, due perhaps to recomputation of wear, damage, etc, it is harder to understand how the operations component would not be needed. In other words, reducing the reserve component of the assessment (even eliminating it for a year), while continuing to assess for that year based on operations costs.

Make sense?

Thank you for the input. But their community is not even CID as the board claims. There is no common interests to maintain. Each of the owners (they all own their respective lands) are responsible for their property for maintenance. They don't even have a clubhouse. There are no wear and tear or damage, etc to take care except for 3 light fixtures on each of the 3 entrances. So she feels since the dues were increased unnecessarily for the last 5 consecutive years just for court and lawyer expenses. They also know there is an insurance that takes care of these type of fees.

For example, if a reserve study you need $20K to fully fund your reserves and the Board, over the course of 5 years built up an additional $80K war chest for litigation and that is not going to be used, it is only right to refund the monies back to the owners still living at the complex.

In California, monies from a reserve account can be borrowed on a short term basis ( 1 year) to cover a short fall in operational expense (legal being one of those expenses).

This might help.

https://www.davis-stirling.com/HOME/Excessive-Reserves

Figuring out exactly how to refund is not that difficult.

Thank you for everyone's inputs. Merry Christmas and Happy New Year to all.......

Good Morning I Do have a quick question You all might be able to point me to the right direction. I live in Virginia small country town. I move in my house 6 years ago and I was never told about the HOA or there fees. I just Receive a bill with the last 6 year fee and plus 26% interest,my 1st bill I have received about this. I have pulled my deed of my property its not on my deed or at my closing. I have never received disclosure package as of yet. Now they are telling me they are going to get Warrant in debt on me on my un-paid dues. I don't believe I am responsible for this bill since I was never was told or receive a package plus it was in my closing. Am I on the right track ? Doug

Doug,

George meant to say PLEASE.

Thanks Mark, but I did not mean to say please.