Inevitable Dues Increase

What would you suggest the procedure to do an inevitable dues increase be done/handled?

For our association, I created a two line chart where one line showed the dues for the past 10 years and the second line showed the normalized housing value per the county assessors number, and showed how the dues basically mimicked property values. Thus, the dues increase was right in line with the property value increase.

People still complained, but hopefully a couple people understood the chart.

Yes be transparent, not only explain why, show them why.

We're mulling over the same thing. Two key points was cannot escape are landscaping fee are increasing, and security. We really need to install cameras at our two entrances and electronic locks at the pool.

I was on a Board during the housing crisis that started in 2007. Our dues never decreased. Starting in 2009, not one property's dues decreased during my 4 years there.

JohnC,
I personally would keep the increase under what your CC&Rs allow without going out for a Vote. I think most documents allow for a under 9% increase at the boards discretion. I would obviously do as others have recommended and be as transparent as humanly possible. By taking the larger increase you will have the short timers who will fight it because they do not plan on being around for 10 years. If you need to get a Super majority it is always tuff becuase you are reaching into everyone's pocketbook and no one likes that.

I like Jack's idea about the chart - if you like, you can stick to the last five years of expenses, perhaps selecting the items that have gone up the most and explain why.

Don't forget to include reserves in your argument - people need to understand that if reserves aren't funded properly, they may risk paying an expensive special assessment down the road on top of regular assessments, which have to cover routine expenses. They may think they won't be around by the time the piper comes calling, but life has a funny way of doing what it does and doesn't really care to wait just because you'll have the time and money to address whatever at X point in time. And you may find you're still here in 10 or 15 years and if you haven't saved your money, then what?

As for the property value stuff, this may be a good way to explain that the amount of assessments isn't necessarily equal to property value. The word alone indicates it's subjective - what makes a house more or less valuable to you may not be the same for me. For HOAs, I think it's best to focus on managing the money properly and enforcing the rules consistently and fairly to help make the community a nice place to live (at least it'll look good). Prospective buyers will make their decisions based on a bunch of factors and the HOA can't always control them.

Our docs only allow for some government COL increase which would be less than 3%. We do not need our owners approving a dues increase.. The BOD alone can do it. As mentioned earlier, our owners could reject it but it would take a Special Meeting with 51% OF ALL OWNERS DISAPPROVING IT..

Say, Jack. Ignore Max's nastiness. This week alone, he's been rude to JohnC, elsewhere, and to me too. He's one unhappy soul.

You mentioned doing it all at once, as painful as that is I can’t recommend comend that enough. We did our first ever reserve study shortly after I joined the board and it became readily apparent we were woefully underfunded (previous boards thought 10k per year to reserves for a 200+ unit condo was plenty). We took the approach of a phased in increase to avoid the shock of trying to get where we needed to be. Lots of painful arguments at many meetings after that. 60% of the total ownership has to veto a budget so increases passed but there wasn’t a lot of love. Arguably we are now in the best shape of any condo association in town but still underfunded but should avoid any majorly nasty assessments.

Shut

up.