HOA Dues

Bea,

I live in a 1,700 member planend community of single family homes in Glendale, AZ (Phx area). Our assessments are $460/yr. We have extensive common areas consisting of greenbelt areas, a number of parks with playground equipment, fountains and several man-made lakes which are quite expensive to maintain. However, we have none of the other amenities which you have that cost a lot to maintain, i.e., pool, tennis & basketball courts. We also contract with a management co. Frankly, IMO, there are far too many factors to consider making it impossible to ascertain how much an assn should be charging for assessments. Perhaps our utility rates are much higher than yours. Service provider fees most likely vary from one area of the country to the other. Your budget would be the best indicator of whether or not your fees are too high. If you consistently have a large excess from one year to the next that would be an indicator. Also, take a look at your expenses and determine if any cuts can be made. Check out management co fees; perhaps yours is charging way too much. Also be mindful that most members will always complain that the assessments are too high, but oftentimes they are just out of touch with how much it really takes to run an assn.

Bea - surely there are comparatives in your area that you could use. Perhaps a real estate agent could help you find similar subdivisons with similar amenities and you could do a comparison in dues rates.

It only makes sense to compare apple with apples.

I'm with KirkW on this. The best way to diffuse homeowner irritation over Assessments is to let them know where the money is going. Be very clear as to how much money it takes to maintain the extensive common property, plus how much money you are required to put into your reserve account. This information should be easily accessible to you owners. I find that transparency is always the best policy when you want to maintain the confidence of your Association.

By the way, I live in California and $400 is considered a median fee here.

Two items:

1) Owners always think they are paying too much - they view assessments as an additional tax and everybody thinks they pay too much in taxes.

2) You'll never get a good comparison, it will always be apples and oranges. Even if you find a similarly constructed association with similar amenities, the assessments will reflect the quality level of services, based on the expectations of it members. You should never accept comparisons from owners ("How come we're paying more than XYZ Association just down the road"), nor should you use it as justification for your budget.

The best answers:

Always use $0 based budgeting - justifying every expense every year. Don't just base expenses on the prior year and cost of living increase.

Talk to, or survey the owners on the services provided and the quality they expect. Use this to help develop the budget and as back up when the budget is presented, i.e. "you indicated you wanted better lawn service and the budget reflects the following improvements from prior years"

And, as many have pointed out, take the time to explain the budget to the owners. Don't just present a spread sheet with line items. Use narrative descriptions of how the numbers were arrived at.

Joe

Brian,

Well, it's no wonder -- you're in CA where a 2 BR shack sells for $300,000!!! LOL

Oh, well, I'm still not surprised! My former assn with only 49 homes has an annual assessment of $480/yr and it's going to be raised to $540/yr! They have one large retention area (the park) that's all grass & a small kiddie playground. All the landscaped areas amount to approx 2 acres. Water is the big ticket item. There is no prop mgr but they do contract with a bookkeeping service. Knowing who these board members are I know that mismanagement comes into play big time and all the members are having to suffer for it. When board members take no interest in doing their jobs right; don't look at the financial statements (many can't even decipher them!); don't look at the bills being paid (why are the water bills excalating?), etc., etc., this is what happens.

CarsonH1 are you a board member? can we talk? I need some encouragement! As President of our HOA I am needing to raise our dues,change our CC$R to protect the rest of us from owners who rent but do not pay their dues and the usual dogs,noise,kids,and trash.