Maximum HOA Annual Assessment Increase

[nkuen7380]

What is the name of your state (only U.S. law)? Arizona

Is there a maximum amount or % that an HOA board can increase annual dues?

My HOA, before the first elected board has been brought in, has raised the monthly dues from $255 to $355. The community has only been in existence since February of 2008 so the appointed board is currently the only board we have.

[Some Random Guy]

From a fed/state law standpoint, they can raise it to the moon.

The HOA dues can be raised according to the limits and rules listed in your HOA regulations. You should have gotten a copy of this before you bought the property.

If the developer still has the majority of properties owned in the HOA, then they have a lot of ability to make changes. See if the regulations have any limits on rates, when they can be raised and meeting requirements. Also see what the newly elected board can do once they come into office to reduce the rates.

Of course, the HOA fees go to the HOA. What are they being used for?

[HomeGuru]

Originally Posted by nkuen7380

What is the name of your state (only U.S. law)? Arizona

Is there a maximum amount or % that an HOA board can increase annual dues?

My HOA, before the first elected board has been brought in, has raised the monthly dues from $255 to $355. The community has only been in existence since February of 2008 so the appointed board is currently the only board we have.

**A: what does it state in your HOA docs?

[zimtekcom]

(not legal advise but...)
As a new owner and now the association president in a 20 year old completely mismanaged association, perhaps your HOA has actually done a reserve study or cost analysis and discovered that the higher dues are actually what the building will cost to properly operated.

My recommendation is to get involved in the board activities and find out exactly what the money is going for and how they came to the conclusion that they needed the higher amount. Most property developers set the initial dues at a totally unrealistic amount to sell their properties... This initial calculated amount often covers only the expected utilities and insurance for that first year and puts NOTHING in reserve or other funds. It's your property, take ownership. Don't get frustrated with the board, get involved...

[HomeGuru]

Originally Posted by zimtekcom

(not legal advise but...)
As a new owner and now the association president in a 20 year old completely mismanaged association, perhaps your HOA has actually done a reserve study or cost analysis and discovered that the higher dues are actually what the building will cost to properly operated.

My recommendation is to get involved in the board activities and find out exactly what the money is going for and how they came to the conclusion that they needed the higher amount. Most property developers set the initial dues at a totally unrealistic amount to sell their properties... This initial calculated amount often covers only the expected utilities and insurance for that first year and puts NOTHING in reserve or other funds. It's your property, take ownership. Don't get frustrated with the board, get involved...

**A: to add**************.the HOA should have 2 budgets; operating and reserve. It appears that one or both of these categories are short $$$$. Or there is litigation or settlement of one to require additional monies from each HOA owner.

[fwoodward]

The HOA fee for the previous year was $145/mo and increased to $185 for this year (increase of 28%). I checked my CC&Rs and it limits the assessment to 120% of the previous year. This limit can be exceeded by a vote of 2/3 members during a meeting called to specifically vote on the increased limit. I never received notice of any such meeting and I never voted on the increase. I brought this to the attention of the HOA Comm. Mgr and have recieved no response. Perhaps I'm just not understanding the wording in my CC&R's correctly, but it appears they've exceeded the allowable monthly increase. How do I get the assessments lowered, or can I?

[HomeGuru]

Originally Posted by fwoodward

The HOA fee for the previous year was $145/mo and increased to $185 for this year (increase of 28%). I checked my CC&Rs and it limits the assessment to 120% of the previous year. This limit can be exceeded by a vote of 2/3 members during a meeting called to specifically vote on the increased limit. I never received notice of any such meeting and I never voted on the increase. I brought this to the attention of the HOA Comm. Mgr and have recieved no response. Perhaps I'm just not understanding the wording in my CC&R's correctly, but it appears they've exceeded the allowable monthly increase. How do I get the assessments lowered, or can I?

**A: check with your Board president.

[fwoodward]

Our scheduled HOA meeting is in 2 days and I'll bring it up then. Thank you!

[HomeGuru]

Originally Posted by fwoodward

Our scheduled HOA meeting is in 2 days and I'll bring it up then. Thank you!

**A: have them show you the condo doc reference which allows the increase in HOA fees.

[fwoodward]

Thank you for your response.

They'll have to conjur one up

But this brings up a good point. When I do ask them about the 120% increase maximum, let's pretend I'm right and they didn't follow the procedures in the CC&Rs, what then?

Thanks!

[HomeGuru]

Originally Posted by fwoodward

Thank you for your response.

They'll have to conjur one up

But this brings up a good point. When I do ask them about the 120% increase maximum, let's pretend I'm right and they didn't follow the procedures in the CC&Rs, what then?

Thanks!

**A: the choice would be yours.

[fwoodward]

Well, good news. They realized their error and are correcting our monthly fees down to $174 instead of $185. Thanks for all the input!

[HomeGuru]

Originally Posted by fwoodward

Well, good news. They realized their error and are correcting our monthly fees down to $174 instead of $185. Thanks for all the input!

**A: that's hardly a diiference. Heck the $11 could have gone into a reserve fund.

[fwoodward]

Our CC&Rs don't allow for an increase more than 20% and we have an Arizona statute which won't allow an increase more than that without 2/3 vote of the membership. So they have no choice but to lower the monthly fee down to $174/mo. Besides, our HOA fund is approximately ($110k) so they need a whole lot more than that $11 difference LOL.

[HomeGuru]

Originally Posted by fwoodward

Our CC&Rs don't allow for an increase more than 20% and we have an Arizona statute which won't allow an increase more than that without 2/3 vote of the membership. So they have no choice but to lower the monthly fee down to $174/mo. Besides, our HOA fund is approximately ($110k) so they need a whole lot more than that $11 difference LOL.

**A: how are you related to the OP?