The average HOA fee tends to fall between $200 and $300 a month. Many homeowners need to factor this fee into their monthly budget or include it in their mortgage financing.
Unlike HOA fees, HOA assessments aren't a monthly charge. Instead, they're used to cover unexpected costs or account for budget deficits. As a result, your HOA members aren't always prepared for HOA assessments and may express frustration or doubt about that extra cost.
This contention can increase when HOA assessments go up over the years. Why does this happen and how can you explain it to your members?
Read on to learn about the cause behind increasing fees and how to handle them in your community.
Why HOA Assessments Tend to Increase
Your HOA board members have assessed your financial reserves and concluded that they're not high enough to cover projected costs. Maybe there's an unexpected need to restore parts of the community pool or park areas. Perhaps your community bears some of the financial responsibility for removing fallen trees or repairing infrastructure after a storm.
These situations account for why HOA assessments arise, but what about the increase? Chances are, your next HOA assessment will be higher than the last.
The reality is that increasing HOA assessments reflects increasing costs. For example, home repair costs increased 9.3% in 2021 due to inflation combined with worker and supply chain shortages. Both raw materials and labor cost more than they used to, which means that HOAs need more money to complete HOA projects.
How to Communicate HOA Assessment Increases
It's unsurprising that HOA assessments can cause frustrations, especially when they continue to increase year over year. There are a few ways that you can improve community relations in the face of rising costs.
The first is to improve your HOA bookkeeping. Community association managers can take over your accounting needs to ensure accurate records and timely increases in HOA fees. This can reduce the need for HOA assessments by increasing reserves that will cover more of those unexpected expenses.
The second is to hold HOA meetings before sending out written notice of an impending HOA assessment. Talk to your community members about the need for the assessment and explain to them exactly what their money will cover. By including your community in the conversation, you can reassure them that their money is being used in a way that is beneficial to them and meets their priorities.
Call PMI for Better Naples Community Management
If you find that your community reacts negatively to HOA assessments, it's important to understand where they're coming from. It's time to include them in these decisions so you can explain why HOA assessments tend to increase and where that money is going. The more aware your community members are, the more willing they'll be to participate.
Do you need assistance to bring your Naples HOA to its full potential? PMI Gulf Coast offers customizable or full-service community association management. Contact us to set up a consultation and learn more about what we do.