HOA Fees Increasing? Here’s What You Can Do

A row of houses sit in a suburban neighborhood.
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If you live in a home governed by a homeowners association, you aren’t alone. In fact, 73.9 million U.S. residents belonged to a homeowners association in 2020, which is more than one-fourth of the U.S. population.

With HOA membership comes monthly dues, and those dues can cost thousands of dollars a year. What happens when those fees keep increasing? Is there anything a homeowner can do? Let’s take a look.

What Are HOA Fees?

If you live on 15 acres of property with no nearby homes, you probably don’t have a homeowners association. But today’s houses are typically built in planned neighborhoods, with homes relatively close together.

All that closeness comes at a price. Your next-door neighbor’s behavior impacts your home’s resale value. If neighbors park cars and boats in the front yard or paint their shutters purple and orange, it impacts your home’s curb appeal as well as theirs.

That’s where a homeowners association can help. HOAs set rules that members must follow. Break the rules and you’ll likely get a friendly reminder letter or two, followed by fines. But HOAs also help maintain common areas and even, in some cases, provide landscaping services.

Each homeowner in an HOA agrees to a monthly fee, which can sometimes be paid in a lump sum. Those fees can vary, depending on the number of homes and the services provided, but on average, they run $200-$300 a month. This is in addition to the homeowners insurance and property taxes you pay on your home.

Why Are HOA Management Fees Increased?

Since HOAs typically cover dozens, if not hundreds, of homeowners, a board of volunteer homeowners will often handle things. That board will be responsible for documenting all funds collected and how that money is spent.

But unfortunately, an HOA’s expenses will increase over time. No matter how long it’s been since the last increase, it’s natural to wonder why you’re being asked to pay more. Here are some reasons an HOA board may vote to charge members more.

1. Depleted Reserves

Money doesn’t grow on trees.

As your HOA board crunches the numbers, it may become abundantly clear that money’s running out. That can lead to fee increases.

Most HOAs strive to keep a reserve fund, which is designed for emergencies. As funds get low, the board may see increases as the only option. Even a $10 monthly fee, spread out over many households, can make a big difference.

2. Rising Costs

Prices have been on the rise since 2021, and HOAs aren’t immune. Your board may be dealing with increasing expenses, and those increases have to be passed on to you to keep reserves in check.

Think about the services your HOA provides. The landscaping crew may have upped its rates, and if you have a community pool, the cost of labor and equipment has likely gone up as well. To maintain services at their current level, the board may have no choice but to up fees.

3. Homeowner Complaints

If you’ve ever attended an HOA board meeting, you probably know the board gets an earful from homeowners. Comments like, “The entry gate is malfunctioning” and “The street lights are dirty” can be relentless.

HOA boards have a choice. They can spend money to address those concerns or let them go.

Some boards choose to cut corners to avoid rate hikes. That can keep your dues low, but you may not be happy with the results. That’s when the complaints ramp up. If things have fallen into disrepair, the cost to fix everything can be higher than if the HOA had maintained them.

Handling HOA Fee Hikes

One of the benefits of homeownership is that you don’t have a landlord raising your rent every year. HOA management fee hikes can feel similarly frustrating, though.

If your HOA has announced a rate hike, there might be a few things you can do.

1. Check Your Contract

When you closed on your house, you should have signed documentation stating you’ve read and agreed to your new HOA’s covenants, conditions and restrictions (CC&Rs). Track down all the paperwork and review exactly what you agreed to when you signed that contract.

Chances are, your HOA’s CC&Rs will include language about increases. There may be a maximum percentage, though, and you can check to make sure your HOA board is staying within those limits. If you do find the HOA board isn’t following the CC&Rs, request that they take a look at the paperwork.

2. Note Local Laws

If your HOA’s CC&Rs cover the rate hike, you still have another avenue. Check local laws and regulations regarding HOA fee increases. Laws may have changed since your HOA initially set up their rules.

States can vary widely on how they keep HOAs in check. Some states will cap the percentage, while others are more concerned with how increases are handled. You may find that your area requires homeowner consent before HOA boards can change rates. In some cases, consulting an attorney who specializes in HOA disputes may be worthwhile.

3. Talk It Over

HOA meetings can be chaotic. It might be a better option to reach out to the president outside of the meeting and discuss your concerns. If that fails, the next meeting is likely your best option. It might help to get together with other homeowners and discuss the best approach.

“Engaging in open communication with the HOA board to express concerns and seek potential solutions is crucial,” said Deba Douglas, CEO at Douglas Dwellings.

4. Consider Moving

This option might be drastic, but if you’ve already considered selling your home, increasing HOA fees could be just the push you need. This is especially true if you are dissatisfied with your HOA board’s handling of the funds.

Even if you aren’t excited about moving, consider whether increasing HOA fees will impact resale value. If you see things only getting worse, this might be a better time to sell than a year or two from now, when those rates are even higher.

Preparing for Future Increases

While you can’t do anything about today’s increases, a little planning can help ensure it doesn’t take you by surprise again. Here are some tips:

1. Budget for Increases

Surprise expenses can upend your entire budget. That’s why it can help to plan for them. When you’re estimating your monthly expenses, add a little wiggle room for rate increases, unexpected car repairs or emergency medical costs. You can also automatically add an HOA fee increase to next year’s budget when you start planning it.

“My best advice is to plan for small increases in your HOA expenses every year,” Krista Forsberg, real estate agent at Keller Williams Realty Integrity Edina, said.

2. Get Involved

If you only pay attention to your HOA when you have a complaint, you’re less likely to be taken seriously than if you’re always involved. Volunteering for a board meeting can give you a say in things, but if that’s not up your alley, there are other ways to participate.

“As a homeowner with an association, participating in meetings, reading notices and monthly board meeting notes and staying engaged in your community social/online groups will help you to stay up-to-date on potential upcoming maintenance and repairs,” Forsberg said. “And you’ll have a voice in how and when the association tackles that work.”

3. Know Before You Buy

The best time to protect against future increases is to research before you buy. Pay close attention to HOA fees when you’re house shopping, and ask to see the CC&Rs before you put in an offer. There are some telltale signs to look for before you look at those CC&Rs, though.

“When purchasing real property with an HOA, pay attention to the condition of the budget the HOA runs on and the outward look of the neighborhood,” Martha Gaffney, strategic real estate advisor at Real Estate Bees, said. “This will usually let you know more or less if your fees are likely to increase and how much.  If the budget is running on a deficit and the neighborhood looks run down with a big amount of foreclosures, most likely you can expect fees to increase.”

Increasing HOA fees may put stress on your household budget, but there are ways to make it work. List out your monthly expenses and find a way to reduce a little in one area to make up the difference. If the increases are too frequent or you aren’t satisfied with the results, a move might be in order.

Stephanie Faris is a professional finance writer with more than a decade of experience. Her work has been featured on a variety of top finance sites, including Money Under 30, GoBankingRates, Retirable, Sapling and Sifter.