Approximately 358,000 neighborhoods in the U.S. are part of a homeowners association (HOA). This popularity has much to do with the many benefits HOAs afford. These include neighborhood rules, grounds upkeep, and amenities.
This translates to a higher HOA home value. These services take money to maintain though, which is generated from HOA assessments.
Those, on occasion, will increase. Many factors can cause this.
This article explains the variables that can cause increased HOA dues. Keep reading to find out what they are and how they might apply to your neighborhood.
Standard Assessments
Regular HOA dues are usually calculated on an annual basis but paid monthly or quarterly. These are for routine operations of the community that help retain HOA home value levels.
Examples are utilities, upkeep of communal buildings, and regular grounds maintenance. These also can help pay for insurance and professional services, like accounting or legal.
Regular dues can go toward lawn care or maintenance of HVAC, plumbing, or electric systems. It can also include regular upkeep for amenities, like tennis courts or swimming pools.
Like any other service, over time contractors will raise prices. This can be due to inflation or a change in the type of services being offered. For these reasons, it takes more for HOAs to ensure routine maintenance, which can lead to rising HOA costs.
Unexpected or Special Projects
The other type of homeowners association fees are those levied to cover unforeseen expenses. These include emergencies or disasters that impact the neighborhood. If fencing is vandalized or is damaged in a storm, the HOA must pay for these repairs.
Another use of special assessments is when there are capital improvements to the neighborhood. This could be for major projects, like repaving roads or sidewalks. It also could be for adding amenities to the community.
In most cases, special assessments are paid for over time. For instance, a small amount may be added to monthly dues for a particular period.
Other Factors
Other occurrences can cause HOA fee increases. A high level of delinquency in payments is a major one. Insurance claims can cause premiums to go up as well.
Increases in energy use or utility rates can cause HOAs to raise assessment rates. This is especially true for lighting or amenities, like swimming pools, that consume a lot of power.
Finally, changes in community size can impact rates. While a few vacancies are not likely to cause major shortfalls, a significant reduction in the number of residents could. That is because HOAs still have to pay for basic expenses, regardless of how many people benefit from them.
Learn More About Assessments and HOA Home Value Impacts
Now that you understand the main factors that can affect HOA assessments, you can have a better sense of how your money is being spent. Discussing these issues with your board will give you the peace of mind that funds are being spent to retain and increase HOA home value levels.
PMI Nortex Properties is a locally owned and independently operated community association management company serving the Dallas-Forth Worth metropolitan area. We offer a range of high-quality services, including HOA budget management and board member resources. Reach out to us today to learn more.
