How Much Can an HOA Increase Dues at One Time?

HOA Fee Increases

HOA dues are an essential part of association management. They help cover a community’s annual budget and pay for important projects, property upkeep, legal fees, and so much more!

One of the biggest downsides is that sometimes costs are unpredictable, and HOA dues can increase for the members who pay them. If your association believes it may face increased dues in the coming months, here’s a look at how much dues can increase in Texas and some of the stipulations behind an increase.

Is There a Limit to Dues Increases?

Essentially, an increase in dues is based on the association’s ability to meet its annual budget. If your Association is unable to adequately save funds or pay for maintenance expenses, it is probably in need of a dues increase. So, by this generalization, there isn’t a set limit to how much annual dues can increase at one time.

However, the association itself will usually have a limit placed on dues to keep them under control. If limitations are in place, they will be found in the association’s CC&Rs, which are accessible by any member of the community. Many Association documents typically outline that an increase of 10% can be made at the discretion of the Board, but anything more than that in one fiscal year must be voted upon by the members.

Keep in mind, though, limited increases aren’t always a good thing for your community. If they are suppressed enough, your association could run into trouble down the line if a fund shortage limits the completion of an essential community project.

What Are the Reasons Behind a Substantial Increase?

As we mentioned before, the budget is the key to annual increases in an association. Prices for goods and vendor services rise, and HOA management doesn’t have a choice in the matter other than to adapt.

Some of the key reasons a budget would increase include:

  • Repair and replacement needs for common areas
  • Community damage after a natural disaster
  • Rise in cost of operation expenses
  • Rise in cost of maintenance vendors

Once these increases are determined, the HOA then reviews the funds it has in its reserves and decides if its current amount can handle the increased budget. If the association has insufficient funds even beyond their reserves, homeowners could face a hike in annual dues.

Unfortunately, for all members of an association, a community can face increased payments every year. This is due to inflation and unpredictable costs that are added on to essential services for the community.

Are Annual Increases Always a Surprise for Homeowners?

According to Texas law, an increase cannot be made in secret amongst a board. Actually, a board can’t even consider a vote for increases unless done at an open meeting of which all members have been provided notice.

Understand Your Annual Increases With the Help of Excel Association Management

If your association is having trouble with its finances due to unexpected cost increases, Excel Association Management can help. Our team has experience in providing leadership, legal and financial advice to communities like yours, all with a successful outcome. Don’t let the looming shadow of financial stress keep your community from thriving. Contact us today to learn more about our services.

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