My HOA is increasing the annual dues by a small amount. They are also changing the due date. Made it almost half a year sooner. Is this allowed? I think they should first refund the previously paid due since they are not covering the entire year. I am guessing they can change the dates but wouldn’t they need to prorate what has been paid and adjust the amount? If it is rent, there’s no way the landlord can just ask to pay 2 weeks sooner and not credit what’s already been paid. Bylaws are confusing. I’d think whatever bylaws may say it has to be reasonable to be lawful.
So you pay in lump vs monthly ?
They can do what they want but what you are saying makes no sense as it sounds like they want payment when you still have many months paid but not used yet.
The by laws dictate what is allowed. If the membership voted for an increase for the current year, and if it was done in accordance with the by laws, then it’s allowed. However, if it was not done in accordance with the bylaws, there is a case to be made that it’s not okay. Unfortunately, making that case may require hiring a lawyer, so it may not be worth doing.
1 Like
Our board, not members, set the rate change.
I’m confused though. All my HOAs have paid monthly but some pre pay.
It sounds like there are month’s of unspent payments made. Obviously credit for upcoming months has to be given.
I’m assuming the rate increase starts in January. So maybe the only pre paid is November abd December at this point ?
I would check into monthly payments.
We pay lump sum yearly. It used to be summer to summer. New rule is pay the annual dues lump sum January through December. Since I paid through the coming summer this past year, I think a credit should be issued for the past payment not used up.
That sounds right to me.
Has the association sent an invoice or statement showing what’s due? Have you brought it up to the board?
What was the reason for changing date of payment? Perhaps your community has a budget deficit that they need to make up. This could occur if there is a significant one time expense that is not part of regular annual budget. Rather than having a special one time assessment, they might move the annual fee date earlier.
If there is no particular reason for the change, the extra funds for the year will not just go in someone’s pocket. The budget surplus will be used in the future, such that it will be longer until the next increase and/or annual increase will be smaller. Unlike rent, the HOA should be used to maintain and improve things shared by your community. You can probably get ahold of financial reports which should show exactly how HOA fees are being spent. My HOA has financial statements on their website. I see that they currently have ~$2 million in cash reserves, which are being stored as a t-bill ladder. When that balance gets lower than desired, they increase the annual fee.
Regarding legality, different states have different rules. For example, my state has a rule that HOA fees cannot increase by more than 20% over previous year, without being approved by majority vote among members. I am not aware of a rule that limits the timing of the annual fees within calendar year.
1 Like