Accepting An Assessment Increase

At an association annual meeting, a board member stands up and announces that in order to keep the association in good financial health and properly plan for the future, the board has made the decision to raise assessments. Once the disbelieving laughter dies down and the tempers begin to flare, the board starts questioning raising the assessments. Ultimately, no one (board members included) wants to pay higher assessments. The key is to make owners realize that it’s a necessary evil.

It is important to start by explaining the logic for the increase. Explain the financial health of the association and how it affects them. Keep them informed on the association’s finances and investments. Be honest and don’t sugar coat losses when they occur on investments.

Giving members plenty of notice can also help an owner swallow the idea of paying more. When they aren’t told that assessments are going up next month, but rather in six months or nine months, the owner has time to plan and adjust their personal budget.

If you see an increase on the horizon, give notice that it’s possible an assessment increase could be happening in the near future.

Educate the members on what the items in the budget indicate. Few owners are accountants and most do not want to study financial reports and budgets. Showing and educating your membership on the full realities of your association’s expenses and what it means to the owners can go a long way to make accepting a fee increase easier.

The major hurdle many associations face is making owners realize that payment of assessments is a high priority item in their own personal budgets. It should be right up there with taxes and mortgage payments. Many owners do not fully understand that by purchasing a home that is part of the association, that they agreed to pay these fees and that failure to do so WILL have consequences that could affect their property and their credit. Failing to collect assessments from owners leaves the board on the hot seat to the rest of the owners who are entitled to a well run and maintained association.

Explain what would happen and what services would be cut without the increase. Whether it be no mulch for the year, no patching of sidewalks and streets in need of repair, or closing of the pool early every day (or the closing of the pool all together), explaining in specific terms how their lives will change can have a profound effect on acceptance of assessment increases.

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