I’m part of the board of our HOA and one homeowner is pushing for us to basically stockpile funds in case of a recession or depression in the future. The way it would work is we would collect more money when times are good and reduce dues when times are hard but then we would have the stockpile to get us through.
I don’t think it’s a good idea but this homeowner is really pushy and convincing that some other board members are actively considering it. Is it just me? Are they just gullible? Is this even an option for HOAs???
This sounds good on paper. However, it’s not actually viable and is arguably even illegal.
Homeowners associations should only collect enough dues to cover the budgeted expenses and reserve contributions. Some even have an explicit rule that compels the board to return surplus funds to the homeowners. Collecting more dues than you need to meet the budget and reserves is essentially a breach of fiduciary duty. In some ways, you can even view it as stealing.
I agree with curtis99. It’s a bad idea. Plus, not all homeowners will still be there in the future when the stockpiled cash would come into play. Homeowners now are basically paying more money to make the lives of homeowners in the future easier in case of a recession. And that’s not fair at all to homeowners now who have to pay more.
Check your state laws. If your state laws says you must refund extra money or carry them over to the next year (and reduce next year’s dues), then you should be able to shut that homeowner up pretty easily.