Lower HOA fees would be the dream for both residents and the HOA board. HOA fees too high for comfort can make a community difficult to manage. Thus, managers often look for ways on how to lower HOA fees and other homeowners association payments. Let’s look at a few ways on how to reduce HOA fees while still keeping the association financially sound.
Lower HOA Fees With a Few Simple Q&As
Fees will always be a part of a homeowners association. These fees go towards keeping the HOA supported. Also, it’s often likely that fees will increase over time, as costs go up every year. However, there are steps you can take to make sure they don’t get out of control.
So if your board has started getting complaints about your fees increasing too much, it’s time to ask some questions. If your HOA feels that the HOA fee complaints are justified, here are some ways to go about reducing them:
How Much Are You Paying Contractors?
Contractors and service providers are the biggest expense items in the budget of a typical HOA. So, if you can save money on them while still getting the same quality of service, it’s always worth a try. Keep in mind that a vendor will usually try to retain your business when it can. Especially so if there is competition in your area. You can use that to your advantage and try to renegotiate terms more favorable to your association.
Sometimes you’ll have old contracts going on. Many of them were set up years before, perhaps even before your current HOA board. The contractors might have increased their rates each year as well.
Check these old contracts and compare them with the current rates. See if any of them have gotten too high, relative to the rates in your area. You may need to determine whether or not you need to re-negotiate with them. It may be time to ask for a rate reduction or look for someone new.
Aside from the rate, don’t forget that you can also renegotiate their schedule as well. Consider reducing the number of times the service is provided. If the contract also specifies the number of crew or staff assigned for the job, consider if you need all of them as well.
What’s Included in Your Budget?
You may regularly check your household budget for unnecessary expenses. It could be time for your HOA budget to get the same review as well.
Even if money is not tight at the moment, it’s always a good idea to make sure that your HOA is cost-effective in everything that it does.
Have your board read over your association budget to look for areas that might be unnecessary. Are there areas where the money is being spent on things that aren’t needed? Do you have insurance premiums that are too high? Take some time to analyze the budget areas and brainstorm ways to lighten it up.
Here are some areas you can check in order to try and lower HOA fees for everyone.
1. Landscaping Costs
Just how much is your HOA spending on landscaping and gardening? The aesthetics of your community is crucial to raising property values. However, the board should also check if it’s worth it to maintain extensive garden areas frequently. The HOA can try to reduce the frequency of hiring a landscaping crew.
There is also the option of replacing high-maintenance gardens and trees with lower-maintenance alternatives that will look just as nice. This way, you’re lowering landscaping costs, and at the same time lower HOA fees, in the long run.
2. Talk to Your Property Management About Fees
Ideally, your property managers will also be helping you with ways on how to reduce HOA fees. However, external property managers will not be likely to lower the fees of their own accord. The HOA board should take up the initiative to discuss fees with their property management company.
3. Check Your Insurance Premiums
Insurance costs can quickly add up for an HOA. Check with your insurance carriers if you can negotiate lower premiums if you get new coverage from them – like if you’re getting new D&O insurance, for example. Also, don’t hesitate to renegotiate with your current carriers every time your policy has to be renewed.
4. Stick to the Essentials
If you are getting complaints that HOA fees too high to pay, consider sticking to the essentials. That is, try to see if you can put off non-essential projects. That hallway redecoration for the condo can perhaps wait for next year. Those roof repairs on the walkway that hardly anyone uses can probably wait as well.
This way, you can get the crucial repairs done this year, then you can see to the others later. It’s a way to spread out the costs and lower HOA fees at the moment.
How Do Your Reserves Look?
HOA reserves are a crucial area of HOA management. You need a good reserve to make sure your HOA can pay for emergency repairs and unexpected expenses.
However, sometimes the HOA reserves can actually build up if you don’t need to use them for a while.
It’s always a good idea to review your reserves, even when you don’t need them at the moment. Check your reserve study as well, and see if there are any major upcoming projects that you need those reserve funds for.
If there’s a lot of funds in your reserves, you might consider lowering fees that go towards it each month. Your HOA board can consider reducing the amount it puts into your reserve fund temporarily. That way, you also lower HOA fees for a time while still being able to pay for everything.
Can a Homeowners Association Fine You For Not Paying HOA Fees?
Yes, an HOA can fine you for not paying HOA fees, or if you’re not in compliance with the HOA code. However, you have some recourse, and you can ask the board for leniency.
Lower HOA Fees by Just Being Observant
Looking at each of these areas gives your board a good sense of where you are and what can be changed. Even if you struggle to find big ways to lower HOA fees, you can at least know that they are justified and contributing to the right places for your HOA.