Breaking Down the Pros and Cons of Lowering HOA Fees
One of the pain points for homeowners when searching for the right Tacoma, WA, HOA is annual fees. Most homeowners want the ideal scenario of low HOA fees with high standards and services, but this is almost never the attainable reality.
The truth is that there are pros and cons to low HOA fees, so it’s important to assess what will work best for your unique HOA. While low dues keep residents happy in the short term, it also reduces your ability to maintain and improve your community association over time.
While lowering HOA fees to attract or appease homeowners may seem tempting, it’s important to understand the pros and cons of lowering HOA fees before making such an important decision.
Are Low HOA Fees Good?
At first glance, low HOA fees may seem like the ideal solution. All homeowners want to save money, so offering lower annual fees can make your community more attractive to potential buyers.
However, as with most cheap things, you typically get what you pay for. While low HOA fees will leave residents happy in the short term, it can cost your community much more in the long run by reducing your HOA’s offerings and leaving residents unsatisfied with their quality of life.
Pros of Low HOA Fees
As mentioned above, the obvious pro of low HOA fees is the short-term satisfaction of current and prospective homeowners. Property owners already have a lot of expenses to worry about, so having lower HOA fees will please residents and attract new buyers. After all, who doesn’t like saving money?
However, this happiness is only ever short-term, as the lacking finances will inevitably result in a lower standard of living. From neglected amenities to a lack of reserve funds, there is a wide range of negatives that will start to appear as the HOA fails to collect sufficient fees.
Cons of Low HOA Fees
Homeowners often don’t understand everything involved in running a successful HOA, so while they may rejoice at the idea of paying low annual fees, they’ll soon begin to complain once their expectations for quality of living aren’t met. When insufficient fees are collected, there are three main issues that will begin to plague your HOA: inadequate maintenance, surprise assessments, and even legal trouble.
One of the primary purposes of HOA fees is to cover the cost of maintaining common areas and amenities within a community. Lowering annual fees can result in inadequate funds for essential maintenance and repairs, leading to a decline in the community’s appearance and, therefore, a decline in property values.
Having lower annual HOA fees can also result in surprise costs for homeowners later down the line. Part of the HOA’s annual fees are allocated to reserve funds for any emergencies or unexpected major expenses. If insufficient fees are collected, the HOA may have to issue a special assessment to homeowners to cover any sudden costs. This can cause significant financial stress for some homeowners and generally decreases resident satisfaction community-wide.
Finally, low HOA fees can cause legal trouble for your community association. HOAs are governed by federal, state, and local regulations that must be adhered to. If lowering HOA fees results in cutting corners or skimping on essential services, it can put the community association at risk for legal penalties. To ensure that you’re meeting any legal requirements for your area, it’s always best to invest in a professional HOA financial management firm that can assist you with determining appropriate and sufficient fees.
At The Management Trust, we can assist Tacoma, WA, HOA boards with handling difficult tasks such as issuing assessment increases. While executive decisions always come from the board, we can execute those plans and implement any changes that need to be made on behalf of the community association. More than 1,500 communities throughout the country trust The Management Trust to get the job done right, including dozens throughout the Tacoma, WA, area. To find out more about our full range of available HOA management services, call The Management Trust at 253-472-0825 or fill out our online contact form today.
