HOA Loan and Insurance Quotes

Subscribe to Blog

Your email:

Follow Us

Looking for answers?

condo association blogCan't find the answer you're looking for?  Ask your question here and we'll post it in our blog.

Browse by Topic

Condo Association Management Blog

Current Articles | RSS Feed RSS Feed

Condo Associations: Stay out of the Assessment Zone!

Posted on Fri, Jun 05, 2009 @ 07:34 AM

Assessment is the one word every condo owner despises – they come and go like a Midwest twister and leave condo owners’ wallets empty. Assessments are a fact of condo association life – they are necessary to deal with the ongoing upkeep of properties, but for condo boards using assessments to correct condo association budgeting mistakes is never received well. Here are some suggestions to consider when planning your annual condo association budgets to mitigate these risks:


Always increase condo fees
Condo boards like to win one over with the condo association by holding the condo fees flat from last year. Even if the costs of services from last year are flat or even decline, I feel a small condo fee increase is always appropriate. You can’t prepare for the unknown and inflation normally gains at a rate of 2% to 3% per year. So, if you don’t increase condo fees today, the correction curve will probably catch you later and the incremental “jump” is larger. So, even a tiny increase in condo fees is better than no increase at all.  Its also important to have a condo fee and assessment collection policy in place.  This sets expectations for chronically delinquent owners.  If you have late fees due to you HOA or Condo Association, you can try our HOA Collections Service


Have two plans instead of one in your annual condo budget
Make two condo association budget plans. One based on actual for the year plus a small percentage and an “upside” condo budget with a larger percentage for each line item. Vote to pass both the actual and “upside” condo budget plans and set condo fees according to the “upside” plan. On a quarterly basis, see where expenses are year to date. If you’re bringing in more condo fees than you need mid-year, lower the condo association fees for the rest of the year and look like a condo board hero.


Don’t be fooled by Mother Nature and Energy Cost
Two things we can’t predict – the weather (at least North of the Mason-Dixon line) and price of oil and gas. Both are volatile and can wreak havoc on your energy bills. Make sure to have some financial padding in your condo budget for gas and oil - if these are condo association common items.

Consider a Condo Association Loan or HOA Loan

A condo association loan (or HOA loan) is becoming more popular as a way to increase an condo association's cash position without having condo owners paying down large one-time assessments.  At minimum, a condo association line of credit will position your HOA for times when cash is low - late condo fees, foreclosures, expected property repairs...things of this nature. By the way - consider an HOA loan for capital projects.

At the end of the day – it’s up to you and your fellow condo board members to try to budget properly, but I assure you no condo owner is happy with an unplanned “twister scenario” to their wallet, right around Christmas time.

Tags: , , ,


I'm a big proponent of higher dues vs. future assessments. Having special assessments for projects leads to problems when owners can't pay. You can put a lien on their unit, but it's a hassle for everyone. One of the keys to sell higher dues to the owners is to emphasize that it is still their money, they still own it, it's just in a different bank account. When they go to sell their unit, it should be worth more by the amount of their share of the higher reserves.

posted @ Thursday, June 21, 2007 2:35 PM by Bob

As the treasurer of a newer condo, I'm working up a new budget right now. We're going to have to increase fees somewhat. Our current monthly bill is based on what our developer set up when he started the association. By law he was required to contribute to our account for each unit every month until he sold it. Since few people lived in the building consuming services, and he didn't want to tie up his capital, he kept the monthly dues artificially low. I'm trying to figure out something more realistic. Does anybody have any good advice on long term budgeting for buildings? For example how long should a roof last and what should it cost? Or things like carpeting?

posted @ Thursday, June 21, 2007 2:42 PM by Anonymous

We had a simliar situation where the developer's budger did not cover the real costs at the end of the year. We had to end the first year with an assessment. I would focus on the operational costs, rather than capital expenditures. You should be able to do some simple trending. If its an older building that just went condo, your service providers should supply you with past consumption of usage and costs as comparison. If the roof caves in tomorrow, hopefully your insurance policy will cover it. Other options include an assessement or a condo loan.

posted @ Thursday, June 21, 2007 5:37 PM by Roger

I live in a townhouse community outside of Philadelpia that was built by a well-known national builder headquartered in the Phila. burbs. The community is 18 years old, and we are experiencing extreme issues with the construction. Once we began removing stucco, shingles and chimney stone, the shoddy workmanship became apparent. The repair is going to cost each condo owner approximately $30,000 to $40,000. A big surprise for a new owner like me. Can anybody tell me if we could hold the builder liable for the issues we are experiencing. Our attorney tells us that the previous Board signed off, and there is nothing we can do. It doesn't seem right to me. We are literally rebuilding from the ground up.

posted @ Wednesday, August 01, 2007 3:00 PM by Bob Shell

Why isn't there CAPS to how much a HOA can give in assessments. We were blindsided with huge 13k, 17k and so on fees in our condos after winning a settlement. Well MORE damage was supposedly then orginally thought, money mismanaged, bad judgements or who knows what happened. Why the heck do I have to pay for nazi hoa leaders misjudgements. It's been so weird, they don't hold meetings where homeowners are invited, they force homeowners out of their homes to rip the insides and outsides apart. I had 10X more rights as A renter. What stops the HOA from saying no, wait, we want to give you a 200k assessment tomorrow..and a 100k the next week? They won't let anyone say anything online, or to them, or they flex their muscles and back themselves up lawyers from OUR money we pay them. I've never seen such dictatorships. We've been dealing with construction/litgation and crap for 4 years now, and only got us to sign off on going on with a suit by sugar coating it...they said it wouldn't affect OUR building, only other building that really need it (plus we have the funds from the lawsuit to cover it) that's what they told us...lied (or just sorely miscalculated) to get our votes basically. They got our votes and went to town with construction. Barely any communication and lots of demanding. These condos have no cohesiveness, and we don't do fun things like hold yearly yard sales, or think about anything but irritating stuff. Every letter is worse, oh gee, it's worse than we thought please give us money. I would've rather paid monthly higher dues if they would've managed their suit money and monthly dues better and then devestating homeowners with stupid assessment fees. Omg do I live in America or a Third World Country? My whole condos, people are way too passive and just saying "where can I write a check"...where is the uproar? What are the poor condo owners going to do? Get a lien on their home and lose their homes and have nowhere to go, get their credit ruined and all because the HOA and management companies couldn't get it together, left out homeowners in the decision-making and make dumb decisions.

posted @ Thursday, December 11, 2008 2:09 AM by thatgurlinthatstate

what can unit owners do when the present association refuses to pay bills, and loans that are due, just received a notice from one vendor that says they will garnish our wages, income tax returns, anything to get their money we are 2 months behind already

posted @ Saturday, February 13, 2010 3:20 AM by maria figueroa

this is same person as from last blog, had elevator out for 11 months, we had a meeting with management company to get them out they were outvoted and for some reason they got back on the board two months ago and everything is going downhill what can we do

posted @ Saturday, February 13, 2010 3:27 AM by maria figueroa

Our condo association is 5 years old- our high-rise building was an apartment/condo conversion... I've been the president for almost the entire 5 years.  
I have read various articles that warn buyers to watch out for condo associations with significant debt because then your money is going towards interest instead of towards the association. 
Our board always tries to use cash to pay for projects and use debt as a backup option. We have 2 big projects coming up- sprinkler system and elevator moderization. While nobody likes assessments, sometimes they still are necessary even when a board manages the finances of the association very carefully. Also, you never want to completely drain your reserves because something will always come up when your reserves are empty.

posted @ Tuesday, March 02, 2010 10:55 PM by Mike

How much can we charge as late fee 
in assessment collecting?Hana

posted @ Sunday, April 11, 2010 9:37 PM by Hana

DO NOT USE HOA loans, ever, period. The only people who will tell you things like "they're becoming popular" are institutions that are profiting from them.  
Owners get screwed; the entire notion of loaning to an HOA is ridiculous. 

posted @ Thursday, December 09, 2010 4:40 AM by Former Manager

What does "Former Manager"mean when he says that the "entire notion of loaning to an HOA is ridiculous"?Why? Just saying that it's ridiculous does tell me anything. Explain. My Condo does not have any loans but we do have a line of credit. If there's an emergency we would borrow. I see nothing wrong with going along with a loan if the Board thought it best.

posted @ Friday, March 11, 2011 8:10 PM by Sally Santiago

Where can I find statistics on how much condo fees have risen over the last few years, especially for my area in Greenwich, CT?

posted @ Monday, April 25, 2011 4:42 PM by Bob Fannin

Raising fees every year is a very good idea. Do so avoids sudden large raises, and allows the Board to plan effectively and make appropriate repairs as necessary.  
There might be a Condo Association in your area. Otherwise get on the phone and start polling other condos. Some will cooperate other won't. You might promise to share your results with any Condos that share their data with you...

posted @ Monday, April 25, 2011 7:22 PM by Boris & Charlie

By Condo Association we meant Association of Condominiums. A group of condos that get together to share problems & solutions.

posted @ Monday, April 25, 2011 11:03 PM by Boris & Charlie

We got a notice from a Condo board I had never heard of claiming they can assess me 800 bucks for a shared parking lot...If I never got to vote for the officers, how can they legally assess us? Seems like taxation without representation. Noone in our 12 unit condo was ever asked to vote in this larger 90 unit condo assoc.

posted @ Friday, September 02, 2011 8:19 PM by John Mastro

In my apartment we are looking in to getting vinyl flooring. How much should it cost? And is it worth the money? http://apexfloortile.com/chicago-il-vinyl-flooring-congoleum-linoleum-flooring.htm

posted @ Tuesday, September 16, 2014 9:39 PM by Emily Dye

Post Comment
Website (optional)

Allowed tags: <a> link, <b> bold, <i> italics