It’s a tale as old as time (at least as long as HOAs have been around): year by year, the dues gradually increase until what you were originally paying has doubled or tripled. Some people are dismayed at this, while others understand it’s just the nature of inflation and the guaranteed rising cost of living.

But if dues increase by too much within one year, it can be cause for concern to many homeowners, and rightfully so. Homeowners living within an HOA come to expect that they will see the effects and payoff of their dues. Additionally, that rate increase can be a financial burden when already keeping up on the mortgage and other payments.

The question then arises, how much is too much when an HOA raises dues?

The answer is not as clear cut as you may want it to be. With some exceptions, Florida does not limit how high an HOA can raise yearly dues.

No maximum

Technically there is no limit to how much an HOA can raise dues each year in Florida. That said, within each HOA’s CC&Rs there could be specific rules on raising dues. For example, some declarations may state that there can only be a 5% increase each year, however, this is on a case by case basis. You must examine your association’s documents to see if any limitation on dues has been incorporated into your HOA’s rules and regulations.

One reason that you may not find this limitation on dues in your HOA’s CC&Rs is that limiting an increase in dues could be counterproductive. For instance, if your HOA’s due increase is limited to 2% yearly, this could actually inhibit your association from raising dues enough to cover the bare necessities and thus keep your community from being able to pay for much needed repairs.

The 115% rule for condominiums

Though there may be no legal limitations on raising dues, there is a stipulation in Florida law that applies to condo associations. FS 718.112(2)(a) states that if assessments are increased by more than 115%, then a substitute budget can be requested. To do this, 10% of the owners must petition the board within 21 days of the budget’s imposition to request a special meeting.

Additionally, in a condo association, if the developer controls the board then there is an automatic rule that assessments cannot rise by more than 115% of the previous year. unfortunately, there are no such stipulations for HOAs.

Look at the budget

Once protection you do have is an full and transparent budget. HOAs and condo associations must create and adhere to a detailed annual budget. This budget would itemize any and all expenses and the budget must invariably justify the raise in dues.

Basically, if your HOA is planning on raising dues, there must be detailed proof of why this raise is warranted within the budget.

Get involved

If you have serious concerns about the increase in dues, your best bet is to take proactive steps to inform yourself and understand your community’s needs. Get involved with BOD and attend meetings regularly, especially budget meetings.

There are a number of reasons dues might increase each year. Vendor prices might rise, materials and utilities can increase, a reserve study may have discovered that an association’s reserves are depleted. It is important to understand the need for due increases before assuming they are unjustified.

One final note. In rare cases, an overinflated budget and raise in dues can be due to a fiscally irresponsible board. In cases like these, make sure you are asking to see the complete budget and ask for full transparency. You can attempt to remove the problem board members if they are found to at fault, but it’s always best to consult with a community law attorney first.