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Increasing Assessments

As with all associations, expenses go up each year as reflected in the annual budget. First and foremost, these expense increases should always be offset by matching assessment increases.  The reasoning being, that these gradual yearly assessment increases are viewed much more favorably by the membership, than an extreme increase down the road.  When these large annual increases do occur there can be a great deal of animosity as a result.

Another important point about not increasing the assessment when expenses increase, the restraints of governing documents.  Most association governing documents cap or limit annual assessment increases.  So if the assessment does not keep pace with increases in the association’s expenses, the governing documents may prevent increases in the future to cover operational shortfalls.

If the increase is gradual or if the increase is large, the annual budget is the first line of defense.  As always, the annual budget should reflect the best efforts of the board to predict the upcoming expenses of the association.  A lackadaisical approach to budgeting or a simple error in a budget can quickly erode membership confidence in the association’s expenses.  For example, having an item on the budget that was a one-time emergency expense that is unlikely to reoccur can make the budget appear inflated.

Adequately communicating an assessment increase to the membership begins with a clear and precise description of the facts of the matter.  Because of everyone’s busy way of life, communications must be clear and precise and this is best accomplished in communicating on one page or less.  Elaborate explanations and multiple pages of text are better presented in bullet points and bar graphs on one page, an “overview.”  This assessment increase overview is designed to accomplish the overall goal of the membership reading and comprehending the matter. 

At the end of this article, there is an example of an assessment increase overview. 

There are four parts to this overview:

• The increase

• Why there is an increase

• Where their money is going (Bar Graph)

• What they received for their money and what they will be getting for their money going forward


  1. The increase:

         “We are writing to inform you of your 2021 dues rate for your home…making the new 2021 monthly dues rate $181.10.”

    This increase aspect being the most crucial to communicate to the membership is first.  This section sets forth the legal requirement of notice.  Many times to enforce an assessment increase in court there has to be written notice to the membership. 

  2. Why there is an increase:

         “The primary reasons for this increase…Sewer line breaks…Age of the community…”

    Providing detail to the membership on why the dues “must” increase goes a long way in relaying concerns.  The more specifics on this aspect the better.  If the association water bill went up 8.5% along with the electricity bill going up 4%, this is most pertinent to the increased dialogue.

  3. Where their money is going (Bar Graph)

         “Per the 2021 budget, the $181.10 monthly dues are allocated as follows…”

    A bar graph or any similar visual vehicle reinforces the funding needs of the association.  This is especially true with members who only skim the overview for the high points.  In addition, this type of graphic also helps dispel the incorrect perception that some members may have that their dues are not being spent wisely.

  4. What they received for their money and what they will be getting for their money going forward

         “Many large projects have been completed in the past two years and the overall financials are healthy…the primary challenge in 2021 will be removal and potential replacement of dead and overgrown trees/bushes… throughout the community…Maintaining the landscaping and appearance is an important factor in supporting property values.”

    While this part of the overview may speak for itself, it is always best to end on a positive point.



c/o William Douglas Management Company
PO Box 37109 · Charlotte, NC 28237 · phone (704) 347-8900 · fax (704) 377-3408

[dt_divider style=”thick” /]

November 30, 2020
To:      All Owners of the Happy Glen Homeowners Association
From:  Board of Directors for Happy Glen Homeowners Association
Re:      New Monthly Dues Rate for 2021 Year
Dear Owner,
We are writing to inform you of your 2021 dues rate for your home located in the Happy Glen Homeowners Association. Enclosed is a copy of the 2021 Budget for your records. There will be an increase in the monthly homeowner’s dues of 5% which is equal to $8.62 extra per month, making the new 2021 monthly dues rate $181.10. This is an annual increase of $103.44 per home resulting in $18,619.20 of additional revenue for the year.
The primary reasons for this increase in association dues are as follows:
  • Sewer line breaks and anticipated proactive repairs to lines to prevent sewage from backing up into our homes.
  • The age of the community being twenty-plus years now means increased replacements & repairs needed.
  • Anticipated costs of landscaping removal of trees and other replacements due to tree roots damaging sidewalks, driveways, etc. throughout the community.
  • Repairs to three detention ponds located in the community to prevent failure and flooding of the community.
  • This allows for reserves to be funded at the current level.
Per the 2021 budget the $181.10 monthly dues are allocated as follows:
Budget chart example

  • Repairs & Maintenance: $32.49
  • Utilities: $50.48
  • Insurance: $25.34
  • Landscaping: $39.86
  • Reserves: $18.11
  • Administrative: $14.82

Many large projects have been completed in the past two years, the overall financials are healthy, and delinquencies remain low. Additionally, we anticipate the primary challenge in 2021 will be the removal and potential replacement of dead and overgrown trees/bushes throughout the community as well as addressing erosion/drainage. Maintaining the landscaping and appearance is an important factor in supporting property values.

Please be aware that coupon booklets will be mailed out shortly unless you are set up on auto-draft. If you are on auto-draft they will automatically adjust the amount drafted starting January 2021. If you pay online with your bank please make sure that you change the dues rate to $181.10 per month effective January 1, 2021.
With kindest regards,
Board of Directors
Happy Glen Homeowners Association



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