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You can reduce HOA fees for everyone in your homeowners' community by helping the board find ways to trim expenses, build stronger cash reserves and operate more efficiently. But you can't typically negotiate what you pay individually. Here's a closer look at how to lower HOA fees.
Can You Reduce HOA Fees?
It's possible to reduce homeowners association (HOA) fees. However, they're generally nonnegotiable on an individual basis. HOA fees cover the cost of maintaining community areas and amenities and are based on the organization's anticipated expenses for the year.
Most HOA boards have the right to raise HOA dues when the cost of living goes up, the HOA's insurance premiums increase, the HOA's cash reserves need to be replenished or the board anticipates a large upcoming expense. Lowering HOA fees typically involves finding ways to trim operating costs, like switching to more affordable vendors.
How to Lower HOA Fees
Every HOA is governed by its own bylaws, but these strategies may help lower HOA fees:
Get Involved With the HOA Board or Committee
HOA board members have a say in the direction and operations of the associations. Joining the board will give you more say in the direction and operations of the HOA, including fees. Or you can simply attend board meetings as a homeowner to stay in the know and make suggestions to help lower costs.
Renegotiate Vendor Contracts
Lowering the cost of what your HOA pays for regular vendors, like landscapers or security firms, might help reduce HOA fees. Vendor expenses often make up a large part of the HOA's budget, and your HOA may not be getting the best price for services. Ask the board to try and negotiate a better deal with existing vendors, or encourage other vendors to submit competing bids.
Review Your HOA's Budget
Trimming the HOA's budget can lower what you pay in fees. Review the budget closely to see how HOA funds are spent. Look for cash-saving suggestions to raise to the board, like putting off nonessential repairs or using HOA funds in more efficient ways.
Build and Maintain a Strong Reserve Fund
When the HOA board uses the operating fund to cover expenses, dues usually go up. But if the reserve fund has more than enough savings, ask your board to use part of the reserves to pay for the HOA's costs instead of raising everyone's fees.
What Happens if You Don't Pay HOA Fees?
If you miss an HOA payment, the HOA will likely just charge a late fee. But if your account goes unpaid long enough, you could face serious financial and legal consequences. Each HOA has their own bylines, so it's important to read the fine print to understand the actions your HOA might take.
When HOA fees go unpaid, it's common for the HOA to send your account to a third-party collection agency, which can impact your credit. And depending on how much you owe, the HOA can also pursue legal action against you, put a lien on your property or even foreclose on your home.
What to Do if You're Struggling to Pay HOA Fees
Here's a few steps to take if you're struggling to pay your HOA fees:
- Contact your HOA right away. Let your HOA board know sooner rather than later if you can't pay your HOA fees. They may be able offer you a solution that helps you get back on track and avoid facing serious consequences down the line.
- Request a payment plan. If you can't afford to bring your account into good standing with a single payment, your HOA may be willing to split up the payments over time with a formal payment plan.
- Ask to have late fees waived. Late fees for missed HOA payments can add up fast and make it harder to pay down your account balance. Talk to your HOA board to see if waiving some or all of the late fees on your account might be an option.
- Look into financial assistance. If you're experiencing financial hardship, like a job loss, you may qualify for federal, state or local assistance. Depending on your situation, funds may be available to help you cover housing-related expenses, like HOA fees.
The Bottom Line
When you live in a community with a homeowners association, it's important to factor the cost of HOA fees into your budget. And they may increase every year, depending on upcoming expenses, your HOA's bylaws and other factors. But staying on top of the board's spending and making cost-saving suggestions could help keep HOA dues affordable for you and your neighbors.