Q: Can my HOA increase my dues by 159% because the developer (who still owns 2/3 of the lots) won't pay their share?
The developer controls the board until all properties are completed/sold. The HOA explains the increase like this: The main reason for this increase is due to the delays in constructing the second phase of The Links, which has meant the whole of the Association has been relying on only one-third of its projected income to pay its expenses. Once homes in the second phase have begun contributing income, the budget will be reassessed.* We are confused as to how the HOA can charge the 1/3 current owners for the 2/3 undeveloped/uncompleted properties owned by the developer. I also can't find in the statute 720.308 any reference to a maximum HOA dues increase year over year.
A:
You cannot find the statute because there is not one that addresses this issue. Any assessment increase caps are in the Declaration of Covenants, Conditions and Restrictions (CC&Rs) for your HOA, which we cannot review in this online forum. Caps were popular decades ago but most modern documents do not include them because they have unintended consequences during periods of high inflation.
Usually, if the undeveloped lots are not contributing, the developer has guaranteed to deficit fund the operating account. Sounds great but it usually doesn't happen and it's expensive to sue the developer to make it happen. My recommendation is to at least consult with an experienced HOA attorney to review your CC&Rs and advise you on how the HOA is to fund the operating account. You should also submit a request to inspect the official records (send by certified mail, return receipt) and the HOA has 10 business days to provide you access to the records. At the inspection make copies of the financials with a smart device or pay the HOA for the copies. Watching the money is the most important thing a homeowner can do to protect their investment.
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