Reisterstown, MD asked in Real Estate Law for Maryland

Q: Can an association raise more than 10% of fees. My association went from in the past 2 years from $20,$25 & now $95 rais

I need answers on how an HOA can raise more than 10% a year? The association os grossly ripping us off. When asked to see their books as a Home Owner intitled to what I asked. I was turned down and that is not legal. Can you help?

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1 Lawyer Answer
Mark Oakley
Mark Oakley
  • Rockville, MD
  • Licensed in Maryland

A: You’re not going to want to pay a lawyer’s hourly rates if you don’t want to pay $50 more per month or whatever the increase is. Maybe if you gathered a group of homeowners to share the legal fees, all being represented by the lawyer, that would be a way to make it affordable.

But first you need to understand a basic fact about the HOA: you are a member of the HOA, along with all the other homeowners of the HOA. The HOA Boatd consists of a group of your neighbors, whom you all voted for to act—for free. If they raise the monthly fees, they raise them on themselves as well. There must be a reason.

The Board has the thankless job of managing the HOA budget, which is funded by the monthly HOA fees. That money then needs to be managed to pay for the upkeep of the “common” areas of the community not owned by an individual homeowner. This can include paving and lining parking areas, lawn and landscaping maintenance, snow removal, trash collection, swimming pool maintenance and lifeguard salaries, premiums for liability and casualty insurance, property taxes,, and any number of other necessary expenditures. If there’s a community club house, a new roof or fencing or plumbing repairs may be needed. Some major costs, like a roof or parking lot resurfacing, or fixing a swimming pool leak, can eat up most of a year’s budget. It is the Board’s job to plan for these needed expenses and figure out how to pay for them. Each homeowner who bought into the community HOA is liable for these expenses, because each shares in the ownership of these common areas, and if the money isn’t in the HOA bank account, then either a special assessment on each homeowner is made, requiring each to pay their share, or the expense is planned out in the future by a monthly increase in the HOA dues so the money will be available when the Board needs to pay it out.

Sometimes the Board will hire a private management company to do all of this, and there’s a cost to that as well (the management fee that has to cover employee salaries and office overhead of these management companies, that are often managing many similar HOAs).

Your HOA documents (by-laws, etc.) will spell out all your rights to information and books of account access. Become familiar with those provisions and cite them by section and title when requesting information. Put your requests in writing. Do your research before going to a lawyer. Right now you’re just reacting to a new increase in dues, without any information. There may be good reasons for the increase. Sometimes past Boards put off needed maintenance and repairs so as to avoid raising monthly dues, which only makes the repairs more expensive as things deteriorate to a worse state. Now matters may have reached a tipping point and the repairs or work cannot be postponed any longer. The current Board may be faced with little choice but to raise the fees.

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