HOA Dues: 8 Steps to Cutting the Costs

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By Brendon DeSimone

Whether you just bought a condo or have owned one for years, you've probably accepted the monthly homeowners association dues at face value. But there are reasons why you shouldn't. HOA dues are money out of your pocket.

They can have a huge impact on your decision to buy, or not buy, a particular home. For example, you might have fallen in love with a condo in a big complex but decided you just can't afford the HOA dues. Also, high HOA dues can be a deterrent to future buyers, too, when you go to sell later.

An HOA is made up of residents of the condo building or complex -- volunteers who are busy with their jobs and families just like everyone else. It could be that no one on the HOA board has time to look for ways to reduce the monthly HOA dues. But like any budget, there could be lots of ways to reduce expenses. Here's how you can have a positive impact on your HOA dues:

1. Ask to see the HOA budget. As a condo owner, you have the right to review the HOA budget. Get a copy and check it over thoroughly. If you have questions, ask the HOA president or a board member.

2. Join the HOA board. If you're on the board, you'll have more opportunity and more clout to dig into the HOA's finances -- such as its contracts with the property management company, landscapers and so on.

3. Review the HOA's contracts. An HOA often has agreements with a variety of vendors: the property management company, a landscaping/grounds maintenance company, and so on. In some cases, those agreements or contracts may have been negotiated years ago and might be renegotiated today in more favorable terms for the HOA.

For example, the recent buyer of a condo in an Atlanta complex felt like the HOA dues were too high. So he asked to join the board, and the members were happy to have him. He then performed an audit and discovered money was being wasted in several areas, such as on landscaping/gardening.

The HOA's agreement with its gardener had been negotiated five years earlier. The gardener, by default, raised his fees every year. The Atlanta condo buyer, with the HOA's approval, sought bids from a variety of other gardening companies and succeeded in finding a reputable gardener at a lower monthly cost.

4. Reduce landscaping costs. If finding another landscaping or gardening company isn't an option, maybe the HOA can reduce the frequency of these services, without jeopardizing aesthetics. It's worth asking.

5. Determine if the HOA is paying too much in property management fees. In large condo developments, the property management company would likely be the one to lead the charge to reduce expenses. But they're unlikely to advocate lowering their own fees. So you'll need to work with your HOA directly in exploring ways to reduce the property management company's fees.

6. Look at insurance premiums. Insurance is often a big HOA expense. Get quotes for insurance premiums and be prepared to renegotiate with your current carrier once your policy comes up for renewal.

7. Defer non-essential maintenance or other projects. Aside from HOA dues, condo owners are often hit with assessments to cover things such as roof repairs and hallway painting. Talk to the HOA board about deferring any non-essential HOA projects for a year or two.

8. Reduce reserves, if possible. Every HOA has reserve funds to cover unexpected expenses. Over time, those reserves, if not tapped, build up. Find out how much the HOA has in reserves. If it's a healthy amount and no major improvement or repair projects are in the works, ask the HOA board to consider temporarily reducing the amount it puts into reserves every month.

Easier said than done?

Most HOAs will welcome your participation. But your belt-tightening suggestions may require a formal vote from HOA board members or the entire association before they're enacted. At any rate, understand that changes to the budget may not happen overnight. Finding the fat, renegotiating fees, and asking for additional bids can be extremely time consuming.

Still, it's worth a try. Talk to your HOA president, treasurer or other board member. Tell them your goal is to simply explore possible ways to lower the association's cost for everyone's benefit. A little bit of legwork may save you -- and your neighbors -- some money every month.

More from Zillow:
3 Ways to Avoid an HOA Horror Story
Demystifying HOA Dues and Special Assessments
3 Ways an HOA Can Screw Up the Sale of a Condo

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Most Ridiculous HOA Disputes
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HOA Dues: 8 Steps to Cutting the Costs

Location: Stapleton, Colo.

What the homeowner did: Sarah Cohen's 3-year-old daughter, Emerson, drew on the sidewalk using chalk.

The HOA's response: Chalk art potentially offends, disturbs or interferes with "the peaceful enjoyment" of the community and is not allowed. "The association is trying to go down a  path of 'do no harm,' " an attorney representing the HOA said.

Outcome: The issue will be brought to a vote at a future HOA meeting. In the meantime, Cohen plans on continuing to let her daughter draw on the sidewalks. "It's summertime, and God forbid my daughter is drawing flowers, her name and hearts," said Cohen.

Read the story on AOL Real Estate.

Location: Spring, Texas

What the homeowner did: Nick and Jeni Dreis took home a 6-month-old red kangaroo as a vocational training animal for their 16-year-old daughter, Kala, who has Down’s Syndrome.

The HOA's response: The family should “immediately remove the kangaroo from the property, as it is not a household pet nor can it be maintained for any business purposes.”

Outcome: In the wake of widespread public support for the Dreises, the HOA reversed its position. “The letter should never have been sent,” said Jeff Crilley of the Estates of Legend Ranch Homeowners Association. “[HOA officials] were unaware that the kangaroo was being used for therapy purposes.”

Read the story on AOL Real Estate.

Location: Portsmouth, N.H.

What the homeowner did: Planted perennial flowers in her yard. Kimberly Bois claimed she had the plants in her yard before the condo board even existed and had permission from the developer to plant them.

The HOA's response: Sent the homeowner 13 certified letters demanding she remove the plants, starting with a cease-and-desist order and escalating to thousands of dollars in fines and penalties. "It's not about do you like these flowers or don't you," said the condo association’s attorney, Sandy Roberts. "It's a question of was it authorized and is it permanent."

Outcome: Condo association filed a lawsuit against Bois to pay $4,500 in back fines and $8,000 in attorney’s fees.

Read the story on AOL Real Estate.

Location: Stratford, Conn.

What the homeowner did: Barbara Cadranel put a mezuzah on the doorframe of her apartment.

The HOA's response: Threatened to impose a $50-a-day fine until the religious door fixture is removed.

Outcome: The condo association agreed that Cadranel could hang her mezuzah and rescinded all penalties and fees against her. It also said it will allow residents to place mezuzahs and other religious symbols on doorframes without requiring advance approval.

Read the story on AOL Real Estate.

Location: Lexington, Ky.

What the homeowner did: Tiffany Veloudis built a playhouse for her 3-year-old son, Cooper, who has cerebral palsy, on the instructions of the toddler’s therapist. It cost the family $5,000 to construct.

The HOA's response: Demanded that the playhouse be removed and ordered the Veloudis family to pay $50 for every day the playhouse remains in their yard.

Outcome: After the story garnered national attention, the association decided the playhouse could stay until a solution could be worked out. State representative Richard Henderson has submitted a bill to enable homeowners to build small structures for therapy purposes with doctor approval, regardless of HOA rules.

Read the story on AOL Real Estate.

Location: Bossier City, La.

What the homeowner did: Jodi and Timothy Burr put up a front yard banner supporting their son, Corey, a lance corporal in the Marines who was serving in Afghanistan at the time.

The HOA's response: Told the family it was breaking the HOA's rule prohibiting all signs from public display.

Outcome: The HOA sued the Burrs when they refused to remove the sign. The Burrs argue that other homeowners have signs in their yards, and that the enforcement of the rule is “selective.” They also are trying to meet with the HOA to discuss possible revisions to the rule.

Read the story on AOL Real Estate.

Location: Evans, Ga.

What the homeowner did: A nonprofit homebuilding group planned to build a house, free of charge, for Army Sgt. 1st Class Sean Gittens, who was paralyzed in Iraq and is unable to speak.

The HOA's response: The HOA stopped the construction of the home. It argued that the Homes for Our Troops foundation didn’t file the proper paperwork. 

Outcome: The Gittens left the development and are exploring other places to build the home. Homes for Our Troops has agreed to continue the project in a new location.

Read the story on AOL Real Estate.

Location: Macedonia, Ohio

What the homeowner did: Fred Quigly, a retired Army chaplain and minister who served during the Vietnam War, put up an American flag in his front yard.

The HOA's response: The flag violates the HOA’s rules on flagpoles. It offered to put the flag at the entrance to the development instead.

Outcome: The HOA relented and granted Quigly the right to fly his flag in his front yard.

Read the story on AOL Real Estate

Location: Frisco, Texas

What the homeowner did: U. S. Army National Guard Capt. Michael Clauer and his wife, May, failed to pay $977.55 in HOA dues.

The HOA's response: Foreclosed on the home, which was owned free and clear by the Clauers, and had it sold at auction.

Outcome: After a lawsuit, the Clauers reclaimed the title to the home.

Read the story on AOL Real Estate.


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