Determining how much to charge condo owners in fees is a critical aspect of St. Petersburg condo management. If you charge homeowners too little, the HOA board won’t be able to take care of repairs and maintenance needed in shared spaces. If you charge too much, homeowners may take issue with being charged an unfair amount each quarter or year. In this article, we’ll discuss some strategies on how to assess HOA fees.
Comparisons with Other HOAs
Comparing your HOA fees to the average amounts charged by other St. Petersburg condo management companies in your area is a good place to start when determining your fees. If you compare your HOA fees with a handful of other associations, you can assess the average amount charged and decide what would be reasonable in your community.
Reviewing your current HOA finances is also a good place to start when determining HOA fees. If your budget and financial statements show that your HOA is able to maintain the property through current assessment fees, then you can reasonably assert that future fees will be enough to cover the financial needs of the association. In this case, you do not need to review other associations’ budgets or assess amounts charged by other St. Petersburg condo management companies in your area.
Purchase Price vs Value of Property Today
One way to establish the value of a condo association fees is to compare the purchase price of a property versus what it’s worth today. As the value of condos rises, so too will the repair costs. By seeing how much the condos have increased in value, condo associations can get a sense of how much their fees need to increase each year. Typically, HOA fees increase with time as a result of inflation or other factors that result in the need for increased maintenance or repairs. You can evaluate your current financial situation by comparing the purchase price with today’s market value.
Plan Special Assessment Fees
If the HOA runs out of money, then it may need to collect more immediately. This is called a special assessment and can only be used in emergencies. It is important to have an idea of what the special assessment fee should be ahead of time so that less work must be done to determine that in the middle of an emergency. Knowing what the assessment should be upfront also means that the HOA can give owners prior notice of what the assessment could cost if it is needed.
By considering some of these factors, you can properly assess HOA fees. Setting the fees correctly is critically important. Set them too low and the association won’t be able to function. Set them too high and condo owners will be unhappy. It can be difficult to balance between the two effectively. However, this is a problem that every association faces and overcomes. If you have questions about assessing HOA fees, contact your property management company or an attorney.