By Andrew Lester

A community association’s board of directors is elected by fellow homeowners to make decisions for the well-being of the community, including how the community’s finances are managed.

Regulations in every state require that homeowner associations and condominium associations maintain at least two accounting budgets: (1) an operating budget to cover all expenses associated with the functioning of the community, and (2) a reserve budget to pay for planned projects down the line.

The annual projection of these budgets, which is determined by the board with the help of professionals such as property managers or accountants, forms the basis for owner assessments — aka HOA or condo dues.

There is a prevailing notion that keeping dues flat means a board is doing a good job. But raising dues doesn’t necessarily mean a board is falling short. There are valid instances where raising dues is the right decision for the long-term health and prosperity of the community.

Read the full article here.