Dues & Assessments 101: Set Fair HOA Budgets, Avoid Surprises

Last updated: September 7, 2025

Most owners ask two things: “What do I pay?” and “Why?” This guide translates the money side of your association into plain steps. It shows what hoa dues and assessments fund, how amounts are set, and the rules to adopt them. You’ll see notice windows, payment options, state guardrails, examples, and short how-tos.

Answer key: Dues fund operations and reserves; special assessments are one-time charges. Use open notice, clear math, and fair options to stay compliant.

TL;DR

• Dues = recurring; specials = one-time for gaps or projects.
• Typical grace window: 10–15 days; late fee often $15–$50 or ~10%.
• Healthy budgets save 15–40% for reserves; follow your reserve study.
• Notice before adoption is often 14–30 days (check your bylaws/state law).
• Give options: installments and early hardship plans.

People also ask

• Are fines the same as assessments?
• Do owners vote on regular dues?
• Why did my dues jump this year?
• What is a “healthy” reserve level?
• Can I refuse to pay a special assessment?

Owner quick box

• What to pay: See your statement or the RunHOA Dues portal.
• When: Due date + grace window appear on each bill.
• How: Pay online (one-time) or mail a check; set a calendar reminder to avoid late fees.
• Selling? Ask for a status/estoppel or resale certificate via RunHOA Documents.

Q: Can late fees be waived? A: Sometimes, per policy or one-time courtesy. Ask early.

Dues vs. special assessments

Dues are recurring. They fund services and savings. Special assessments are one-time. They fill gaps or pay for major projects.

• Dues → operations, insurance premiums, and reserve contributions.
• Specials → roof, paving, disaster costs, high deductibles.
• Fines are penalties, not assessments.

Q: Are fines the same as assessments? A: No. Fines punish violations; assessments fund shared costs.

How dues are calculated

Step 1: build the annual budget. Step 2: choose the allocation method. Step 3: pick a billing cadence and publish.

• Budget: operating costs + reserve contribution.
• Allocation: equal shares or weighted (percentage interest, square footage, unit type).
• Cadence: monthly, quarterly, or annual.

Q: Why did my dues jump? A: Common drivers: insurance +10–25% year-over-year, utilities, wages, and better reserve funding.

Reserves & reserve studies

Reserves pay for big replacements: roofs, paving, elevators, and more. A reserve study sets targets and timelines. Follow it to reduce surprise specials.

Q: What is a “healthy” reserve level? A: There is no single number. Fund to your study’s plan and update it on schedule.

Special assessments—process & options

Use a clear need statement, fair math, and plain options.

• Offer lump sum and installments; note any early-pay discount.
• Explain how you chose the amount and timeline.
• Publish FAQs and a calendar before invoicing.

Q: Can I refuse to pay a special assessment? A: No, if lawfully approved. Ask about installments or hardship plans.

Approvals, notice, and timing

Adopt budgets in an open, noticed meeting. Send owners the math and impacts, not just a number.

• Notice windows: often 14–30 days before adoption; check your bylaws.
• Member votes: some communities require owner approval above set limits.

State callouts (examples):

• California: boards generally can’t raise regular dues over 20% without a member vote; special assessments over 5% in aggregate may also need approval (Civ. Code §5605).
• Arizona: foreclosure for unpaid assessments needs $1,200 due or 12 months delinquent, whichever comes first (A.R.S. §33-1807).
• Florida: estoppel certificates have fixed timelines and fee caps (F.S. §720.30851).
• Texas: open-meeting rules, payment plan guidelines (up to 18 months), and judicial foreclosure procedures live in Property Code Chapter 209.

RunHOA E-Voting and RunHOA Communications make notices and approvals simple.

Q: Do owners vote on regular dues? A: Often the board adopts the budget. Your documents or state law can require a vote at higher increases.

Insurance intersections

Premiums and deductibles shape dues. Higher deductibles lower premiums but shift risk to owners after a claim.

• Special assessments can fund deductibles or uninsured costs.
• HO-6 loss-assessment coverage may help owners; limits vary.

Q: What coverage is typical? A: Many HO-6 policies offer $10k–$50k+; terms control what’s covered.

Collections & hardship

Use a consistent, humane timeline: invoice → grace → late fee → demand → lien → (where allowed) foreclosure.

• Offer payment plans early; document all contacts.
• If a third-party collector is used, follow FDCPA rules.

RunHOA Communications automates reminders and letters.

Q: Where do fines go—operating or reserves? A: Usually operating revenue unless your policy says otherwise.

Worked examples & table

• Equal shares: $600,000 ÷ 100 units ÷ 12 months = $500/month.
• Weighted (1.20% interest): $600,000 × 0.012 ÷ 12 = $600/month.
• Special assessment (equal): $200,000 ÷ 100 units = $2,000 per unit (e.g., 4×$500).

Q: How do I estimate my share if units aren’t equal? A: Use your recorded percentage interest from the declaration. Multiply by the total.

Key numbers

• Grace period: 10–15 days (varies by docs/state).
• Late fee: $15–$50 or ~10% (check caps).
• Interest on delinquency: up to ~18% APR (caps vary).
• Reserve contribution: 15–40% of the total budget.
• Notice window: often 14–30 days before adoption/billing.

Q: Are these numbers universal? A: No. They’re typical ranges. Your documents and state law control.

HowTo: Stay compliant when setting dues

1. Gather year-to-date actuals and your reserve study.
2. Re-bid big vendors; model inflation and bad-debt.
3. Draft the budget and allocation method with notes.
4. Send owner notice with a simple “what changed” summary.
5. Hold an open meeting; adopt and minute the vote.
6. Load the amounts in RunHOA Accounting and enable e-billing.

HowTo: Handle a special assessment

1. Define the need, scope, and total cost with photos or bids.
2. Confirm approvals required (docs + state caps).
3. Offer lump sum and installment options; include dates.
4. Publish FAQs and a calendar; collect feedback.
5. Vote if required; issue invoices and track receipts.
6. Report progress monthly until the project closes.

FAQ

Q: What is a capital contribution? A: A one-time fee at purchase that seeds working capital or reserves.

Q: Can I see the aging report? A: Owners often have records rights. Expect summaries with private data redacted.

Q: Can we adopt dues without a meeting? A: Many states require open meetings; check your bylaws and statute.

RunHOA tools

• Collect dues online (one-time payments) — fewer late fees and clearer receipts.
• Build budgets, track reserves, and post assessments — all in one place.
• Send notices and run secure owner votes — stay compliant and transparent.

References

• CFPB — Debt collection resources
• Nolo — Understanding HOAs
• Community Associations Institute (CAI)
• California Civil Code §5605 (assessment limits)
• Arizona A.R.S. §33-1807 (assessment lien; foreclosure threshold)
• Florida Statutes — §720.30851 (estoppel certificates)
• Texas Property Code, Chapter 209 (open meetings, plans, foreclosure)