January 2025 CT

Top Strategies for Managing HOMEOWNERS ASSOCIATION FEES Effectively By Nick Schiera, CMCA, Schiera Property Management LLC DBA PMI Turnkey NJ

“HOA boards must regularly review spending to ensure it aligns with the budget.”

M anaging Homeowners Association (HOA) fees is critical to the financial health of any commu nity. Unexpected fee hikes can catch homeown ers off guard and strain household budgets. Homeowners rely on their HOA boards to budget well and use fees effectively. Mismanagement can lead to finan cial instability, higher fees, and unhappy residents. Keep reading for easy strategies to help boards manage HOA fees and maintain financial stability in their communities. Build a Strong HOA Budget Start with a solid budget to cover all community expenses without surprises. Include both fixed costs, like landscaping and utilities, and variable costs, such as unexpected repairs. Planning for long-term projects also helps avoid sudden fee increases. Set Appropriate HOA Fees Establishing the right HOA fees is key to long-term finan cial health. Undercharging leads to budget gaps while overcharging strains homeowners. Review past financial

records and consult experts to determine a fair and sustain able fee amount. Adjust yearly but avoid sharp increases. Track Spending HOA boards must regularly review spending to ensure it aligns with the budget. Financial reports help spot over spending or opportunities for savings. Keeping expenses in check can reduce HOA fees, benefiting everyone in the community. Build Reserve Funds Unexpected expenses, like roof repairs or plumbing issues, can happen anytime. Divide part of the budget toward reserves to protect the community against financial stress. Collect HOA Fees Ensure steady cash flow by consistently collecting fees. Have clear policies for late payments and offer different payment methods, such as: • Online portals • Automatic deductions CONTINUES ON PAGE 48

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JANUARY 2025