How much can an HOA raise dues in California? Your essential guide.

HOAs in California have the ability to increase dues without member approval, but the increase is capped at 20%. While this may seem like a significant increase, it’s important to note that major fee increases, especially if they come as a surprise, can lead to frustration and distrust from members. Here are a few points to consider regarding HOA dues in California:
  • HOA boards are required to provide written notice of any proposed fee increases to all members at least 30 days before they go into effect. This gives members an opportunity to address any concerns they have with the increase before it takes effect.
  • If an HOA board proposes an increase that exceeds the 20% threshold, they are required to obtain approval from members in a vote.
  • Dues are typically used for maintenance and upkeep of the common areas of the community, including landscaping, building repairs, and amenities like swimming pools and clubhouses.
  • Members may have the ability to vote on items related to the budget, including increasing or decreasing dues. For example, if an HOA board proposes a significant project that requires additional funds, members may be asked to vote on whether or not to approve the expense and the resulting fee increase.
  • Ultimately, HOA boards are responsible for ensuring the financial stability of the community, which can sometimes mean adjusting dues. However, it’s important to communicate any proposed changes with members and take their concerns into consideration in order to maintain a positive relationship between the HOA board and the community.
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    Understanding HOA Dues in California

    Homeowners associations or HOAs are common in California as they help maintain the appearance and standard of residential communities. HOAs are responsible for the upkeep of amenities, landscaping, and other communal areas. Each member pays dues to cover the cost of these services as well as for the management and administrative expenses of the HOA. Dues collected from the members are also used for the repairs and maintenance of the common area infrastructure.

    How HOA Dues are Regulated

    In the state of California, HOAs are regulated under the Davis-Stirling Act, which outlines the rules and regulations governing homeowners’ associations. The act provides a set of rules that HOAs must follow to ensure that they manage the community fairly and transparently. HOAs are also required to have their bylaws and CC&Rs or covenants, conditions, and restrictions, which outline the rules and regulations of the community, reviewed by a lawyer.

    HOA Dues Increase Cap in California

    California Civil Code Section 5605 outlines the maximum limit for HOA dues increase without obtaining the approval of members. The code allows HOA boards to increase dues up to 20% without seeking approval from the members. However, if the HOA wants to increase the dues by more than 20%, they must give notice of the increase to members and provide them with an opportunity to vote on the increase.

    When Can HOA Dues be Increased?

    HOA dues are used to fund maintenance activities, repairs, and other expenses that arise in a community. As such, dues may increase for various reasons. Some reasons include inflation, rising costs of maintenance, or significant repairs like repaving roads or major structural work in the community.
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    Impact of HOA Dues Increase on Members

    HOA dues increase can have a significant impact on the members. An unexpected increase can cause financial strain on homeowners, especially if they are living paycheck to paycheck. Moreover, some members may feel that the new dues are unreasonable and may resist paying the new dues, leading to conflict between the members and HOA board.

    Communication and Transparency in HOA Dues Increase

    The HOA should always be transparent with its members about why the increase is necessary and its expected impact. HOAs should communicate the increase several months in advance and provide clear information about why the increase is happening and where the money raised will go. This communication should not just be a short notice but a detailed explanation of the reasons that necessitate the increase in fees.

    Ways to Prepare for HOA Dues Increase

    To prevent surprises and prepare for HOA dues increase, members should review the HOA’s financial statements regularly, which will highlight any potential increases. Also, members should be familiar with their CC&Rs and bylaws and attend meetings and other community engagements organized by the HOA. This active participation can provide insight into the community’s financial management practices and enable members to have input regarding the increase of HOA dues. In conclusion, California’s Civil Code outlines the regulations that HOAs must follow when increasing dues. While HOAs are allowed to increase dues up to 20% without members’ approval, transparency and communication to community members are vital in ensuring that members are aware of the increase and why it is necessary. Homeowners should prepare for potential increases and be involved in the community’s activities to allow them to review the HOA’s financial statements and understand the reasons behind any potential increases. Through adherence to HOA rules and regulations outlined in the Davis-Stirling Act and CC&Rs, homeowners can coexist harmoniously and sustain their community.

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