Homeowner association dues (assessments) pay for the day-to-day expenses of the association such as water, power, sewer, etc. They also pay for transfers to the reserve account. The reserve account is funded on a 30-year plan provided by a licensed reserve study specialist. Reserves pay for maintenance and replacement of major components in common area such as streets, sidewalks, street signs, roofs, and paint. Common areas will vary for each Association.

The assessments are determined by the board of directors approving a budget in the open meeting and ratified by the homeowners in the budget ratification meeting. The budget is generally drafted by management and is based on historical, projected, and published information such as the following year’s forecasted information in the reserve study or a projected increase published by the water district, gas company or energy provider.

If you want to know what your assessments pay for, login to your association website and find the budgets in the association’s documents. You may also contact management to obtain a copy of the approved budget.

The budget will list all income such as assessments and interest from investments, all expenses such as maintenance and utilities, and projected reserve transfers. It may even list future projects that may be planned by the board.

Assessments are collectable by your association as it is not for profit. Not paying dues could result in deferred maintenance in the community so they must be collected. If you have any questions regarding collections, see the article, “What do I do if I receive collection notice and what is the process?”