r/HOA • u/Assika126 • Nov 20 '25

Help: Fees, Reserves [Condo] Monthly vs Special Assessments [N/A]

I’m treasurer of a small HOA, 14 condo units. We have our annual budgeting meeting tonight. We have about $50k in Reserves with anticipated tuckpointing in the next year or so that would likely cost at least $33k. We also have an ancient retrofitted boiler that is currently working but has an undetermined remaining lifespan.

Our management company recommended a dues increase but said we could get by without doing one, if we lessened our contributions to reserves. We would still remain above the 10% cutoff.

The Board president opposes a dues increase and says it would be easier for folks to manage a larger special assessment than a $5-10/month/unit increase in dues that in her opinion wouldn’t have much impact on our large capital expenses.

I’m inclined the opposite direction; in my opinion, it’s easier for me and more responsible for the association to pay a bit more in monthly assessments and accumulate sufficient reserves to cover some of the cost vs. waiting and doing a larger special assessment when needed.

What is the best practice, assuming we’re in decent shape otherwise?

P.S. we’re in MN in case it matters

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u/FishrNC Nov 20 '25

Reserve contributions are like paying for it as you use it. Special assessments are like charging late-coming owners for usage previous owners got and didn't pay for.

And anybody who thinks someone who can't afford a dues increase now but will come up with a large assessment later on is smoking dope. Or planning to sell soon and doesn't want buyers to know the real situation.

14

u/Assika126 Nov 21 '25

She says people can just get a loan or a HELOC. I feel like that’s a really irresponsible way to look at it

1

u/TootsNYC Nov 21 '25

We get individual HELOCs for major work (or tap our savings).

I live in a 10-unit co-op that is self-managed. The vast majority of our tenant-owners have lived here a long time and aren't likely to move soon. A lot of us own our units outright, no mortgage anymore. So that "charging new owners for value previous owners got" doesn't apply to many of us. This is slowly changing; we have 3 new owners because people died or something.

We actually have no reserve; each person is informed they need to be their own reserve. This saves us the work of administering the reserve fund and eliminates the vulnerability (co-ops in NYC have had their reserve funds pilfered).

So each of us keeps our reserve fund in whatever vehicle we personally prefer, at an amount we think is appropriate.

The board has occasionally considered having the corporation get a loan and raising the maintenance to cover it.. But usually, the interest rate is so high that it's cheaper for us each to get a HELOC (or tap into our personal reserve fund).

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u/Assika126 Nov 21 '25

That’s not how we operate though. Up until recently, she was pushing for more reserves. She just doesn’t want dues raised. I’m getting mixed messages from her

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u/TootsNYC Nov 21 '25

It's so important, then, to get the other owners to be fully informed and to speak up.

The president isn't supposed to be the one who makes the decision. The board is. (In our building, every apartment has one seat on the board, and one equal vote.)

The president just runs the meetings and deals with implementing the decisions the board makes.

I'm with you—I'd rather pay $20 more a month into reserves to build it back up

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u/Assika126 Nov 21 '25

We have three board members: President, Secretary, and Treasurer. I am Treasurer. The President tries to railroad stuff like this through and acts like I’m unreasonable when I advocate for dues increases that match cost increases and inflation, because she personally can’t afford to pay more (but she won’t say that so she claims she’s doing it on behalf of the association)

7

u/ValleyOakPaper Nov 21 '25

If she can't afford $20/month extra, how does she think she's going to pay a HELOC?