One of the most challenging experiences a board member faces is deciding when it’s necessary to assign a special assessment. Homeowners may not always immediately understand how critical it is to fix certain infrastructure issues. Additionally, if a natural disaster, such as a hurricane, were to hit your association, homeowners may themselves have homes in need of repair, potentially making an association’s repair seem trivial by comparison. If the board feels it needs to add certain amenities, such as a gate, pool, or park, to maintain or increase property values, convincing homeowners to agree to a special assessment may be particularly difficult.

As a rule, proper budgeting, reserve studies, proactive planning, and necessary regular assessment increases are all key to preventing a special assessment; however, it might not eliminate the need for one. Below are seven tips for “selling” special assessments to your homeowners in a way that will bring them onboard:

  • Focus on proactively creating an adequate reserve fund. While an association’s governing documents will almost always give board members the right to collect special assessments for various projects, ideally, association boards should only levy special assessments in emergency situations. If you are unsure whether your current reserve fund can meet the needs of future unexpected costs, consider completing a reserve study to give your board a reliable estimate of the community’s upcoming financial commitments. By doing everything possible to prevent a special assessment, you demonstrate to homeowners the efforts your board has taken to create financial stability for the HOA. This will help alleviate homeowner concerns regarding the necessity of a special assessment if one is needed.
  • Check the association’s governing documents to ensure the board understands requirements for special assessments. All associations have different rules regarding what boards must do to raise a special assessment. Some governing documents may only let you meet once to enact a special assessment, or will only let you call a special assessment for a certain fiscal year in the previous fiscal year (i.e., you would have to finalize a special assessment for 2019 in 2018). The rules can be complicated, and the last thing you want is to have your initiative sunk prematurely because the association rules were not followed.
  • Determine whether the board has authority to levy a special assessment on its own or if homeowner participation is required. The authority granted by the HOA will determine your entire strategy; if the board has the authority to levy a special assessment at will, then all you need to do is draft a letter explaining what the special assessment is for and why the board must levy a special assessment. If your governing documents require a homeowner vote, the letter explaining the necessity of a special assessment needs to be front-loaded in the process, and any other requirements (such as town hall meetings, etc.) must also be satisfied.
  • If your association’s governing documents require a homeowner vote, bring in experts during a town hall meeting to discuss the issue with homeowners. Selected vendors are typically willing to meet with homeowners to provide a more in-depth, technical explanation of why a project is necessary. You can also potentially use your reserve study to show the importance of a community initiative. If, for example, your reserve study says that your roads are at the end of their twenty-five-year life span, this will help explain to homeowners why the board is choosing to be proactive and fix the issue now, before it’s too late.
  • Remember to allot three to six months for your special assessment campaign. While the timeframe will vary case-by-case (how a board handles a $50,000 special assessment will be very different from how a board handles a $2.5 million-dollar special assessment), it’s good practice to earmark at least three months to familiarize homeowners with the special assessment and allow them time to prepare financially for the added cost to their budget.
  • Spread the cost of the special assessment over multiple payments. This can help alleviate the financial burden and, therefore, make homeowners more likely to vote in favor of the special assessment.
  • Understand the importance of transparency throughout the entire special assessment process. Level with your residents; show them the evidence for the necessity of the assessment, and trust them to come to the same conclusions you did about the state of the association. Homeowners will be able to tell if you’re engaging in acts or language designed to obscure the truth. Once you lose homeowner trust, it can be enormously difficult —if not impossible— to gain it back. On the other hand, building a relationship of trust and mutual benefit with homeowner members will increase their support of board projects—even those that call for special assessments.

While you can never persuade all homeowners to take your point of view, most owners choose to live in an HOA because they desire the property-value protection living in an association provides. When you focus on clearly communicating what improvements your association needs and why levying a special assessment is necessary to achieve those improvements, you can successfully reach most homeowners and protect the quality of the association for all.

For additional help with HOA management services, contact Spectrum Association Management today for a free, personalized quote.