Every time I hear a board member tell me; “Our Association has not increased its fees in xx number of years” it makes me cringe inside. Any Association not making small increases to its maintenance fees at least every couple of years is either setting up for a problem in the future or making some deductions somewhere else. I cannot tell you how many times I have seen Associations that have not increased fees in many years, dig themselves in a hole and then institute a large increase and/or a special assessment to dig themselves out of it.
We all know prices increase every year. Compare the cost of a gallon of milk today to 5 years ago. Accordingly, the cost of services provided to the Association will increase as well. Yes, it may be possible to search for a cheaper vendor but I’m sure you have heard old the old saying “Cheapest is not always best”. That said, I am not advocating for Boards to not negotiate prices or get multiple proposals to evaluate their options but whichever professional/service provider they select, that entity will want to increase their prices over time. If not, then they are cutting corners somewhere else.
Another area that an Association may be pulling back on to keep the same maintenance fees every year is the funding of the reserves. As mentioned above since prices increase every year so does the cost of major repairs and replacements. What it costs to replace the roof of a building today will most likely not be the cost to replace it 10 years for now. Therefore, the Association needs to make sure that it is funding the reserves adequately to ensure when the roof does need to be replaced there are enough funds to do that. How does the Association manage to do that? By having the reserve study updated on a regular basis and funding in accordance with the study. That last part is crucial. If the Association is not funding per the study that shortfall will eventually come back to bite the members.
So, if your Association’s fees are going up slightly every year, be thankful. Thankful that you have a vigilant Board, thankful that you may not see a large increase down the road, and thankful that the Board is probably funding the reserves adequately.
