Notice of a special assessment to residents is about as welcome as a notice from the IRS that they owe more taxes. While a few residents who have the extra funds will simply write a check, most all will expect detailed justification for the extra expense and some will object regardless of the proof the assessment is necessary. 

HOA boards need to adopt a winning strategy at the outset for how they’re going to approach homeowners. Boards who recently inherited property challenges from a prior, unpopular board can expect an extra hurdle in regaining residents’ trust. 

The HOA’s operating budget should be used to address regular maintenance and can even cover larger, recurring items not provided for in an HOA’s reserve study, such as painting, plumbing, and wood repair. Assessments should not be levied in lieu of proper budgeting and should only be used as a last resort to cover unanticipated expenses or capital or deferred maintenance items not provided for in the association’s reserves. 

A board should notify homeowners as early as possible once they identify a problem and advise them they are looking into solutions and costs. In initial communications with owners, refrain from using the term assessment until it’s needed, and only after the board determines funds actually need to be raised. 

There are a number of steps boards can take to make the assessment process less controversial. Boards also have options to mitigate the extra financial burden and make special accommodations for owners who would experience serious financial hardship from an assessment.

How to Proceed After a Board Decides an Assessment is Warranted

Once a board decides to proceed with an assessment, notify owners early to give them as much time as possible to become more comfortable with the idea. Often, boards act too quickly, thinking the faster they push it through that owners won’t have time to react and will simply pay up. This method rarely works as intended. ​Homeo​wners are more likely to be defensive and resistant if they feel they’re being blindsided.

Anticipate that there will be opposition to the proposal and get ahead of it by overpreparing your case.  Hold one or two pre-vote homeowner meetings before voting on the assessment to explain why the assessment is necessary and demonstrate that the board has researched all the available options. Having vendor experts at the meetings may help take some of the heat off the board and validate the board’s decision. Remember to share all information with off-site owners who often are not able to attend meetings.

Homeowners are more likely to be defensive and resistant if they feel they’re being blindsided.

  1. Respect residents’ time, money and intelligence. That said, a board should have as many meetings as are necessary to build and reinforce its case and provide homeowners with progress updates. 
  2. Be transparent. Share as much information as possible, with the exception of vendor contracts in the process of being negotiated.
  3. Drown them in data, then give them time to process it. When the board is ready to present its case, use illustration over explanation and fully document all the information necessary to support the need for an assessment, including: 
    Explaining how the damage occurred, what will be repaired or replaced, what will be outsourced vs. done in-house, what the cost will be, where the association is financially and why reserves won’t cover it. Explain the special assessment process and why the community needs it. Show how the expense has been calculated, how the result will improve residents’ enjoyment of the community and their property values, or prevent greater, long-term damage, and explain how the board will prevent this from happening again.
  4. Use expert professionals. They can help articulate the reasoning behind the assessment and answer owners’ questions. Explain why the project can’t wait and provide a detailed scope of work and associated costs with start and end dates, as well as anticipated challenges using comprehensive documentation and imagery. 
  5. Present creative financing options. Minimize the financial impact to owners as much as possible and have a plan for how you’re going to implement the assessment, how big will it be, and the types of payment plans you’re going to offer. 
  6. Budget for “uncollectible assessments.” Invariably, some residents won’t pay and the board will have to adjust budgeting.