Why are our reserve dues higher or lower than neighboring communities?
The reserve dues in your association have very little to do with other associations’ reserve dues. There are many factors that go into figuring out the current reserve dues. Some of the main differences for current reserve dues of competing communities may be:
- The date when the reserve fund was started. If one association delayed funding reserves for several years, this may be why the dues are higher.
- The strength of yearly funding (for example, fully funding reserves every year or only partially funding reserves). Associations that have not funded strongly in the past have more ground to make up.
- Community infrastructure–communities with more infrastructure will likely pay more as they have more (or larger) reserve items to fund, which would make their dues higher.
- How many years the community took to build-out. Communities that started and then stopped for a few years because of the recession may have a bigger deficit to fund, thereby increasing their dues.
Does self-managing our association save money?
I will not say definitively no, but I will say that it is not likely. You will likely get worse service because of a lack of experience of the people running the association since it is not their career. You also lose out on key professional community association contacts that a manager would have. In addition, it should be noted that a self-managed association may be a negative to a potential buyer of a home, in turn lessening the market value or appeal of the property.
What is so bad about special assessments? After all, that is how we have always done things in our association.
There are a number of reasons that special assessments are not a good way to run an association, but some of the main points are:
- They are unfair to everyone because some people pay too much, and some people pay too little (or nothing at all).
- People that move away get to avoid them completely, meaning they did not have to pay for anything during their time at the association.
- Special assessments are very hard to collect. Special assessments that become several thousand dollars could result in the residents taking out bank loans, or if loans are not possible then a foreclosure of the property.