When it comes to community and condominium associations, one of the hottest topics is assessments, often referred to as dues. After 25 years of managing associations, we’ve learned that when it comes to finances and payments, there is a lot of discussion and, many times, confusion.
To help understand what association assessments are, how they work, and why they matter, we’ve provided answers to the top five questions we get asked about association assessments.
- What is my assessment? The assessment is the periodic amount due from each property owner to cover the association’s operating expenses, to pay the cost to maintain, repair and replace common elements, and to provide for reserve funds for major repairs or replacement of common elements in future years. Your assessments are due on the first of the month, quarterly, semi-annually or annually, which is determined by the board of directors and in some cases is outlined in the governing documents. Statements or coupons books are typically sent for assessments as a reminder of the amount due.
- Who determined the assessment amount? The developer sets the assessment amount initially. It is the responsibility of the board of directors to annually determine the amount of assessments each member will pay during the next year. Unless otherwise specified in your governing documents, the board also determines how the dues will be paid – as one annual payment, semi-annually, quarterly or monthly.
- How do I pay my assessments? Various associations and communities will have different systems in place for collection of payments. Additionally, as we mentioned, billing can occur in a variety of schedules, such as monthly, quarterly, semi-annually or annually. It is important to know when your assessments must be paid. Late payments can cost you more as interest or fees are added.
An association management company, such as CAMS, can make collection and payment much easier for associations. Owners of properties in our communities have several options for paying assessments, including secure online payment with credit card and eCheck, automatic draft, automatic bill pay through your bank, and check. If your association is having a difficult time managing its assessments, consider enlisting the help of a management professional.
- What expenses are paid with assessments? The annual budget of the association states the expenses anticipated each year. Usually the expenses provide for items such as insurance, operations and maintenance of streetlights, stormwater ponds, common areas and entrances. The funds are not used to maintain any individual home sites or units.
- What happens if I don’t pay my assessment? The maintenance, management, utilities and other services incurred by the association are dependent on timely receipt of the assessments due from each property owner. Late payment will result in a late charge depending on your association's collection's policy, as assessments are due on the first of the month of your assessment cycle. In addition, the covenants, conditions and restrictions (or CC&Rs) generally allow the association to charge late fees and interest, and proceed with a lien on your property or in extreme cases, foreclosure for nonpayment of assessments.
At CAMS, our passion is helping associations of all sizes and types run efficiently and effectively for the good of the community. We encourage you to read our article on common property association terms
to get started, and hen contact us today about how we can work together to make the management of your association, including those assessments, easier.
Mike Stonestreet is a 26-year veteran of the professional HOA management industry who has achieved one of the highest education-based designations in the field, that of Professional Community Association Manager (PCAM). Community Association Management Services (CAMS) has been a leading association management company since its inception in 1991. CAMS is a trusted provider of management services for more than 265 associations throughout North Carolina, South Carolina and Georgia. To find out how CAMS can benefit your community, call (910) 256-2021, email [email protected], or visit www.CAMSmgt.com.