Ask the HOA Expert: Prepaying HOA Fees

Written by Posted On Tuesday, 01 May 2018 13:29

Question: Can the HOA offer discounts to those who prepay their HOA fees or special assessments?

Answer: The HOA should not offer discounts since the budget requires payment of full fees to fund it and offering discounts would create budget shortfalls. It is appropriate, however, to charge late fees to those that pay late. The budget should not anticipate extra revenue through late fees although there will likely be some. By the same token, there could be a shortfall in revenues if collections are not successful or take a long time to collect.

Question: Is it permissable for individual condo unit owners to pay for their own roof replacement?

Answer: Condo owners typically don't own their roofs unless the condos are stand alone units. Virtually all common wall condo roofs belong to the HOA. As such, roof repairs should only be paid for by the HOA according to a prescribed schedule. While lack of funds may force doing only a portion of the condo roofs, for example two of five buildings, doing the roof over one condo makes little sense since the same unit owner is responsible for a share of the repairs of all unit roofs.

Question: Our HOA is billed in bulk for electricity. Each unit has a submeter which is read monthly and billed to each unit owner. Subtracting the total unit usage from the bill leaves the total usage for the common areas. Currently, we are adding 3 cents per kilowatt hour to each owner's bill to pay for the common area cost. So, owners who use more electricity pay for a larger percentage of the common area electricity. All other HOA costs are shared equally. Are we doing this correctly?

Answer: If HOA costs are shared equally, this applies to common area electricity. The board has no authority to do otherwise. To correct this, an accounting of common area electricity charged to units should be done and credits or charges processed as appropriate.

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