Do HOA fees go up? What to know and how to avoid it

Homeowners association (HOA) fees are an essential part of community living, covering everything from routine maintenance to long-term infrastructure projects. If you’re a homeowner in Massachusetts, you might be wondering: do HOA fees go up every year? And if so, why do they increase, and what can you do to keep them manageable?

Understanding how HOA fees work, what drives increases, and how to prevent unnecessary hikes can help you plan for the future and advocate for cost-effective management in your community.
 

What are HOA fees?

Massachusetts HOA fees are mandatory dues that homeowners pay to maintain shared spaces, amenities, and essential services. These fees contribute to keeping the community running smoothly while protecting property values:

• Funding community services: Covering the costs of shared amenities and services, such as landscaping for common areas, general maintenance, trash removal, and snow plowing.
   
• Budgeting for operational costs: Operating expenses such as administrative work, insurance premiums, utilities for common spaces, and payments for vendors or staff.
   
• Contributing to reserve funds: Most associations maintain a reserve fund for major repairs and unexpected needs — think of large-scale roofing projects, elevator repairs, or siding replacements. Reserve funds are crucial because they help the HOA stay financially prepared for big-ticket expenses without imposing sudden hefty supplemental fees on homeowners.

An experienced property management company, like FirstService Residential, can make a difference. Our team helps associations budget effectively, negotiate vendor contracts, and avoid unnecessary fee increases.
 

Do HOA fees go up?

Yes, HOA fees do go up, and increases are often annual. But why do they keep rising? Several key factors influence HOA fee increases:

• Inflation and rising costs: HOA fees go up as the cost of materials, labor, and utilities rise. In Massachusetts, where the cost of living is currently 46% higher than the national average, HOAs must adjust their budgets to keep up with higher service costs.
   
• Maintenance and repairs: Regular upkeep of shared spaces is essential to prevent long-term damage. As communities age, maintenance expenses often rise, requiring higher fees to fund repairs and replacements.
   
• Reserve fund requirements: Massachusetts law requires condominium and HOA communities to maintain a reserve fund to cover major repairs and replacements. If the association is preparing for major repairs — such as fixing siding damaged by coastal weather or upgrading outdated HVAC systems — they may need to boost the reserve fund. Increasing fees helps them reach a target amount so that large projects can be financed without charging every homeowner a sudden lump sum.
   
• Insurance premium hikes: Insurance costs for common areas fluctuate based on market trends, claim history, and location. Many HOAs in Massachusetts have seen higher premiums due to increased extreme weather events, leading to fee adjustments.

  "We always begin with a review of the association’s current insurance program. We drive a competitive bidding process, through our internal insurance managers or coordinators. We do have exclusive relationships with some carriers and we leverage our relationship with those carriers to deliver better terms and conditions at a lower cost."
  
  Sean Kent, senior vice president at FirstService Financial, the financial services affiliate of FirstService Residential.

• Utilities and contracted services: Electricity, water, and maintenance contracts (such as landscaping or snow removal) fluctuate in price. In Massachusetts, where winters bring heavy snow, HOAs must budget for higher-than-average snow removal costs, which can impact fees.
   
• Supplemental fees and unexpected costs: If an unexpected cost arises, the HOA may need to raise fees or levy a supplemental fees. This can happen if a major structural issue arises, such as a roof failure or elevator replacement in a high-rise building.

How much can Massachusetts HOA fees go up in one year?

In Massachusetts, HOAs have discretion in setting and raising fees. Some communities have bylaws that cap increases, while others allow adjustments based on inflation and expenses. A common provision might say fees can rise only up to a certain percentage without a homeowner vote. If the HOA faces an urgent crisis, like major structural damage, boards may need to call for supplemental fees or a fee increase that goes beyond normal limits.
 

How to avoid increasing Massachusetts HOA fees

1. Participate in HOA meetings and budget planning

   HOA boards make financial decisions based on community input. Attending HOA board meetings and reviewing financial statements allows homeowners to ask questions, challenge unnecessary expenses, and suggest cost-saving measures.
    

2. Advocate for competitive vendor contracts

   HOAs often rely on third-party vendors for things like landscaping, security, and maintenance. If contracts aren’t regularly reviewed, the community may overpay for services. When a major contract is up for renewal, the board can solicit multiple bids to find cost-effective solutions without compromising quality. Some associations also choose to lock in multi-year contracts at a stable rate. If the vendor is reputable and the contract terms are favorable, locking in pricing can help reduce annual cost fluctuations, which might otherwise nudge fees upward.
   
   Sean Jordan, director of property management for FirstService Residential in Massachusetts, believes this process is crucial. “While reviewing two garbage removal contracts from the same vendor, I noted that fuel surcharges exceeded the base contract price for two communities that were recently added to my portfolio,” he explains. “We opened the contracts to bid and noted in the request for proposal that we wanted ‘no fuel surcharges for term of contract.’ After all the bids were reviewed and price confirmed, both boards selected a new vendor who delivered brand-new dumpsters and recycling bins and has saved them collectively $98,000 over a 3-year period. The money saved was reallocated to the following year’s budgets as contributions to reserves for upcoming capital improvement projects.”
    

3. Push for proactive maintenance

   Being proactive about regular maintenance is almost always cheaper than waiting for major failures. A robust preventative maintenance plan for critical infrastructure — such as roofs, balconies, and heating systems — can minimize large emergency repair bills.
    

4. Assess reserve fund health

   A reserve fund is a community savings account that serves as a cushion, protecting your association’s finances in the event of unexpected costs. A reserve study is a two-part professional assessment that examines the condition of community assets and provides forecasts for future needs. By following the study’s recommendations, the HOA can spread expenses out over several years, rather than imposing dramatic fee hikes in a single budget cycle.
    

5. Consider energy efficiency improvements

   How much energy does your association use in common areas? Are you using traditional lightbulbs? Are the lights kept on when no one is using a space? Is your pool or hot tub a few degrees too warm? Do your parking garage fans stay on when not needed? Are there areas of your community with excessive outdoor or landscape lighting?
   
   “I oversaw an energy efficiency lighting upgrade that was fully funded by a 1-year, no interest loan, rebates and reduced energy consumption costs,” says Jordan. “The project involved updating exterior lighting to LED and installing smart lights in the common areas and parking garages. About 75% percent of the project was covered by energy program rebates and the remainder was paid for in thirteen months by the energy savings. This location has saved, on average, $7,400 a year in consumption costs and while spending nothing on material or repairs for the last 5 years.”
    

6. Work with a professional property management company

   If you’re concerned about rising HOA fees or want to explore strategies for cost-effective community management, FirstService Residential can help. As North America’s leading property management company, we provide HOA budgeting expertise, vendor negotiations, reserve fund planning, and more. Contact us today.