Why Are HOA and Condo Assessments Going Up?

Financial Planning

The Cost of Running a Community Keeps Climbing Insurance is the clearest example. National reporting has found that insurance premiums increased for the large majority of community associations surveyed between 2024 and early 2025, with a meaningful share of associations seeing increases of more than 100%. Repair and construction costs have climbed as well, and as communities age, common property — roofs, roads, siding, elevators, stormwater systems, pools — eventually needs significant repair or replacement regardless of what's budgeted. For condo associations specifically, reserve funding is facing more scrutiny than ever. Fannie Mae and Freddie Mac have moved toward expecting associations to allocate a meaningful share of annual assessment income — often cited around 15% — into reserves. These are lending standards, not state law, but they still matter: a condo project that doesn't meet applicable lending requirements can make it harder for owners to sell or refinance their units. Keeping Assessments Low Doesn't Make the Expenses Go Away Boards understandably want to keep dues affordable — they pay them too. But there's a real difference between controlling costs and keeping assessments artificially low. If an insurance premium doubles, a board vote doesn't bring it back down. If a roof needs replacing, waiting doesn't make it younger. Where an obligation exists, delaying the expense usually just means a larger bill — often in the form of a special assessment — later on. Associations Carry More Responsibility Than Many Owners Realize Modern communities often include substantial infrastructure that falls outside traditional local government maintenance — private streets, stormwater systems, landscaping, amenities, lighting, and shared utilities. Condo associations may also be on the hook for roofs, exterior walls, structural elements, elevators, and life-safety systems. Whoever bears that responsibility has to fund it — which is the basic purpose of mandatory assessments in the first place. What Happens When Owners Don't Pay Rising costs are only half the story. National data has also shown a sharp increase in HOA-related foreclosure filings as associations navigate both higher expenses and more owner delinquencies. When dues go unpaid, the association's own bills for insurance, utilities, landscaping, and management don't shrink to match — the shortfall is effectively absorbed by the rest of the community until it's collected. The Bigger Picture These pressures are increasingly landing on state legislatures' desks, with lawmakers in various states considering additional protections around assessments, collections, and foreclosure remedies. Those conversations matter — but they need to sit alongside a harder question: what happens if an association can't collect enough to meet the obligations it's legally required to fulfill? Restricting how associations raise or collect funds doesn't make the insurance bill, the roof replacement, or the stormwater repair disappear. The Takeaway Low assessments can feel like good news in the short term, but they aren't automatically evidence of sound financial management. The better question for any board to ask is whether the community is collecting enough to meet its current obligations — and realistically plan for what's coming next. The expenses themselves don't go away; the only real choice is when, and how predictably, they get paid.

Adapted from legal commentary by Jim Slaughter, Law Firm Carolinas. This post is for general informational purposes and is not legal advice.