Financial Oversight · Governance

Understanding HOA Assessment Authority: Who Can Raise Dues and By How Much?

Owners ask this question more than any other. The honest answer takes longer than “the board can do whatever it wants” or “owners have to vote on everything” — and either of those answers, given by a director, is a fast path to a lawsuit.

The Bottom Line

Assessment authority — the power to charge owners money — flows from a specific stack of documents and statutes, in this order: the recorded declaration, the bylaws, the applicable state statute, and the board’s fiduciary duties. The board cannot exceed the authority granted in those documents, but within that authority, the board has substantial discretion to set regular assessments through the annual budget. Special assessments and large assessment increases often trigger additional procedural requirements — sometimes a member vote, sometimes a notice-and-objection process, sometimes both. Texas and Florida differ in important ways, and condominium rules differ meaningfully from HOA rules even within the same state. The board’s job is to know exactly which rules apply to its community and to follow them precisely.

Operational Context: Where Assessment Authority Comes From

Every community association is created by a recorded declaration — sometimes called the CC&Rs (covenants, conditions, and restrictions), the master deed, or the declaration of condominium. The declaration is, in effect, the constitution of the community. It creates the association, defines what is common-area and what is private, and grants the association the power to charge owners for the cost of maintaining the common interest. Every dollar the association ever collects ultimately traces back to that grant of authority.

Within the declaration, the assessment provisions typically address four distinct things: (1) the purpose for which assessments may be levied (operating expenses, reserves, capital improvements, special purposes); (2) who has authority to set the assessment (usually the board, sometimes with member ratification); (3) any limits on the amount or the rate of increase; and (4) any procedural requirements (notice, hearings, voting thresholds, developer approval during the declarant control period).

The bylaws and the state statute layer on top of the declaration. Bylaws typically govern the procedural side — budget preparation timelines, meeting notice, member ratification requirements. The statute supplies default rules where the declaration is silent and, in some cases, imposes mandatory rules the declaration cannot override.

Regular Assessments: The Annual Budget Lever

Regular assessments are the recurring contributions that fund the association’s annual operating budget and (in most well-run communities) its reserve contributions. They are typically collected monthly or quarterly and adjusted once a year through the board’s budget adoption process.

In most associations, the board has the authority to set regular assessments — not to be confused with the authority to create the assessment in the first place. The declaration creates the assessment; the board sizes it. The sizing process usually looks like this:

1. Management or the treasurer prepares a draft annual budget covering operating and reserve contributions.
2. The board reviews the draft in one or more open board meetings (in Texas, those meetings must be open under Property Code § 209.0051).
3. The board adopts the budget and the associated assessment, sometimes by a simple majority and sometimes by a higher threshold per the bylaws.
4. Notice of the new assessment is sent to owners per the declaration, bylaws, and statute — usually 30 to 60 days before the new fiscal year begins.

Most state statutes do not impose a numerical cap on regular assessment increases. Texas Property Code Chapter 209, the principal HOA statute, contains no statewide ceiling on year-over-year increases for residential subdivisions; the limit, if any, comes from the declaration itself. Florida is similar for HOAs under Chapter 720, but Florida condominium associations operate under a specific procedural threshold described below.

The Florida 115% Threshold: A Notice Mechanism, Not a Cap

Florida condominium associations operate under a uniquely visible rule: when the board adopts an annual budget that would require regular assessments to exceed 115% of the prior fiscal year’s assessments (excluding reasonable reserves, anticipated expenses not customarily incurred annually, and assessments for betterments), members holding at least 10% of voting interests may, within 21 days of budget adoption, submit a written request for a special meeting to consider a substitute budget. The special meeting must be held within 60 days of budget adoption, and a majority vote of all voting interests is required to adopt the substitute budget.

This 115% threshold is widely misunderstood. It is not a cap on what the board can do; it is a notice-and-objection mechanism that gives members a structured opportunity to push back. The board still has the authority to adopt a budget that exceeds 115% — but doing so opens a defined window during which members can attempt to substitute their own budget.

Florida homeowner associations under Chapter 720 do not have an equivalent 115% mechanism by statute. Their assessment limits come from the declaration. Developer-controlled boards in Florida condominiums face a more restrictive version of this rule: during developer control, regular assessments cannot exceed 115% of the prior year without approval by a majority of voting interests.

Special Assessments: A Different Authority Question

Special assessments are one-time charges levied to fund a specific purpose — typically a capital project, a reserve shortfall, a major repair, or an unbudgeted operating event such as an insurance deductible after a casualty loss. Because they fall outside the annual budget cycle, they typically carry stricter procedural requirements than regular assessments.

The most common requirements are:

• A specified purpose. The board must adopt the special assessment for an identified purpose, and the funds must be used for that purpose. Spending special-assessment funds on unrelated needs is a fiduciary problem and, in some states, a statutory violation.
• Member approval for large special assessments. Most declarations require a member vote for special assessments above a stated threshold — commonly a percentage of the annual budget. Voting thresholds vary; majority and two-thirds approval are both common.
• Heightened notice. Special assessment notices often require additional information — the purpose, the total amount, the per-unit allocation, the payment schedule, and the consequences of nonpayment.
• In Florida condominiums, additional procedural requirements for special assessments, including specific notice content under § 718.116(10) and any limits in the declaration on the board’s authority to levy them without member approval.

How the Authority Stack Resolves Conflicts

When provisions conflict, the controlling order is generally: statute (where mandatory) → declaration → bylaws → board policies. A board policy cannot create assessment authority the declaration didn’t grant. The declaration cannot override a mandatory statutory rule (such as open-meeting requirements or, in Florida condominiums, the 115% special-meeting procedure).

Why This Matters

Wrongful assessment claims are among the most common lawsuits associations face. A board that increases assessments without authority, fails to follow notice procedures, or levies a special assessment outside its declaration limits invites litigation that can take years to resolve and can result in invalidation of the assessment, reimbursement of paid amounts, and personal exposure for the directors.

Assessment increases drive collection patterns. A large or poorly explained increase produces a predictable spike in delinquencies. The board that announces a 22% increase in a one-line notice without context creates a collection problem before the new fiscal year even begins. The board that explains the increase, ties it to specific operating cost changes, and offers a payment plan to affected owners collects significantly more of what it bills.

Authority disputes erode trust faster than the underlying numbers do. Owners can absorb a difficult assessment increase if they believe the board followed the rules. They cannot absorb the perception that the rules were ignored. The procedural integrity of the increase often matters more than the dollar amount.

The legal landscape continues to evolve. Florida’s post-Surfside reforms (SB 4-D in 2022, HB 913 in 2025) have tightened the rules around reserve funding and effectively eliminated the longstanding practice of voting to waive reserves for SIRS components in qualifying condominium buildings. Boards relying on pre-2022 assumptions about what reserves can be reduced or waived are operating on outdated information.

Best-Practice Guidance

1. Inventory your assessment authority before each budget cycle.

The treasurer (or counsel during the first year of a new declaration) should produce a one-page summary of the assessment authority: what the declaration grants the board, what limits apply, what triggers a member vote, what statutory notice is required, and what dates anchor the budget calendar.

2. Build assessment increases into a multi-year plan.

One-time large increases generate more conflict than steady, predictable adjustments. A board that adopts a three-to-five-year assessment glide path tied to its reserve study and operating projections gives owners the predictability they need and gives itself the political room to make necessary adjustments.

3. Document the rationale.

The board’s minutes should record the operating cost drivers behind the increase: insurance renewal premium changes, contractor pricing, reserve study recommendations, utility cost increases. A minute book that shows deliberation is the single best defense to an authority challenge.

4. Communicate the increase before it appears on the bill.

The best practice is a written communication that arrives 60–90 days before the new assessment takes effect, explains the change in plain language, ties it to specific budget items, and identifies any payment plan or hardship options. This is a service-first communication, not a legal notice.

5. Follow the state-specific procedural rules to the letter.

In Texas, the assessment-related board meeting must be open under § 209.0051; required notice periods (144 hours for regular meetings, 72 hours for special meetings) must be observed. In Florida condominiums, the 115% threshold may trigger a special meeting; bylaws may require notice content beyond the statutory minimum. Procedural defects can invalidate the assessment.

6. Reserve special assessments for actual special purposes.

Using a special assessment to fix a recurring operating shortfall is a sign that regular assessments are too low. Using a special assessment to fund a one-time capital project, an insurance deductible, or a casualty loss is appropriate. The distinction matters legally and operationally.

Common Mistakes & Pitfalls

Actionable Takeaways

1. Locate the assessment article in the declaration. Read it. Confirm that the board’s upcoming budget is consistent with the authority granted.
2. Identify any declaration cap on annual assessment increases.
3. For Florida condominiums, confirm whether the proposed assessment increase exceeds 115% of the prior year (excluding reserves, non-recurring expenses, and betterments) — and prepare for the special-meeting process if it does.
4. Confirm board meeting notice complies with state statute (e.g., 144/72 hours in Texas).
5. Draft a one-page owner communication explaining the increase, the drivers, and any payment options.
6. Record the rationale for the increase in the meeting minutes.
7. If a special assessment is contemplated, confirm the declaration’s vote-threshold requirement before the board votes.
8. For multi-year cost pressure, build a three-to-five-year assessment plan tied to the reserve study and operating projections.

Related CIC-SC Resources

• Operating Fund vs. Reserve Fund — The Critical Distinction
• Reserve Funding Methods — Fully Funded, Threshold, and Percent Funded
• Responding to a Mid-Year Financial Shortfall
• Special Assessment Notice Template
• How to Read and Interpret Your Declaration
• Texas Open Meetings Requirements Under § 209.0051 — Complete Board Guide
• Florida Chapter 718 — Condominium Act Overview for Board Members

References & Sources

1. Common Interest Community Standards Council, Fundamentals of Association Management — chapter on Assessment Authority and the Annual Budget Process.
2. Texas Property Code Chapter 209 — Texas Residential Property Owners Protection Act, including § 209.0051 (open board meetings), § 209.0052 (procurement and contract considerations), and the broader framework governing assessments and notices.
3. Texas Property Code Chapter 82 — Texas Uniform Condominium Act, including condominium-specific assessment provisions.
4. Florida Statutes § 718.112(2)(e) — Annual budget adoption, member objection process, and the 115% threshold for condominium associations.
5. Florida Statutes § 718.115 — Common expenses and assessment allocation.
6. Florida Statutes § 718.116 — Assessments, liabilities for nonpayment, and special-assessment notice content.
7. Florida Statutes Chapter 720, including § 720.303 (powers and duties) and § 720.308 (assessments and charges), governing HOAs.
8. Florida HB 913 (2025) — Amendments affecting reserve funding, assessment-related disclosures, and budget procedures for condominium and cooperative associations; effective July 1, 2025.
9. AICPA, Audit and Accounting Guide: Common Interest Realty Associations — presentation of assessments, member equity, and special assessments.

Tags: assessment authority · regular assessment · special assessment · annual budget · declaration · 115% threshold · Florida Chapter 718 · Texas Chapter 209 · fiduciary duty

CICSC publishes this article for educational and informational purposes only. It is not legal, tax, accounting, engineering, insurance, or financial advice and does not establish an attorney-client relationship. Statutory references and operational frameworks are intended to support informed governance, not to substitute for advice from qualified legal counsel and other professional advisors familiar with your jurisdiction and your association's facts. CICSC, its authors, and its members assume no liability for actions taken in reliance on this content.