Every board that faces a funding gap ends up at the same question. Do we bill owners once, or raise dues over time? Both raise the same money. They differ in who feels it, when, and how much risk the association carries.
This guide shows how a board can compare the two, what owners tend to react to, and how to present the choice at the annual meeting.
Start with the gap, not the tool
Pick the method after you know the size of the gap. A reserve study gives you that number. It lists each component, its remaining life, and its replacement cost. It then compares your reserve balance to what a fully funded reserve would hold today. See our guide to HOA percent funded for how that comparison works.
A board that skips this step argues about methods without knowing what it needs to raise. A study that is several years old understates the gap, because replacement costs have risen. Check your study's age first. Our guide on how often to update a reserve study covers when.
The three ways to close a gap
| Method | How it works | Main advantage | Main risk |
|---|---|---|---|
| Special assessment | One-time or short-term charge to every owner | The money arrives fast and carries no interest | Large bill; some owners cannot pay at once |
| Dues increase | Higher regular payments, often phased over several years | Small, predictable steps; builds the reserve before the need | Slow; money may not arrive before the project |
| Loan repaid through dues | Association borrows, then repays through a dues surcharge | Project proceeds now; owners pay a smaller monthly amount | Interest cost; lender terms; governing-document limits |
Most funding plans mix these. A board might raise dues to the level the study recommends and cover a near-term project with a loan.
A sample comparison
The numbers below are round and illustrative. They do not describe any real community. Assume 100 units and a $300,000 gap for a roof project three years out.
| Option (sample) | Cost to each owner | Association receives |
|---|---|---|
| Special assessment | $3,000 once | $300,000 up front |
| Dues increase over 3 years | About $83 more per month for 36 months | About $300,000 by the end of year three |
| Loan at an assumed 7% over 10 years | About $35 per month for 120 months | $300,000 up front, about $418,000 repaid in total |
Read the table this way. The assessment costs owners the least in total and hurts the most on day one. The dues increase spreads the cost but the money may arrive after the roof bid. The loan lets the work start now and costs about $118,000 more in interest and fees. The interest rate here is an assumption. A real loan quote will differ.
A good funding plan models each option with your actual numbers so the board can compare them side by side.
What owners react to
Owners rarely object to the math. They react to surprise and to fairness.
- Surprise. A $3,000 bill with 30 days' notice feels like a failure of planning. The same cost, announced a year ahead with a study behind it, feels like a decision.
- Ability to pay. Retirees and owners on fixed incomes can struggle with a lump sum. A monthly amount is easier to absorb. Ask your attorney whether your documents allow payment plans.
- Fairness across time. An owner who sells next year pays for a roof they never use. An owner who arrived last month gets a new roof for free. Dues increases spread that cost more evenly. Assessments fall on whoever owns the unit that day.
- Trust in the board. Owners accept increases when they see the invoices, the study, and the alternatives the board rejected.
What the governing documents decide
Your declaration and bylaws control how the board can raise money. They set limits on dues increases, on special assessments, and on borrowing, and they say when a member vote is required. Read those sections before you pick a method. Ask the association's attorney to confirm what the board can do alone and what needs a vote.
We do not summarize Georgia law here. The limits that apply depend on your documents and on whether your association is governed under the Georgia Property Owners' Association Act, the Georgia Condominium Act, or neither. Your attorney should answer that question.
How to present the choice at the annual meeting
- Open with the study. Show what the community owns, what is coming due, and what it costs. Owners need the problem before they hear a solution.
- Show what happens if nothing changes. Use the study's projection of the reserve balance year by year. Name the year it runs out.
- Present two or three options with the same measure. Use cost per unit per month and total cost for each. Do not show one option as a dollar figure and another as a percentage.
- Say what the board recommends and why. A board that shows the options and then declines to choose looks unsure.
- Leave room for questions. Plan time for them and write down what you cannot answer on the spot.
- Follow up in writing. Send the slides, the study summary, and the decision timeline to every owner.
Owners often hear the numbers differently from an independent source. Our reserve study service includes a presentation to your board and an optional presentation to your homeowners.
What happens after you choose
Raising the money is the first step. The work follows. When a project comes due, the board needs a clear scope, competing bids, and someone to check the work. Our guides on comparing contractor bids and verifying contractor work cover those steps.
This guide is general information, not legal or financial advice. Your governing documents and your association's attorney control how dues and assessments may be set, levied, and collected, and whether the association may borrow.