Scott Ford
President, California Builder Services
You pay your HOA dues every month. Then the association tells you it needs a special assessment to replace the roof. Your first question is probably: Where did all the money go?
Some paid the insurance. Some paid the utilities. Some paid for routine maintenance. But paying those bills and saving enough to replace the roof are two different jobs.
As we head into 2027, the vast majority of associations I’m seeing through California Builder Services did not increase reserve funding in 2026, and are continuing to not increase them for 2027. I’m also seeing associations beginning to have cash-flow problems.
That puts two questions in front of your board. Can the association pay today’s bills? And is it putting enough aside for the work that’s coming?
You need an answer to both before you can decide whether the monthly assessment is enough.
Why aren’t the monthly dues enough to pay for the roof?
Monthly dues can pay for the roof, but only if the budget sets aside enough money for it. Paying the amount on your monthly statement doesn’t tell you whether that amount covers the association’s actual needs.
Think about your roof. Routine maintenance is an ongoing expense in the operating budget. Replacement is a major expense you plan for through reserves. You can keep up with the maintenance and still reach replacement time without enough money saved.
An association can pay every operating bill on time and still fall behind on reserves. It can also have trouble paying those bills because its operating expenses have outgrown its income. Money available for one purpose doesn’t settle the question about the other.
Insurance, utilities and shared-building maintenance all compete for room in the budget. We’ve seen those pressures in our budgeting work. California’s Department of Insurance identified insurance access and affordability problems affecting HOAs in its March 2025 FAIR Plan announcement.[1]
If those bills take more money and the monthly assessment stays the same, there’s less room to increase reserve contributions. The current bills still have to be paid. The roof still has to be replaced.
Keeping dues flat may feel like keeping ownership affordable. But it doesn’t keep the insurance bill flat. It doesn’t keep maintenance costs flat. And it doesn’t stop the building from getting older.
Doesn’t slower inflation mean the repair will cost less?
No. Slower inflation means prices are rising more slowly. It doesn’t undo the price increases that have accumulated since COVID.
Suppose headline inflation is 3%. That doesn’t tell you what a contractor will charge to replace your roof. The Consumer Price Index measures changes in a basket of consumer goods and services, not the price of your building’s repair project.[2]
The contractor needs materials. The contractor also needs skilled people available to do the work in your area. A shortage in a particular trade can affect both the price and the schedule. Materials and supplies are only part of the cost.
We recommend getting current replacement estimates and appropriate bids for approaching work. Applying a headline inflation number to an old estimate isn’t the same as finding out what the job will cost.
Now look at the time you have left. If the roof replacement gets closer, the estimated cost rises and contributions stay unchanged, the funding gap can grow. Owners may have paid every monthly bill, but the association still hasn’t put enough aside.
The building keeps aging. The work keeps getting closer. Years without adequate increases can leave a community underfunded and physically outdated at the same time.
Isn’t a condo supposed to cost less to own?
A lower purchase price can make a condo easier to buy. It doesn’t necessarily make it less expensive to own. You need to look at what the assessment covers and what you’ll pay separately.
Many condominium owners pay for shared building maintenance through their HOA assessments. That is part of the cost of owning the home, even when it arrives as a monthly payment instead of a contractor’s bill.
Be fair about the comparison. A single-family homeowner still pays for repairs and replacements, often directly. Some planned-development associations maintain buildings too. Those costs don’t disappear just because they aren’t collected through a condo assessment.
Your association’s responsibilities depend on the property and its declaration. Know which repairs belong to the association and which belong to you before comparing the costs.
Look beyond the purchase price and the monthly payment. What major work is coming? How much has the association set aside? What repairs will you need to pay for yourself?
That is a more useful ownership-cost comparison than treating the HOA assessment as a cost other homeowners never face.
What should your board review before setting the 2027 budget?
We strongly recommend reviewing actual operating costs and the reserve plan together before deciding what owners need to contribute. Start with what you have to pay now. Then look at what you’ll need to pay later.
For the operating budget, use the association’s actual insurance commitments, utility expenses, service costs and maintenance responsibilities. If income isn’t keeping up, show the gap directly. Don’t build the operating budget around using reserve money to pay routine bills.
For reserves, start with the building you have today. What condition are the major components in? Does the remaining useful life reflect that condition? What will the work cost, and when will it need to happen?
Then compare the planned contributions with the repair schedule and forecast reserve balances. If the roof is expected to need replacement before enough money has accumulated, the plan needs attention. Having a reserve study on file isn’t the same as funding the work.
A special assessment may be one way to address a funding gap. It isn’t inevitable, and regular increases can’t eliminate every unexpected expense. But discussing the cost while you still have time to plan is better than waiting until the work is urgent.
At California Builder Services, we work on hundreds of HOA budgets and reserve studies. We can help you look at current expenses, upcoming replacements and planned contributions together.
Use current costs. Use realistic timing. Match the contributions to the work ahead.
Contact California Builder Services to discuss your HOA budget and reserve study.
Frequently asked questions
Does a special assessment mean the board did something wrong?
No. Look at why the money is needed and the association’s circumstances. A funding gap needs examination, not an automatic accusation.
Does a current reserve study mean the repairs are funded?
No. Compare the study’s cost estimates and repair schedule with the money available and the contributions actually being made.
What should homeowners ask about the next budget?
Ask what changed in current expenses, what major work is approaching and whether planned contributions match that work. The monthly payment is only part of the picture.
This article provides general budgeting information, not legal advice.
Official References and Primary Sources
- California Department of Insurance, March 28, 2025 FAIR Plan announcement. Insurance access and affordability concerns affecting HOAs. https://www.insurance.ca.gov/0400-news/0100-press-releases/2025/release028-2025.cfm
- U.S. Bureau of Labor Statistics, Consumer Price Index overview. Consumer-basket definition. https://www.bls.gov/cpi/home.htm
