How Much Can a Vermont HOA Raise Dues?

A jump in HOA dues can land like a surprise tax — and the first question owners ask is whether the board can really do that. In Vermont, the answer runs through the Vermont Common Interest Ownership Act (VCIOA), Title 27A, and the association's own declaration and bylaws. This is general information, not legal advice — for how it applies to your specific situation, a licensed Vermont attorney is the right resource.

Dues come from the budget

Common-expense assessments — what most people call dues — are how the association funds its budget. Under § 3-115, assessments for common expenses are levied based on the budget the association adopts. So a dues increase is really a budget decision, and the budget is where an owner's attention usually belongs.

Is there a cap on HOA dues increases in Vermont?

Generally, no flat percentage cap. The Vermont Common Interest Ownership Act relies on process instead: under 27A V.S.A. § 3-123(a), the board's proposed budget is ratified unless a majority of all unit owners, or a larger number set by the declaration, reject it. For older communities, whether § 3-123 applies can turn on § 1-201(a).

Vermont's statute does not impose a simple "dues can't rise more than X% a year" cap. The controls are procedural and structural:

• The increase has to flow from a properly adopted budget. Under § 3-123(a), the board adopts a proposed budget, gives owners a summary "including any reserves," and sets an owners' meeting to consider ratification; "Unless at that meeting a majority of all unit owners or any larger number specified in the declaration reject the budget, the budget is ratified, whether or not a quorum is present."
• Board meetings are, under § 3-108, generally open to owners with at least 10 days' notice and an agenda.
• The declaration and bylaws may add their own requirements — for instance, a ceiling on increases without a member vote.

In other words, the real limits often live in your governing documents, layered on top of the statute's process requirements.

Section 3-123 and the open-board-meeting rules in § 3-108(b) were added by 2009, No. 155 (Adj. Sess.), effective January 1, 2012. Section 1-201(a) provides that "Amendments to this title apply to all common interest communities that contain 12 or more units that may be used for residential purposes and are created after January 1, 2011, or are subject to this title by amendment of their declaration," so for an older community, which of these provisions applies can be a question worth putting to an attorney.

Where owners commonly look

When dues rise, owners frequently examine:

• The adopted budget — what is the money actually for? Operating costs, or a reserve shortfall?
• The declaration and bylaws — do they require a member vote or ratification above a certain increase?
• The meeting notice — was the budget adopted at a properly noticed, open meeting under § 3-108?
• The reserve study — large increases are sometimes driven by underfunded reserves, which the records can show.

A records request under § 3-118 can reach the budget, reserve study, and the minutes of the meeting where the increase was approved.

Can a Vermont HOA levy a special assessment on its own?

Generally, only if owners don't reject it. Under 27A V.S.A. § 3-123(b), a board-proposed special assessment is effective only if the board follows the budget-ratification procedures and owners do not reject it. Under § 3-123(c), a two-thirds board vote that it's needed for an emergency makes it effective immediately, with prompt notice to owners.

Beyond regular dues, associations sometimes levy a one-time special assessment for a major expense. Under § 3-123(b), a special assessment the board proposes "is effective only if the executive board follows the procedures for ratification of a budget" and the owners do not reject it. The exception is § 3-123(c): if the board "determines by a two-thirds vote that a special assessment is necessary to respond to an emergency," the assessment takes effect immediately, notice "must be provided promptly to all unit owners," and the funds may be spent only for the purposes described in the vote. The declaration may add heightened requirements, so the same questions about notice, authority, and owner approval apply.

When an increase seems improper

If an owner believes dues were raised without the process the statute or governing documents require, the options include requesting the budget and meeting records, raising the issue with the board in writing, and consulting a licensed Vermont attorney about whether § 3-115, § 3-123, § 3-108, or the declaration were followed.

Sources

• 27A V.S.A. § 3-115 — Assessments for common expenses
• 27A V.S.A. § 3-123 — Adoption of budgets; special assessments
• 27A V.S.A. § 3-108 — Meetings
• 27A V.S.A. § 3-118 — Association records
• 27A V.S.A. § 1-201 — New common interest communities