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Proposal would require HOA budgets, limit annual fee increases to 15% with exceptions
Summary
Rep. Terry Falk’s HB232 would require homeowner associations to provide annual budgets and profit-and-loss statements within 30 days of year-end and generally cap fee increases at 15% with procedures to exceed the cap by member vote; sponsors and witnesses debated exceptions for emergencies, small associations, and special assessments.
Representative Terry Falk (Kalispell) opened the House Judiciary hearing on HB232, which would require homeowners associations to present an annual budget to members within 30 days of the fiscal-year end, provide a profit-and-loss statement, and limit fee increases to 15% unless members approve a higher increase under prescribed voting rules.
Falk said the bill seeks to balance homeowners’ interest in predictable dues with associations’ need to fund roads, plowing and maintenance. The bill includes a provision requiring notification and a voting mechanism to exceed the 15% cap; Falk said staff drafted an amendment excluding associations of 10 units or fewer.
Proponents included Stephanie Baucus (attorney) and Chaney Oakert (homeowner). Oakert described a local example where dues rose precipitously without full participation from low-income full-time residents and said the bill would protect such residents from being priced out. Baucus suggested statutory exceptions for emergency spending, tax obligations, or court-ordered payments that require higher assessments.
Committee members pressed on practical trade-offs: several members said a strict 15% cap could prevent necessary repairs or emergency expenditures (e.g., elevator or boiler replacement) and noted that two-thirds thresholds for exceeding the cap may be hard to reach in practice. Members discussed alternatives — a percentage-or-dollar hybrid (15% or $X whichever is greater), lowering the supermajority requirement (three-fifths), or excluding small associations; Falk signaled openness to amendments.
The bill also raised questions about how special assessments interact with capped increases, how transparent profit-and-loss reporting should be (itemized vs. summary), and whether existing law (Uniform Common Interest Ownership Act and Unit Ownership Act) already mandates similar disclosures. Falk said he would consult staff and is open to revisions. No vote was taken; the committee closed the hearing.
