How much can an HOA raise fees? What the state caps actually say.

The short answer: most states don't cap it at all

There is no federal law limiting how much an HOA can raise regular assessments, and the majority of states impose no statutory percentage cap either — Texas, New York, Georgia, Illinois, and most others leave the increase limit entirely to what the association's own governing documents say. In those states, the real ceiling on a regular assessment increase is whatever cap, if any, the CC&Rs contain, plus the procedural requirement to give proper notice — typically 30 to 60 days — and board authorization.

The two states with an actual statutory cap

California and Arizona are the notable exceptions: both cap regular assessment increases at 20% per year without a membership vote. A board in either state proposing an increase above that threshold needs to go to the full membership for a vote rather than approving it by board resolution alone, regardless of what the CC&Rs say about board authority.

Florida's 115% figure — and why it's commonly misunderstood

Florida's often-cited 115% figure is widely misread as a hard percentage cap on fee increases; it isn't one for most established associations. It only functions as a genuine hard cap while the developer still controls the board. Once the association is owner-controlled, exceeding a 115% increase over the prior year's budget doesn't block the board — it gives owners the right to call a meeting and adopt a substitute budget instead. Reserve contributions, insurance premiums, and other non-recurring items are also excluded from the 115% calculation, which further limits how often the threshold actually gets triggered in practice.

Where the real limit usually lives

In the roughly forty-plus states with no statutory percentage cap, the CC&Rs are the only place a limit can exist at all. Many declarations cap annual increases somewhere in the 5% to 20% range without a membership vote, while older declarations — particularly ones drafted decades ago before increase caps became standard drafting practice — often contain no cap whatsoever, leaving the board's authority limited only by its fiduciary duty to set assessments that are reasonable and necessary rather than by any specific number.

Why "no legal cap" doesn't mean "no practical limit"

Even where no statute or CC&R caps the percentage, a board proposing a large increase in one year still faces real practical constraints: the business judgment rule protects reasoned decisions, not arbitrary ones, so a board that can't document the budget need behind a steep increase is exposed if challenged. A large, poorly explained increase also tends to provoke recall petitions or a rush of delinquencies, which can end up costing the association more in collections and legal fees than a smaller, better-communicated increase phased over two budget cycles.

Legislative movement worth tracking

• California has seen proposed legislation aimed at further tightening existing fee-increase rules — check current bill status for this budget cycle.
• Several other states have introduced (though not always passed) bills capping HOA fee increases in response to rising insurance and reserve costs.
• Insurance-driven cost spikes are the most commonly cited reason legislatures are revisiting these caps, so a board should expect this to remain an active area of state law for the next several years.

What a board should do before setting next year's increase

Confirm the state's statutory position first, then pull the CC&Rs' own cap language, then document the specific budget drivers — insurance premium changes, reserve funding gaps, contractor cost inflation — behind the proposed number. An increase a board can explain line by line survives a homeowner challenge far better than one presented only as a total percentage.

Special assessments are a separate question from regular dues increases

Everything above addresses regular, recurring assessment increases — the annual dues figure. Special assessments, which fund a specific one-time need like a roof replacement or storm repair, are typically governed by an entirely different set of rules, often with their own vote thresholds and, in some states, their own dollar or percentage triggers that require a membership vote rather than board approval alone. A board should not assume that a state's silence on regular-dues caps also means silence on special-assessment limits — the two are frequently addressed by different statutory sections with materially different thresholds.

Phasing a large increase instead of taking it all at once

Where the underlying budget need is real but the resulting increase would be steep — a reserve funding catch-up, for example — boards in states without a hard percentage cap still have the option to phase the increase across two or three budget cycles rather than imposing the full amount in a single year. This approach can reduce delinquency spikes and homeowner pushback, though it also means the association carries the underlying budget shortfall slightly longer, which is itself a tradeoff the board should weigh and document rather than default into without discussion.

Whichever path a board chooses, the increase should be communicated to homeowners well before the effective date, with the specific budget line items driving it laid out plainly — an increase homeowners can trace to a real cause is far less likely to trigger a recall petition or a wave of delinquencies than one that arrives as an unexplained number on next month's statement.

Boards operating in a no-cap state should not read the absence of a statutory ceiling as license to increase freely. The business judgment rule still requires a documented, reasonable basis for the number chosen, and a board that treats "the state doesn't cap it" as the entire justification is building a weaker record than one that ties the increase directly to specific line items in the budget.