What are the biggest issues impacting your community association? We’d be willing to bet that money is at the top of your list.

According to an independent survey conducted by Condo Control, increased costs is the top concern for 31% of communities.

30% are troubled by the fact that there is just too much work to do. Hiring more staff would help resolve this issue, but most communities don’t have that much wiggle room in their budgets.

25% say lack of finances is a top concern. So, in one way or another, finances are putting a strain on condominiums and HOAs.

These findings align with research conducted by The Foundation for Community Association Research.

Table of contents

• Money concerns are impacting communities all over the U.S.
• Least problematic condo/HOA issues
• Have new laws created more problems?

Money concerns are impacting communities all over the U.S.

The organization released a survey in February of 2025 highlighting the current challenges that community association managers and lawyers are witnessing. Respondents were asked to rank issues on a scale of 1 to 5, 1 being minimal and 5 being significant.

 Increased insurance premiums were by far the biggest problem.

71% of respondents ranked this issue as a 5, and 17% gave it a 4. That means at least 88% of participants believe premiums are the most significant issue impacting the communities they care for/assist.

Lack of sufficient reserve funds was next. 21% of respondents ranked this issue as a 5, and 25% ranked it as a 4.

Increased requirements for reserve studies was third with 14% of respondents giving this issue a 5, and 16% giving it a 4.

Least problematic condo/HOA issues

The least problematic matters were increased number of accessory dwelling units (ADUs) in the community, limitations on board member authority to make decisions, and increased requirements for sustainability efforts.  

Have new laws created more problems?

Most of the issue options presented in the survey were selected based on recent condo/HOA laws (insurance being the big outlier).

Some of those laws require communities to fund reserves, while others mandate inspections. But it would be unfair to link money (and other) troubles exclusively to new laws.  

These are compound issues. Prices for labor, materials, and of course, insurance skyrocketed after the most recent pandemic, and many of those costs never came down.

Hawaii, for example, declared an emergency last year after owners started to panic as a result of sky-high premium increases. In one extreme case, a community was told that its insurance policy premium was going up more than 300%.

Combine higher expenses with aging infrastructure, new legislation, green initiatives and unexpected reserve fund requirements, and it’s not hard to understand why communities are struggling.

But why are states creating laws that negatively impact communities? The intention is never to create more obstacles for condos and HOAs. However, like anything, big changes are usually accompanied by undesirable side effects.

Environmental sustainability laws

For example, the Michigan Homeowners’ Energy Policy Act, which came into effect on April 1, 2025, limits a homeowners association’s ability to restrict or prohibit owners from installing solar panels and other energy-saving devices.

HOAs must also adopt a solar energy policy that contains a number of provisions required by the statute within one year after the effective date of the statute.

While this change supports environmental initiatives and owners who want to use sustainable energy alternatives, it imposes an additional regulatory scheme and takes away from the HOA’s architectural authority to regulate solar panels.   

Reserve fund requirements

Several states are implementing reserve requirements in response to the Surfside condo collapse. To ensure the catastrophe is never repeated, some communities are now required to conduct reserve studies on a regular basis, and/or fund reserves. The thinking is that if condos must fund reserves, there will always be money available for critical repairs. Though these regulatory changes could save lives in the future, they have already created financial strain for owners, especially those living in older condo buildings.

If the reserve funds were historically underfunded, owners may be asked to come up with thousands of extra dollars to pay for overdue repairs.

Florida is one state that has been hit hard by new legislation. It too is dealing with high insurance rates, and the combined expenses have caused some owners to consider selling their units at a loss.  

ADUs

In California, accessory dwelling units (ADUs), also known as granny flats or backyard homes, are gaining popularity. The housing shortage has forced communities to look for sustainability solutions, and ADUs are garnering attention because they are easier and more affordable to build.

California removed the state-level restriction on selling ADUs in 2024. Furthermore, homeowners, developers, and investors can build ADUs for rental housing without any owner-occupancy requirements.

 Homeowner building ADUs must still comply with HOA rules and restrictions, as well as its architectural committee. The HOA can still regulate the size, design and architectural application process, for example.

Despite the removal of state restrictions, most implementation happens at the local level, which is one reason why communities have not encountered many issues with ADUs. Furthermore, building a home of any size takes a lot of work. Most owners probably don’t want to invest time and resources into an ADU. As such, this matter isn’t expected to become a core focus for HOA communities.  

Less decision-making power for boards

HB 1203 may have created some anxiety for Florida board members when it was passed in 2024.

Several new laws were introduced with the goal of promoting transparency and consistency across Florida homeowners associations.

Board members are now required to complete an education course when they are elected, and communities must maintain a website and post association records as a result of the bill. Most would consider those changes to be positive, and reasonable. But a few issues, including the inability of HOAs to ban owners from parking pickup trucks in their driveways, or keeping flags, vegetable gardens or artificial turf in their backyards if they aren’t visible from the parcel’s frontage or an adjacent parcel, an adjacent common area, or a community golf course, has caused headaches and confusion in some communities.

Fortunately, the issue of decision-making power was ranked low in terms of significance. It remains to be seen if this problem will become more pronounced as other states pass new laws that provide more freedoms to individual homeowners.

Additional challenges

Property managers identified a few other issues that could impact the “viability of community associations in the future.” They include:

• Volunteer shortage – finding board members and volunteers for committees is getting harder  
• Rising costs – uncertainty about how much more costs will go up. People may go out of their way not to join governed communities  
• Legal and regulatory problems – though it is not yet a major issue, there have been many complaints about restrictive legislation
• Lack of education – board members and managers are lacking adequate training and education

Conclusion

Returning to the independent Condo Control survey, the majority of respondents (37%) would like to find ways to reduce costs.

It’s not an easy goal to achieve, but it can be done. With thoughtful planning, some negotiations, and comprehensive property management software, managers can successfully reduce costs while maintaining the same great level of service.