09/18/2025
🌟 Should your HOA Add a Working Capital Contribution for New Buyers? 🌟
As communities grow and age, one option boards are exploring is amending the declaration to require a one-time working capital fee from new buyers at closing. Here’s a quick look at the pros and cons of this idea:
âś… Pros
Boosts community funds right away – helps reserves or working capital without raising everyone’s monthly dues.
Can reduce special assessments – more stability means fewer surprise bills for current owners.
Tied to home sales – funding grows as homes turn over, not just by charging long-time owners.
Flexible use – money can go to operating needs, reserves, or capital projects.
⚠️ Cons
Hard to adopt – Minnesota law usually requires 67% or more owner approval to change the declaration.
May impact marketability – buyers or realtors could see it as an extra cost at closing.
Closing logistics – title companies must be set up to collect the fee smoothly.
Fairness questions – some may feel it shifts costs only to newcomers.
đź’ˇ Bottom line: This tool can strengthen your financial position, but it requires owner support, legal work, and clear communication. Transparency and community input are key before moving forward.
