Preparing Your HOA's 2027 Budget: 7 Things Every Board Should Review
As 2026 comes to a close, homeowners associations and condominium boards should be taking a closer look at their financial plans for the year ahead.
For many community associations, fall is one of the most important times of the year. Boards are reviewing expenses, evaluating contracts, and preparing budgets that will determine how their communities operate in 2027.
While keeping homeowner assessments affordable is always a priority, a well-prepared budget needs to do more than cover routine expenses. It should account for rising costs, unexpected repairs, and the long-term financial health of the association.
Here are seven important areas every HOA and condominium board should review when preparing next year's budget.
1. Review Actual Expenses from 2026
Before developing next year's budget, boards should understand how the association performed financially during the current year.
Compare budgeted expenses against actual spending and identify any significant differences.
Consider questions such as:
- Which expenses exceeded their original budgets?
- Were there unexpected repairs or emergency costs?
- Did any budget categories consistently come in under budget?
- Are there expenses that were overlooked entirely?
Understanding where money was spent in 2026 can help create a more realistic financial plan for 2027.
2. Evaluate Vendor Contracts and Potential Increases
Landscaping, snow removal, trash collection, and other recurring services often represent a significant portion of an association's operating budget.
Boards should review existing contracts to determine whether pricing changes, scheduled increases, or contract renewals will affect the coming year.
This is also a good opportunity to evaluate vendor performance and determine whether obtaining competitive proposals would benefit the community.
3. Account for Insurance Premium Changes
Insurance is an increasingly important consideration for HOA and condominium budgets.
Premium changes, deductible adjustments, and coverage requirements can significantly affect annual expenses.
Rather than assuming insurance costs will remain consistent, boards should work with their insurance professionals to review upcoming renewals and anticipate potential changes.
Planning ahead can help reduce the likelihood of unexpected financial adjustments.
4. Revisit Reserve Contributions
An operating budget covers the association's regular expenses, but reserve funding helps prepare for major repairs and replacements.
Depending on the community, these expenses may include roofs, pavement, siding, drainage systems, or other shared infrastructure.
Boards should evaluate whether current reserve contributions remain appropriate based on the association's reserve study, anticipated projects, and available funds.
Reducing reserve contributions to keep assessments artificially low may provide short-term relief but can create greater financial challenges in the future.
5. Plan for Upcoming Maintenance and Capital Projects
Not every maintenance expense occurs on a predictable schedule.
Boards should review the condition of common elements, outstanding maintenance concerns, and projects that may need attention in 2027.
Prioritizing these needs during budget preparation gives communities more time to obtain proposals, schedule work, and determine how projects will be funded.
Proactive planning is generally more manageable than responding to unexpected repairs without available funds.
6. Evaluate Assessment Levels Realistically
Increasing homeowner assessments is rarely a popular decision, but keeping them unchanged is not always financially responsible.
If operating expenses are increasing, boards need to evaluate whether existing assessment revenue will adequately support the association's obligations.
An effective budget should balance affordability with the need to maintain community assets, fund reserves, and meet financial commitments.
When increases are necessary, clear communication can help homeowners understand the reasons behind the decision.
7. Communicate the Budget Clearly to Homeowners
Budget preparation doesn't end when the numbers are finalized.
Homeowners should understand how association funds are being used and what changes they can expect in the coming year.
Providing a straightforward explanation of major expenses, upcoming projects, and assessment changes can help build trust and reduce confusion.
Boards should also ensure that the budget review, approval, and notification process follows their governing documents and applicable state requirements.
A Strong Budget Sets the Tone for the Year Ahead
An effective HOA budget is more than a financial document. It is a planning tool that helps boards make informed decisions, anticipate challenges, and protect the community's long-term interests.
For associations in Connecticut and throughout the Northeast, taking the time to carefully evaluate expenses and financial priorities now can help create a more stable and predictable year ahead.
At The SilverBrick Group, we work alongside HOA and condominium boards to support financial planning, budget preparation, vendor oversight, and day-to-day community operations.
Our goal is to help boards make informed decisions while maintaining the financial health and long-term success of the communities they serve.
Preparing for 2027? Contact The SilverBrick Group to learn how professional association management can support your community.
