Can our HOA board change dues from one annual payment to monthly or quarterly payments?

By OurHOA · General information · Revised November 1, 2026

How an HOA board switches dues from annual to monthly or quarterly billing: who has the power, cash flow math, TX, FL and CO rules, autopay notices and a timeline.

Part of the HOA board handbook: treasurer and money.

The short answer

Often yes, but only if the governing documents leave the payment schedule to the board. Many declarations set an annual assessment and then say it is payable in installments "as the board determines." That wording lets the board pick monthly, quarterly or annual billing by resolution. Other declarations name the due date and frequency outright, and then changing it takes an amendment the owners approve. The total owed does not change with the schedule. A $1,800 annual assessment is still $1,800 whether it arrives as one check or as twelve $150 payments. What changes is when cash lands in the operating account, how many payments the treasurer posts, how late fees work and what owners on autopay have to be told. Settle those before the board votes, and make the switch at the start of a fiscal year, not in the middle. Rules vary by state and by each community's documents. This guide is general education, not legal advice, so have the association's attorney read the schedule language before the vote.

Find who holds the power

Read three documents in this order. 1. The declaration's assessment article. Look for the words that set timing: "due and payable on January 1," "payable in monthly installments," or "at such times as the board shall determine." A fixed date or frequency in the declaration binds the board. 2. The bylaws. Some bylaws repeat or override the declaration on billing, and some give the treasurer duties tied to a particular schedule. 3. Past board resolutions. If an earlier board set the schedule by resolution, the current board can usually change it the same way. State law sets a floor in some places. Colorado's Common Interest Ownership Act, C.R.S. 38-33.3-315(1), says assessments must be made no less often than annually and based on a budget adopted at least annually. Billing more often than once a year fits inside that rule. If the declaration fixes the schedule, the board cannot vote its way around it. Ask counsel whether a bylaw change is enough or whether the declaration itself needs amending, and at what vote.

Run the cash flow before you vote

Take a 60-home association with an $1,800 annual assessment and a $108,000 budget. Under annual billing, most of the $108,000 arrives in January and February. The association can pay its insurance premium on time and fund reserves in one transfer, but it also sits on a large balance for most of the year and carries one big delinquency risk per owner. Under monthly billing, about $9,000 arrives each month. That smooths things for owners, and a missed payment surfaces in weeks instead of eleven months later. The cost is volume: 720 payments to post and reconcile instead of 60, and more chances for a payment to land in the wrong account. Before deciding, list every large bill and its due month: the insurance premium, the landscaping contract, the annual audit, the reserve transfer. If the premium is $30,000 due in March and only $27,000 has come in by then, the board needs a cash cushion, a premium financing plan or a quarterly schedule that front-loads the first payment. Quarterly billing (four $450 payments here) is a common middle ground for small associations without a manager.

State rules that change with the schedule

Texas. Property Code section 209.0062 requires an association with more than 14 lots to adopt and record guidelines for an alternative payment schedule on delinquent amounts, with a minimum term of three months. A regular monthly billing schedule is not that plan and does not replace it; keep both. Section 209.0064(b) requires the certified-mail notice before collection agent fees to list each delinquent amount, so monthly billing means more line items to get right on that letter. Florida. Section 720.3085(3) lets an association charge interest on late assessments and installments at the rate in its documents, or 18 percent simple interest if none is set, and bars compound interest. If the declaration or bylaws allow it, section 720.3085(3)(a) caps the administrative late fee at the greater of $25 or 5 percent of each installment paid late. On a $1,800 annual bill the cap is $90. On a $150 monthly installment it is $25. Section 720.3085(3)(c) also requires written notice by first-class mail at least 30 days before the association changes how it delivers invoices, so do not switch from paper to email in the same move without that notice. Colorado. Section 38-33.3-315(2) caps interest on any past-due assessment or installment at 8 percent per year. Section 38-33.3-316(1)(b) says each installment can become subject to the statutory lien if it stays unpaid 15 days after its due date. The new schedule also has to appear in the budget the board adopts, and section 38-33.3-303(4)(a) requires the board to send owners a budget summary within 90 days of adoption and set an owner meeting to consider it.

Autopay and bank drafts

Owners who pay by recurring bank draft need their own plan. Under Regulation E, 12 CFR 1005.10(d), when a preauthorized transfer from a consumer's account will differ in amount from the previous one, the payee or the bank must send written notice of the amount and date at least 10 days before the draft. Going from one $1,800 draft to $150 drafts is exactly that change. The cleanest route is to end the old authorizations and collect new ones that state the new amount and dates. Ask your bank or payment processor whether it sends the notice or expects the association to. Do not let a January draft for the full year run under an old authorization after the board has moved to monthly billing.

A sample timeline

For a January 1 fiscal year: - July: the treasurer pulls the assessment article and asks counsel whether the board can change the schedule by resolution. - August: the treasurer builds a month-by-month cash projection for the new schedule and lists any bill that would come due before enough cash arrives. - September: the board adopts the schedule change by motion at an open meeting, effective with the next fiscal year. - October: the board adopts the budget showing the installment amount and due dates, then sends the budget summary on the timeline its state and bylaws require. - November: the treasurer mails or emails the schedule notice with the invoice, asks autopay owners for new authorizations, and sends any required varying-amount notices. - January 1: the first installment comes due. Hold a short review at the March board meeting to catch posting errors and owners still paying the old way.

Wording the board can use

A motion for the minutes: "Moved that, under Article [number] of the Declaration, the annual assessment for fiscal year [year] be payable in twelve equal monthly installments due on the first day of each month, with any late charge applied only after the grace period in the association's collection policy, effective January 1, [year]." A notice paragraph for owners: "Starting January 1, your annual assessment of $[amount] will be billed in twelve monthly installments of $[amount], due on the 1st of each month. The total for the year has not changed. If you prefer, you may still pay the full year in January. If you pay by automatic bank draft, please complete the enclosed authorization form by December 1 so your draft matches the new amount." Give owners the option to keep paying the full year up front. It costs the association nothing and heads off most complaints.

Mistakes that cause trouble

Changing the schedule in mid-year. Owners who already paid the full year then need prorated credits, and the ledger gets messy. Wait for the next fiscal year. Forgetting the collection policy. Grace periods, late fees and the point at which an account goes to the attorney are often written around one annual due date. Update the policy the same night the board changes the schedule, and in Texas re-record the payment plan guidelines if they change. Charging a late fee each month on the whole balance. Late fees and interest attach to each late installment under the rules above, not to the full year's assessment. Treating the change as a dues increase. If owners hear about it only from the invoice, many will assume the bill went up. Say plainly that the total is the same. Our guide on how to send annual HOA dues invoices covers what each bill should say, and our page on HOA payment plan rights explains what owners can ask for once an account falls behind.

Sources

These guides are general education for HOA boards and residents, not legal, tax, or financial advice. Rules vary by state and by your community's governing documents - check with a professional for your situation.

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