From the EVP's desk: Following your assessment dollars

by Mike Conroy, MVF Executive Vice President

The assessments that residents pay in any homeowners association (HOA) or condominium association (COA) are always a sensitive topic. Most would agree that living in an HOA has more benefits than not, and the services provided should be justified by the assessment fees set by the board of directors. However, the term “reasonable fee” seems to be where folks have a major difference of opinion.

No one likes overpaying for anything, but paying the bare minimum also means you receive the bare minimum in quality of service. It’s a board of directors’ fiduciary duty – in conjunction with the community manager – to strike the right balance between cost and service and managing the contracts and expenses within the framework of the budget to maintain the community. In Montgomery Village, this happens simultaneously on two different levels: Montgomery Village Foundation (MVF) and your local homes corporation or condominium association. Both entities have separate responsibilities, budgets and boards of directors. However, because MVF is also a management agent for a number of associations in the Village, the separation of duties is often overlooked or misinterpreted when homeowners have questions. It becomes even more layered, as there are different funds that homeowners pay into, and the local assessment varies per association.

Let’s start with the funds themselves, which are all established as mandatory in each association’s governing documents. Assessments are charged annually, and some residents choose to make one payment at the beginning of the year. MVF extends the ability to pay quarterly to make the payments more budget-friendly, with payments due in January, April, July and October.

All property owners pay the MVF Fee. This covers the operating costs of Village-wide recreation, maintenance of Village parks and lakes, administration of architectural standards, the publication of the Montgomery Village News and general Village governance.

In addition, most homeowners also pay the Designated User (DU) fee. This finances the operation and maintenance of the four community centers, swimming pools and tennis/pickleball/soccer courts owned by MVF. This fee is paid by designated users only – the residents who are granted access to these recreation facilities. Designated Users are property owners in: Bloom Village, East Village, Eastgate, Maryland Place, North Village, Northgate, Patton Ridge, Poplar Spring, Stedwick, Whetstone, and specific parts of South Village and Middle Village.

Condominium owners and apartment renters are not Designated Users and do not pay the DU Fee because the condominium/apartment either owns or arranges for these types of amenities for their residents, and charges them accordingly as part of those fees. Both the MVF and DU fees fund the day-to-day operations of MVF and common areas of the community owned by MVF.

The other portion of your assessment funds the operations of your local HOA or COA, and depending on your management company, may or may not be paid directly to MVF.

The homes corporation assessment finances the management of your local homes corporation, the maintenance of community properties such as green space, streets, sidewalks, post lamps, streetlights and resulting utility charges, trash removal and the administration of covenants, such as parking enforcement.

Owners of condominiums are assessed a single annual fee, which is paid monthly to MVF by the COA. The condominium fee includes the MVF Fee, separate recreational facility use and management fees. The condominium fee also includes funds for trash removal, streetlight utilities, water and sewer expenses, insurance, green space maintenance and snow removal.

So how much do Montgomery Village residents actually pay? This answer differs depending on where in the Village you live, and whether or not you pay the DU Fee. And, if your association is managed by MVF, all your fees are combined into one convenient payment, then distributed appropriately to the funds they belong to.

For example, if you live in Patton Ridge, your quarterly payment breakdown is: MVF - $67.27; DU - $140.76; PRHC - $247.55; Total - $455.57. As you can see, less than half of the total assessment paid goes to MVF, with the larger portion being the DU Fee; the largest portion goes to your local association, and in this example, that is Patton Ridge Homes Corporation (PRHC). When fees increase, the local assessment is where the biggest increase is felt because the number of homes sharing those costs is small (in comparison to the total number of homes in all of Montgomery Village).

During the budget process each year, careful consideration is given to all line items. Notably, service contracts and labor costs are where the biggest increases occur, with the rising costs for part-time labor and materials and goods being major drivers.

Specifically, for the MVF and DU funds, minimal increases are proposed each year and then adjusted based on current year trends before the budget is passed. For example, the 2026 budget proposed a $0.77 per unit per month increase in MVF but resulted in only a $0.55 increase; the DU fund proposed a $1.25 per unit per month increase and was walked back to $1.15.

In terms of how assessments are spent, operating costs are budgeted monthly, as well as a significant Contribution to Reserves. Reserves are also invested to help maintain the account and fund necessary improvements to or replacement of assets identified in the budget process each year. A great example of this is the current renovation of Stedwick Pool. Any assessment increase is not related to the construction of the pool – the renovation is funded from years of savings and investments. Out-year increases will contribute to pool operations and reserves (with updated costs), but the $1.15 per month DU increase doesn’t cover a $4.8 million renovation. It is also important to note that there is not a special assessment or capital loan to fund these improvements; it is due to sound financial planning.

The foundation of that planning is the “reasonable fee.” For 2026, the MVF Fee increased $6.60, and the DU Fee increased $13.80 for the year. The total increase of $20.40 seems very reasonable for all the amenities and functions MVF provides, don’t you think?