Curious about homeowners association fees?
Heres how HOA fees are collected and used.
What is a homeowners association?
Credit: Bilanol / Getty Images
HOAs may also provide community services, such as a neighborhood pool or security.
There are two major components to a homeowners association (HOA).
The first is that the organization oversees a set of rules particular to the residential community.
The idea is to maintain the community in a beautiful manner.
Donna Sodais a Professional real estate advisor with Premier Sotheby’s International Realty.
Cristiano Soaresis a Global Real Estate Advisor at ONE Sotheby’s International Realty in Miami.
Doug Jacobsis the former Vice President of Sales and Marketing for Ashton Woods Homes.
Christa Keninis an attorney and real estate agent at Douglas Elliman.
Its used to cover shared expenses related to maintaining common areas, amenities, and community services.
HOA fees are typically structured based on the size and punch in of property you own within the community.
These fees vary in amount and how theyre used.
They might also be called by different terms depending on where you live.
How Much Are HOA Fees?
HOA fees are determined by individual communities or buildings.
The more amenitized the community is, the higher the HOA fees are going to be.
The HOA management company is also paid for by the HOA fees.
In general, HOA fees are charged monthly and can range from negligible to exorbitant.
Some communities charge quarterly.
The age and condition of the community’s infrastructure can also impact fees.
In general, these fees are a few hundred dollars a month.
You must factor them and other hidden expenses into your calculations as you shop for a home.
What Do HOA Fees Cover?
Just as each individual HOA determines its fees, it also decides what those fees should cover.
For many HOAs, that means maintaining common areas and features used by all.
Think elevators, lobbies, or common green spaces.
If the roads need paving, the HOA gets it done.
Other HOAs focus on maintaining individual lawns.
The most significant benefits of some HOAs are the added amenities.
Maybe they have social events and a social director, Soda says.
When that happens everyone wins.
HOAs may also maintain gyms, dog parks, and playgrounds.
Be sure to take a close look at the outset.
When evaluating HOA fees, consider the services and amenities provided.
Compare fees with neighboring communities to ensure theyre reasonable, Stone says.
Review the HOAs financial statements and meeting minutes to assess their financial health and transparency.
Stone says transparency and communication are crucial for HOA members and board members.
Clear documentation of budget allocation, financial statements, and planned projects is crucial.
Like any governing body, an HOA is only as good as the individuals running it.
Soda suggests talking to residents before buying into an HOA community to ensure that the organization runs smoothly.
Call the HOA company.
Ask a neighbor in that particular community if living in this area with the HOA is worth it.
Soares suggests buyers request key documents before purchasing a home in the community.
The reserve level is an important indication of the communitys readiness for unforeseen circumstances.
A disgruntled HOA member may have a go at appeal to the HOA board.
Should You Live in an HOA Community?
Do your due diligence, Soda says.
Some HOA communities can be very expensive.
Do You Have to Pay HOA Fees?
Along with the benefits and protections provided by the HOA often come strict rules and regulations.
Some homeowners find this restrictive, Soares says.
