What Is a Homeowners Association (HOA) Fee?
The term “homeowners association (HOA) fee” refers to an amount of money that must be paid by certain types of residential property owners every month to their homeowners associations (HOAs). These fees are collected to assist the association with maintaining and improving properties.
HOA fees are almost always levied on condominium owners, but they may also apply in some neighborhoods of single-family homes. HOA fees may also go by the term “common charges” or “maintenance charges.”
Key Takeaways
- Homeowners association fees are monthly dues collected by homeowners associations (HOAs) from property owners.
- HOA fees are standard for most purchased condominiums, apartments, and planned communities.
- Some neighborhoods that consist of single-family homes also have HOA fees.
- HOA fees are used to pay for amenities, property maintenance, and repairs.
- Fees depend on the type of property and services provided, and they generally range from $200 to $300.
Understanding Homeowners Association (HOA) Fees
Homeowners associations are organizations that are designed to set up and enforce rules for certain properties and the residents who live in them. These groups are typically created in planned communities, subdivisions, or condo buildings. People who purchase these properties automatically become members of the association. As such, they are required to pay their dues through monthly fees, which are called homeowners association fees.
HOA fees paid by condo owners usually cover the costs of maintaining the building’s common areas, such as:
- Lobbies
- Patios
- Landscaping
- Swimming pools
- Elevators
Fees may also cover some common utilities, such as water/sewer fees and garbage disposal. The association may also levy special assessments from time to time if its reserve funds (funds set aside for major and/or emergency repairs) are not sufficient to cover a major repair, such as a new elevator or roof.
These fees can also apply to single-family houses—especially town houses—in certain neighborhoods, particularly if there are common amenities like tennis courts, a community clubhouse, or neighborhood parks to maintain.
HOA fees tend to vary drastically, depending on the property or community. The fees range anywhere from $100 to $1,000 per month. The average, though, tends to be from $200 to $300 per month. The general rule that applies is the more services and amenities, the higher the fees.
Some homeowners associations can be very restrictive about what members can do with their properties. These rules are written in the homeowner’s agreement.
Special Considerations
If a member fails to remit payment to the HOA, it affects the other members of the community. Common areas may suffer due to lack of funds, or other members may be assessed special fees to cover maintenance costs or other expenses.
The HOA has the authority to take action against delinquent homeowners. The actions depend on the contract between the HOA and the homeowner. Some contracts dictate that the HOA can charge late fees to the homeowner, while others allow the HOA to initiate a lawsuit, place a lien on the property, or foreclose on the owner’s property to collect the delinquent payments.
Some associations may assess both condo fees and HOA fees, so it’s a good idea to find out how much you’ll be responsible to pay before you purchase a property.
Criticism of HOA Fees
The main problem that people have with HOA fees is the cost. As mentioned above, they can range from a few hundred to a few thousand dollars each month. This is, of course, based on the type of property and the amenities involved. Paying monthly fees on top of mortgage payments and other costs, such as utilities, can put financial pressure on property owners.
Owners may even face higher fees if the reserve fund isn’t properly managed. Remember, these are funds that are set aside for unexpected and/or major repairs to the property. And the HOA’s board and/or management have a fiduciary duty to make sure that their reserve funds are maintained and managed properly.
HOAs also create rules related to parking or the use of common areas. In neighborhoods with single-family homes, the HOA may create rules on how often members can paint their houses, which types of fences they may have, how they must maintain their landscaping, and any other related issues. This can often ruffle feathers and create legal hurdles for both the associations and homeowners.
What do homeowners association (HOA) fees normally cover?
HOA fees typically cover the costs of maintaining common areas, such as lobbies, patios, landscaping, swimming pools, tennis courts, a community clubhouse, and elevators. In many cases, the fees cover some common utilities, such as water/sewer fees and garbage disposal. The association may also levy special assessments from time to time if its reserve funds are not sufficient to cover a major repair, such as a new elevator or new roof.
What is the average range for HOA fees?
HOA fees vary drastically, but some estimates claim these fees range from $100 to $1,000 per month, with the average ranging from $200 to $300. The amount of an HOA fee varies based on the type of property and the amenities it provides—the more services and amenities, the higher the fees. In some cases, owners face higher fees when an association’s reserve fund isn’t managed correctly.
What happens if someone doesn’t pay their HOA fees?
Property owners who don’t pay their monthly or annual fees, as well as any special assessments, may face action by the HOA.These actions depend on the contract between the HOA and the homeowner. Some allow the HOA to charge late fees, while others allow them to initiate a lawsuit, place a lien on the property, or foreclose on the owner’s property to collect the delinquent payments.
Why are HOA fees higher in some areas?
Since HOA fees pay for the amenities and maintenance in a community, those prices will vary from place to place. In high-cost-of-living cities like New York City, even basic maintenance will be more expensive than in low-cost-of-living cities because of higher minimum wages, power costs, and/or taxes. HOA fees may also be higher in condominiums than they are in single-family houses since the fees will pay for electricity, heating, cooling, etc. in common areas. In a recent survey, New York City was listed as the second highest median HOA cost in the nation behind Honolulu, with monthly fees of $410. On the other end of the spectrum, Harrisburg-Carlisle, Pa., had a median of $120.
The Bottom Line
HOA fees are charges levied on owners of many condominiums, co-ops, and certain neighborhoods. These fees cover the maintenance and upkeep of common areas such as shared hallways, elevators, lobbies, and parking lots. It will also usually cover snowplowing, gardening, and damage to common areas. Owners of condos should be aware of HOA fees when computing their monthly expenses.
FAQs
What Is the Primary Purpose of a Homeowner Association? An HOA exists to provide services for the residents of a community and ensure it maintains the vision of a well-kept, organized community that all members can enjoy living in.
What are the pros and cons of a homeowners association? ›
Some include the following.
- You Live in a Well-Groomed Neighborhood. ...
- You Have Access to Amenities. ...
- You Have Most Maintenance Done for You. ...
- Your Home Owners Association Handles Neighbor Disputes. ...
- You Risk Foreclosure if Dues Aren't Paid. ...
- You Don't Have as Much Freedom. ...
- You Have to Live with Certain Restrictions.
ASSOCIATION DUES means the dues payable by its members, which is established through the Association Constitution.
What are the financial goals of HOA? ›
HOAs are charged with keeping their common areas in good condition. This includes paying for common area landscaping, snow removal, trash removal and other maintenance costs. The budget should show the costs for maintenance and management of the association, as well as the costs for routine and emergency repairs.
What are the three primary functions of a community association board of directors? ›
There are three general responsibilities of association boards. These include maintaining common areas, managing budgets/fiscal responsibilities, and enforcing/complying with governing documents. Within each of these categories are many tasks.
What is another name for HOA? ›
Otherwise known as a homeowners association, the HOA community is the most common and well-known type of association. It is defined as an organization of homeowners that oversee the maintenance and provisions of community facilities and enforce various restrictions and covenants.
What is the disadvantages of HOA fees? ›
Within an HOA community, there is a potential threat of losing property due to unpaid taxes, HOA fees, liens, or foreclosures. Many HOAs have the power to attach a lien to properties in the community and subsequently foreclose on them. This typically only happens when owners fail to pay property taxes or HOA dues.
What is one disadvantage of a neighborhood with a homeowner's association? ›
Disadvantages of an HOA
Dues pay for property and community maintenance, upkeep, and community amenities. Even if you do not use the amenities, you are still required to pay. Dues may also pay for employees who work for the HOA or emergency funds.
How do I file a complaint against a HOA in Maryland? ›
If you have a complaint against your COC that pertains to records access, fair elections, or open meetings, please file it with the Consumer Protection Division at www.marylandattorneygeneral.gov or call 410-528- 8662 (toll-free in Maryland: 1-888-743-0023).
What is the difference between dues and fees? ›
A “fee” implies that it's a one-time payment. Dues are structured in one of several models based on what makes the most sense for each organization. These include multi-year, annual and monthly dues.
Whether it's better wages and benefits, job protection, or quality of life issues like scheduling, union dues are used to provide members with protection they can count on.
What are the example of association dues? ›
It also includes building maintenance such as minor repairs, repainting, and landscaping and pest control. It also includes community fees such as taxes, licenses, employee wages, and utility expenses (which covers water and electricity for the building NOT per unit).
How can I save money on my HOA? ›
Smart Ways to Save Money for your Association
- Go Digital:
- Review & Evaluate Service Contracts:
- Hire a management company.
- Review insurance policies:
- Invest in Preventive Maintenance:
- Negotiate Volume Discounts:
- Evaluate landscaping costs:
- Manage Legal Costs:
We encourage and support an association of neighbors who voluntarily work together to increase property values and promote the spirit of respect, caring, community, family, and friends. Our mission is to enhance our quality of life by maintaining our common areas and upholding our Covenants, Declarations, and By-Laws.
What is an HOA balance sheet? ›
An HOA balance sheet is a financial statement that gives you a clear picture of your association's spending at a specific point in time. Most organizations use balance sheets to track their expenditure and make informed decisions.
Who should not serve on a board of directors? ›
People Who Are Not Well-Informed
If you're not someone who likes to stay up-to-date on current affairs, or if you're not willing to do your homework before meeting, serving on a board might not be the right role for you.
What 4 major responsibilities does the board of directors have? ›
1) Recruit, supervise, retain, evaluate and compensate the manager. Recruiting, supervising, retaining, evaluating and compensating the CEO or general manager are probably the most important functions of the board of directors.
What are the 4 main functions of the board? ›
Hence, it is argued, boards can be helped greatly by focusing on four key areas:
- establishing vision, mission and values.
- setting strategy and structure.
- delegating to management.
- exercising accountability to shareholders and being responsible to relevant stakeholders.
Like other corporations, the HOA is governed by a board of directors elected by the members and a set of rules called "bylaws."
What is another word for HOA rules? ›
Simply put, homeowners association bylaws dictate how an HOA should run. Since HOAs are considered corporations under law, albeit non-profit, they require bylaws to govern day-to-day operations. HOA bylaws are also sometimes referred to as neighborhood association bylaws or subdivision bylaws.
HOA fees may also go by the term “common charges” or “maintenance charges.”
What is included in most HOA fees? ›
What do HOA fees cover?
- Grounds maintenance and landscaping.
- Pool maintenance.
- Snow removal.
- Trash removal.
- Electricity and other utilities for common areas.
- Fire alarm systems.
- Gate security guard.
- Pest control for common areas.
Generally, the board of a condo association does not require approval from the membership to increase fees.
What is the best part of HOA? ›
Benefits of an HOA
- Helping Maintain Property Values.
- Financial Stability. ...
- Community Connection through Volunteer Work. ...
- Added Layer of Support. ...
- Rules and Regulations Deter Nuisance Activity. ...
- Increased Community Pride. ...
- Well-Maintained Common Areas and Amenities. ...
- Access to Amenities. ...
Homeowners Association.
Some will make it singular possessive homeowner's while other use the plural possessive homeowners' association. The most common usage seems to be the non-possessive plural homeowners association.
Which of the following losses would not be covered by homeowners policy? ›
Standard homeowners insurance does NOT cover damage caused by flooding, earthquakes, termites, mold, or normal wear and tear. Learn about all the different home insurance exclusions and how to get covered. Pat Howard.
How do you deal with a nasty HOA? ›
If you have experienced HOA board harassment, here are necessary steps you need to take:
- Write a Letter. The first step should be to write a letter to the offending homeowner. ...
- Call in a Restraining Order. Some homeowners will not be stopped by a formal letter and imposed sanctions. ...
- Call the Police.
For Homeowners Associations. The Maryland Homeowners Association Act controls the creation, authority, operation, and management of homeowners associations in the state. You can find it under Real Property, Title 11B of the Maryland Code.
How much can HOA fees increase in Maryland? ›
Maryland currently does not impose a limit on how much HOA fees can be increased yearly. That being said, it is best to check your CC&Rs for further guidance. Your CC&Rs may contain limitations on dues increases.
What is an example of a fee? ›
Most often, fees are the payment one makes for service, both basic—mowing a lawn, for example, and complex—like drafting a will or preparing your taxes. Sometimes there is more than one fee charged for a service (i.e., buying a plane ticket for X amount of money, but getting hit with luggage fees and travel fees).
What Is a Fee Structure? A fee structure is a chart or list highlighting the rates on various business services or activities. A fee structure lets customers or clients know what to expect when working with a particular business.
Does fees mean money? ›
/fiː/ us. an amount of money paid for a particular piece of work or for a particular right or service: agree/charge/collect, etc. a fee He's good, but he charges huge fees.
How do I stop paying my dues? ›
So, if you live in a right to work state and you wish to stop paying dues, you should notify the union and your employer in writing that you are resigning your membership and canceling your payment of dues.
What is the purpose of monthly dues? ›
Membership dues, sometimes called member fees, are the payments members make to your organization on a regular basis in order to keep their membership. In exchange, they receive access to exclusive benefits and resources.
What is the difference between dues and due? ›
The plural form of due; more than one (kind of) due. (plural only) Money you pay to a group to be part of that group. Our club requires $10 a year in dues. I did not join the labor union because I did not want to pay the union dues.
What are common expenses for association? ›
Common Expenses of the Association definition
- Common Expenses.
- Liquidation Expenses.
- Litigation Expenses.
- Common expense.
- Property Protection Expenses.
- Administration Expenses.
- Basic living expenses.
- Partnership Expenses.
This money is primarily used to negotiate and maintain contracts, pay attorney fees, and maintain union offices and staff.
What are annual dues? ›
/duz/ the official payments you make to an organization that you belong to: Members of the club pay $50 in annual dues.
Who regulates HOA in Oregon? ›
Federal Laws - In addition to state law regulations, the federal government has laws that govern the operation and management of common interest communities in the state of Oregon.
What are three examples of a mission statements? ›
Best Mission Statement Examples
- Life is Good: To spread the power of optimism.
- Sweetgreen: To inspire healthier communities by connecting people to real food.
- Patagonia: We're in business to save our home planet.
The accrual method is the only basis of accounting that conforms with the Generally Accepted Accounting Principles (GAAP). Because you record transactions as you incur or earn them, you instantly know how well your HOA is doing financially. It produces the most comprehensive overview of your HOA's financial status.
What is equity in a homeowners association? ›
Equity represents what is left over, when liabilities are subtracted from assets. This basically shows how much money your HOA can spend at the moment.
What are three balance sheet elements? ›
A typical balance sheet contains three core components: assets, liabilities, and shareholder equity.
How do I file a complaint against an HOA in Florida? ›
Residents may file a Condominium/Cooperative Complaint Form (PDF) directly with the Division of Florida Condominiums, Timeshares and Mobile Homes. Hardcopies of the form can be obtained by calling 1.800. 226.9101 or 850.488. 1122.
What is the responsibility of the president of the homeowners association? ›
What does an HOA Board President do? The president leads the Board and is responsible for overseeing and handling many of its procedural duties. In order to succeed in this role, the Board president must be knowledgeable about the community's CC&Rs and governing documents and understand how to run an effective meeting.
Who oversees HOA in Florida? ›
The Office of the Condominium Ombudsman is a government agency established to regulate residential communities in Florida and oversee, among other things, education, complaint resolution, mediation and arbitration, and developer disclosure.
What is the Davis Stirling Act California? ›
The Davis-Stirling Act is an important piece of legislation that governs Homeowners' Associations (HOAs) in California. It was initially passed in 1985 and was designed to provide HOAs with substantial authority to regulate and manage their common-interest developments.
Can you sue HOA board members in Florida? ›
If a board member has committed, for example, embezzlement, an owner or another board member may file suit against them because that action would be a breach of their fiduciary duty – but what many do not know is that if there is no breach of duty, individual board members cannot be held liable.
Can an HOA in Florida sue a homeowner? ›
While the HOA can file suit against a homeowner who breaches the CC&Rs, there are certain situations in which homeowners are able to sue the HOA. Some may amount to nothing, but some homeowner issues can cause real problems for the association if they do not defend against them appropriately.
Can I sue my HOA for harassment in Florida? ›
Yes. When an HOA board violates federal and state Fair Housing laws, homeowners can sue for discrimination. HOA board members harassment.
President
The main responsibilities of the president include presiding over board meetings and facilitating the decision-making process; signing contacts, checks, and other legal documents; serving as a spokesman for the HOA; and taking charge of the day-to-day operations.
Can a board president make decisions alone? ›
In a word, yes. There are certain decisions the board can make unilaterally. On the flip side, there are also some decisions that must go through a membership vote.
Do Florida HOA board members have to be certified? ›
Just as a real estate sales associate must obtain a license in Florida, so must a homeowner association (HOA) Board Member obtain a certification. HOA board member certification in Florida varies by the level of involvement.
What is Rule 720 in Florida? ›
Chapter 720 of the Florida Statutes, also known as the Homeowners' Association Act, is a chapter of law that governs certain types of homeowners' associations in the State of Florida.
Who sets the agenda for an HOA board meeting in Florida? ›
The board president has the authority and responsibility to set the agenda. Regardless of the outcome, it's best to let your homeowners know that you appreciate their suggestion and carefully consider it.
How many board members are required for an HOA in Florida? ›
In the State of Florida, three is the magic number. No matter the size of your association, your board must have at least three members, with the number stated in your articles of incorporation or bylaws. Your bylaws should also have provisions regarding the manner in which the board can expand.
What are the unenforceable HOA rules in California? ›
HOA's cannot: Discriminate against any homeowners based on their skin color, familial status, national origin, race, religion, sex, or gender identity. Limit a resident's right to bear arms. Though, in some instances, they can restrict firearms and weapons in community areas.
What is the civil code 5673? ›
Decision to Lien for Delinquent Assessments.
Can an HOA be dissolved in California? ›
In California, HOAs are non-profit, mutual benefit corporations. The HOA is the legal entity that manages the common interest development and enforces the governing documents. Like any corporation, an HOA may be dissolved.
