Your homeowner association (HOA) is responsible for maintaining the community spaces in your complex or subdivision while also setting rules to help the entire community to keep property values up and maintain safety. To do this, most HOAs charge homeowners monthly fees to cover each homeowner’s portion of the common property expenses.
HOAs are most commonly found where homeowners share walls or have common areas, such as condominiums and townhouse communities. However, neighborhoods of detached single family homes may also have homeowner associations.
HOA fees are mainly for maintenance, but that can mean many different costs depending on your HOA’s rules and regulations. There might also be some other expenses that your HOA needs to cover. In general, however, you can expect your HOA fees to go toward:
Most HOAs maintain a reserve or emergency fund to pay for unexpected expenses, such as a plumbing issue in one of the common areas.
One of the main purposes of a homeowner association is to protect property values. Without assessing HOA fees, the association wouldn’t have the resources to perform this job. If the HOA doesn’t have the resources to pay for services, maintenance, and improvements, everyone would be responsible for those costs on their own. That doesn’t mean property values would necessarily drop if the HOA disappeared, but it does put them at greater risk if neighbors choose to ignore maintenance issues.
Moreover, the types of housing structures that most often have an HOA also have common areas, such as recreation centers, workout rooms, and playgrounds. Even small communities can have walkways and lawns. People who share spaces almost always need guidelines to both protect homeowners’ rights and clarify their responsibilities.
You are obligated to pay HOA fees if you move into a community that is managed by a homeowner association. If you don’t, your HOA could assess late charges. They can even sue if you continue to ignore your fees. Should the association win the lawsuit, it may be allowed to take your back HOA fees out of your bank account or garnish your wages. Some states allow homeowner associations to start foreclosure proceedings on your property if you are consistently delinquent with HOA fees.
In addition to the legal actions that the HOA can take against you, it can revoke your privileges to use common areas, such as recreation centers and pools.
HOA fees vary widely, depending on the size of your building or community and the number of services it needs to cover. The cost can be as little as $50 per month to well over $1,000 per month. While fees will depend on where you live and the amenities provided by your HOA, most people find that HOA fees are between $200 to $300 per month.
You want to keep HOA fees in mind when you’re looking to buy a home. Not only are you responsible for your monthly mortgage payments, but you are also responsible for the HOA fees. Depending on how big those fees are, the extra cost could affect your budget.
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