Understanding Homeowners Association (HOA) Fees
A Homeowners Association (HOA) fee is a recurring payment required from certain residential property owners by their respective HOAs. These fees are essential for the maintenance and enhancement of properties within the association.
While typically associated with condominiums, HOA fees may also apply in select single-family home neighborhoods, sometimes known as common charges or maintenance charges.
Understanding HOA Fees
HOAs establish and enforce regulations for specific properties and their residents. These organizations are predominantly found in planned communities, subdivisions, and condominium buildings, with property purchasers automatically becoming members and obligated to pay monthly HOA fees.
Condo HOA fees typically cover the upkeep of common areas like lobbies, patios, landscaping, swimming pools, and elevators, and may also include utilities and occasional special assessments for major repairs.
Similarly, single-family homes, particularly townhouses with shared amenities such as tennis courts or community parks, may incur HOA fees. Fees can vary widely but average between $200 to $300 monthly, reflecting the range and quality of services and facilities provided.
Special Considerations
Non-payment of HOA fees by a member can impact the community, leading to inadequate maintenance or extra costs for other members. The HOA possesses the authority to take action against delinquent homeowners, including charging late fees, initiating legal procedures, or placing liens on properties.
Criticism towards HOA fees often revolves around the financial burden they impose on property owners. Ranging from hundreds to thousands of dollars monthly, these fees, coupled with mortgages and utilities, can strain finances. The management of reserve funds for repair expenses also influences fee levels.
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.