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What Is HOA Fee? Are Members Required To Pay It?

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What is HOA fee? The concept may be unfamiliar to those who have never lived in a condominium or homeowners association. They may not realize how important these fees are and why they must pay them. What is an HOA fee, what does it cover, and is it required? Let’s examine the ins and outs of homeowners association fees. 


HOA Fee Meaning: What Is HOA Fee?

What is a homeowners association fee? Simply put, an HOA fee is the periodic assessment residents must pay to the homeowners association. Homeowners associations use these fees to run the community. Different HOAs will provide different schedules when it comes to collecting payments. Some collect monthly, while others quarterly, semi-annually, or annually.

HOA fees are collected in almost every condominium. However, many single-family neighborhoods collect them as long as they are part of an association. Some communities also change the name of these fees to HOA assessments, HOA dues, maintenance charges, or common charges.


What Do HOA Fees Cover?

At first glance, it may be unclear as to what HOA fees do for the community. What is a HOA fee for? How does it benefit the members and the HOA at large? To answer these questions, it’s important to understand the purpose of homeowners associations.

HOAs are organizations that govern a community. Their main goal is to protect and raise the community’s property values so residents can sell their homes at high prices. To do so, homeowners associations must maintain the community’s common areas and enforce rules. 

Enforcing rules may be achievable by the board of directors alone, but community maintenance often requires outside help. That’s because the community members don’t have the expertise or experience to do the cleaning or maintenance themselves. Moreover, there are lots of common areas to maintain, such as:

  • Lobbies and elevators
  • Hallways and walkways
  • Roads and sidewalks
  • Patios
  • Community parks
  • Swimming pools
  • Community clubhouses
  • Gyms and exercise rooms

Community maintenance and management will cost money. HOAs must hire vendors and skilled contractors to do the job. They may also hire experts to help fulfill their financial and legal management needs. Some HOAs also use fees to cover utilities like sewage, garbage disposal, and snow removal.

Apart from these, HOAs may also take on improvement projects. They may create parks, take on beautification projects, or add playgrounds to entice buyers. Some may also host events to foster a better sense of community and improve the members’ life satisfaction. So, what are HOA dues for? Funding the HOA’s maintenance, management, and projects is the answer.


Special Assessments vs HOA Fees

Homeowners may confuse special assessments and HOA fees, but they are not the same. HOA fees are the regular dues that homeowners must periodically pay the community. Meanwhile, special assessments are one-time fees imposed on homeowners to cover major or emergency repairs. 

Homeowners associations may require the residents to pay special assessments in a lump sum. However, they often allow homeowners to pay these in installments. They are also only levied when the HOA’s reserve funds are insufficient to cover the repair cost.


How Much Are HOA Fees?

So, how much do these fees cost?” Unfortunately, there is no set standard for how much HOA fees are. It depends on various factors.

Firstly, homeowners associations with more amenities and facilities may charge higher fees. This is because there are more properties to maintain. Moreover, HOAs may charge more in locations with higher overall cost of living or if the HOA offers more services. Some HOAs also charge higher fees when there are more projected expenses for the coming year.

As a result, HOA fees can range from anywhere between $100 to $1,000 monthly. However, on average, the monthly fee falls somewhere between the $200 to $300 range. 


How Does the HOA Calculate These Fees?

The homeowners association cannot arbitrarily assign a number and charge the homeowners for that amount. Instead, the HOA’s board of directors will calculate a fee based on the planned budget. 

The board considers all of the HOA’s revenues and expenses, including the cost of repairs, maintenance, and vendor services. They also anticipate cash inflows from other revenue streams like projected facility rentals. Afterward, they divide the total projected cost by the number of members. This determines how much each member pays in HOA fees. 

However, there are also other considerations, like the upkeep of limited common areas. These are spaces only used by or accessible to some residents. Depending on state law and the governing documents, residents with access to these limited common areas are often charged more.


Do Homeowners Have to Pay HOA Fees?

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Homeowners are legally obligated to pay the HOA’s fees. That’s because they agree to do so when they close a sale and become association members. Hence, residents are obligated to pay their HOA fees on time. This includes the monthly fees, special assessments, fines, and interest. Otherwise, they may face certain consequences.


What Happens if You Don’t Pay HOA Fees?

Non-payment of HOA fees is a serious matter. That’s because failed payments are often sent to collection agencies. This can hurt the resident’s credit score and lead to more financial problems. Moreover, the HOA can impose fines and interest depending on state law and the community’s governing documents.

If non-payment continues for long or reaches a certain amount, the homeowners association may impose a lien on the property. This can hinder the homeowner from selling their home eventually. Moreover, the HOA can foreclose the property to collect the homeowner’s debt.


Responsible HOA Living

What is HOA fee? Now that we’ve answered this question, homeowners can understand how important it is to fulfill this financial obligation. These fees serve a purpose and provide residents with the benefits they seek from living in an HOA community. Thus, they must be responsible and pay HOA fees on time.

Is your HOA having problems managing delinquent accounts and late payments? Why not ask for professional help? Vanguard Management Group provides the best HOA management services in the industry. Give us a call at 813-930-8036 or contact us online today!

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