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Many home buyers ask what an HOA is and what they do. Homeowners associations (HOAs) play a significant role in many residential communities, providing various services and amenities to enhance the living experience for homeowners. One of the essential aspects of HOAs is the collection of HOA fees or homeowners association fees. In this guide, we will examine the intricacies of HOA fees, their purpose, components, what they cover, and how they impact homeowners. When you're done reading, you'll understand the meaning of HOA fees. In my experience as a real estate agent for the past thirty-seven years, one of
HOA or homeowners association fees are recurring payments made by homeowners in a community or neighborhood governed by a homeowners association (HOA). These fees cover various expenses related to the maintenance, management, and upkeep of the common areas and amenities within the community.
One important thing to know about HOA fees is that they can vary significantly from one community to another. The fee amount is typically determined by the HOA board based on the projected expenses for the year.
These expenses may include landscaping, maintenance of community facilities such as swimming pools or gyms, security, insurance, and administrative costs. It is essential to carefully review the HOA budget and understand what the fees cover before purchasing a property in an HOA community.
Another critical aspect to consider is that HOA fees are typically mandatory for all homeowners within the community. The fees are usually collected on a monthly or annual basis, and failure to pay them can result in penalties or even legal action.
It is essential to budget for these fees when considering the purchase of a property in an HOA community, as they can significantly impact your overall housing costs.
Additionally, it is essential to understand that HOA fees can increase over time. As maintenance costs and other expenses rise, the HOA board may need to adjust the fees to ensure the community's financial stability.
Before buying a property, it is advisable to inquire about the history of fee increases in the community and any planned increases shortly. This will help you assess whether the fees are reasonable and sustainable for your budget.
Lastly, being aware of the benefits and potential drawbacks of living in an HOA community is crucial. While the fees contribute to the maintenance and enhancement of shared amenities, such as parks, playgrounds, or clubhouses, they also come with specific rules and regulations that homeowners must abide by.
These rules may govern property appearance, noise restrictions, pet policies, or parking regulations. It is essential to review the HOA's governing documents, known as the CC&Rs (Covenants, Conditions, and Restrictions), to ensure they align with your lifestyle and preferences before deciding to live in an HOA community.
In summary, HOA fees are recurring payments made by homeowners in an HOA community to cover expenses related to the maintenance and management of shared amenities. These fees can vary, so it is important to review the HOA budget and understand what is covered.