If you’re shopping for a home you’ve likely come across properties managed by a Homeowners Association (HOA). These communities often offer added benefits, like well-kept amenities and neighborhood consistency. But, they also come with a recurring cost: HOA fees. Whether you’re a first-time buyer or moving into a new phase of homeownership, understanding HOA fees is essential to making a smart financial decision.
What Is An HOA?
An HOA is a private organization run by volunteer board members with covenants and bylaws that govern the association and the community. HOAs create and enforce community rules and handle administrative tasks such as collecting dues and managing neighborhood vendors. Many HOAs use governing documents called Covenants, Conditions and Restrictions (CC&Rs) to regulate the use, appearance and maintenance of property in a given community. These terms have the following meanings:
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Covenants: are agreements that homeowners accept when they purchase a property within an HOA. They often include promises to follow community guidelines, such as keeping lawns well-maintained and adhering to shared rules.
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Conditions: refers to specific requirements related to how properties within the community are used, maintained and presented. It can include standards for upkeep or usage that homeowners must follow.
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Restrictions: are rules that limit or prohibit certain actions or changes to a property. For example, CC&Rs may limit your options for landscaping, or prohibit additions like sheds or certain types of fences.
CC&Rs are typically recorded with the county clerk and are legally binding. They “run with the land,” meaning they remain in effect even when the property changes ownership.
Rules and restrictions can help enhance and preserve property and neighborhood appeal, but they can also become a source of contention if you violate them. It’s important to take the time to read the HOA CC&Rs and other governing documents thoroughly before buying a home that’s part of an HOA.
What Are HOA Fees?
HOA Fees are dues paid by homeowners in a managed community either monthly, quarterly or annually. These fees typically go toward maintaining shared spaces and amenities, managing the neighborhood’s upkeep and funding long-term repair and reserve needs. Every HOA is different, but fees often cover:
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Landscaping and exterior maintenance
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Community amenities (pools, gyms, parks, etc.)
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Trash removal and pest control
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Water and sewer
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Insurance for common areas
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Contributions to a reserve fund for future repairs
Fees differ among communities and can cover a range of amenities and services, so take the time to read and understand what your regular assessments do and don’t fund. The more amenities and services a community provides, the higher the fee is likely to be.
Is An HOA Right For You?
HOA communities can offer convenience and peace of mind, especially if you value amenities and consistent curb appeal. However, they also come with rules and recurring fees that should fit comfortably within your budget if you are considering buying in an HOA community.
Understanding HOA fees upfront can help you avoid surprises later and ensure the community you choose aligns with your lifestyle and financial goals.
