HOA Fee Basics

Home Owners association Fees are getting more common in this part of the world. Where once they were quite rare, the increase in town scrutiny for new developments, and the increase in density in this area, they are showing up all over the place. So what are they? Most people know that the "fee" part means they must pay something. But they aren't usually sure what they get. Most HOA fees are a fee assessed to a group of home owners to pay for or support a shared benefit of the association. They can be as simple as mowing the grass on a neighborhood field, or as complicated as a condo fee.


Types of HOA fees

As mentioned previously, HOA fees can be for a huge range of items. Trash pickup, lawn maintenance, golf club dues, water access dues (many lakes have a HOA fee for various reasons), shared sewer systems, plowing, gardens, private roads - the list is virtually endless. The only way to know for sure is to look at the Association


documents. When selling property, many Sellers will just highlight what the money goes for most of the time, but you should always read the documents before committing to that property. There could be rules you're not comfortable with.


What's the Difference Between a Condo Fee and an HOA Fee?

Well, there's really no functional difference. Legally, most HOA fees are for properties that are deeded single family homes, and condo fees is the language used for those properties that are legally condominiums. In general, condominiums have larger and more complex rules, but that's not always the case. As noted, most HOA fees are simple and straightforward, but there's no "standard" or rule that says they need to be. They can be just as, or more complicated than condo fees. (It should be noted that in some instances condo documents are quite simple).


What should I Absolutely Know About HOA fees

I think the number one question you should try to get answered is, "How likely is my HOA fee to go up significantly?". If the HOA fee involves infrastructure, and there's no capital reserve fund, you could get clobbered in assessments or fee raises (if the association has the power to do so). Understand how the HOA fee is changed, who votes on it, what things it can cover and what things it does not. Obviously, if an HOA fee is in place for a common driveway and is designed to pool funds for plowing, there's not much risk that it will go up significantly (or more than any other plowing bill). But if the association is responsible for the PRIVATE ROAD, and it's in disrepair and needs to get repaved, take a close look and ask questions as to how that will get paid for.


Do you have questions about HOA fees? Contact me and I'll post them here with answers.



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Matt Heisler

*All information is posted in good faith and is assumed to be reliable, but may rely on third party information sources.