If you’ve ever considered buying an apartment, condo, town house, or home where a group of homeowners maintain shared space, then you’ve probably encountered HOA fees. But really … what do they actually cover? It can be confusing. So here’s everything you need to know about homeowners associations and the fees they collect.

What are HOA fees?

HOA fees are the dues, or amount of money a homeowner needs to pay (usually on a monthly or annual basis), that are collected by a homeowners association to help improve and maintain the common property or shared space governed by the HOA. Common areas covered by the HOA fee might include building lobbies or patios, elevators, landscaping in a gated community, or swimming pools and tennis courts. Fees will vary widely based on the property, its amenities, and which services the HOA provides.

What do the fees cover?

Since HOA fees are highly variable based on your location and its amenities, you’ll want to know EXACTLY what the fees are being allocated for up front. In addition to maintenance for common property, you may be paying for city services (like trash pickup), insurance, lawn care, pest control, and/or other maintenance or repair of shared spaces.

You should also ask about the HOA’s reserve fund, which is money set aside for “unscheduled” or unexpected expenses (like a flooded parking lot, a natural disaster, or even vandalism). If there’s an event that can’t be covered by the reserve fund, homeowners may be required to pay an additional fee, or special assessment, to cover the cost.

Do fees increase?

You should expect that the HOA fees you pay for a property will likely increase over time. And most all HOAs will increase their dues to meet budgetary needs. Because of that, it’s important to inquire about when and how fee increases are set. Look at historical information, like when increases have occurred in the past. And ask to see evidence of past special assessments. A document called a CC&R, a Declaration of Covenants, Conditions, Restrictions, and Easements will usually contain information about fee increases and set a limit for how much fees can raise annually. Some states will also limit the amount an HOA can increase its fees per year, so check with your local jurisdiction for more information on important state laws.

What about other rules for residents?

Many HOAs dictate certain rules and regulations for property owners to follow (also spelled out in the CC&R). These rules can govern many different areas — from dictating which paint colors you can use to where your park your car. Always ask to review the HOA’s CC&R before committing to buy a property.

What happens in the event of non-payment?

This will also vary from one HOA to another. Refer to the HOA’s CC&R for more information about the aftermath of non-payment. In most cases, fines will be assessed. And in extreme cases, a property lien or foreclosure may result from chronic non-payment. Be sure to find out the consequences for non-payment and if payment plans are an option if something were to happen.

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about Rebecca

Rebecca is a freelance copywriter and editor living in the SF Bay Area with her husband and two kids. She enjoys productively channeling her anxiety into safety-minded articles for home and garden, running with her robot trainer, and advocating on behalf of the Oxford comma.