Homeowner’s Association fees also knows as HOA fees are a monthly or annual expense used for upkeep of common areas and the building when you own a condominium, townhouse of other property that is in a planned development. It is important to know what this amount is before considering purchasing a property. This helps ensure it will fit into your monthly budget when it is added to your monthly mortgage payment and other obligations.
HOA fees often range from $200 to $400 per month. In addition to covering regular maintenance, an HOA fee also covers major expenses such as a new roof or elevator. The amount of the monthly or annual fee that is above the amount needed each month is put into a reserve fund to cover those major expenses when they come up. Although if there is not enough money in reserve when these expenses come up, the owners of each unit may receive a bill for the amount of money to make up the balance.
Since HOA fees cover insurance and maintenance of the common areas, you will still be responsible for insuring your individual unit and contents, utilities, cable and telephone expenses.
When you live in a condo, townhouse or gated community, there are certain rules also called covenants, conditions and restrictions that all residents must follow. These may include what color your front door can be, type of pets that are permitted, whether you can hang laundry to dry outside and other restrictions.
If you own a home in a planned development, covenants can also dictate what color you can paint your home, what kind of landscaping you can do and the type and size of fence that can be built. They also determine what kind and number of vehicles can be parked in your driveway or in front of your home.
Each project will have a set of bylaws and covenants that outlines the fees and other requirements to follow as being part of the project. It will be important to read the bylaws and recent minutes of the association board meetings to make sure you understand what the restrictions are and if there are any pending disputes. It is also important to know how the HOA fees are determined and how they are increased.
When considering the purchase of a condominium, townhouse or planned development home, make sure you are aware of the Homeowners Association Fees or HOA requirements before completing the purchase.