Homeowner's associations (HOAs) are extremely common in the U.S., with around 30% of the population living within one. If you live in a community with an HOA, you'll pay fees but also receive benefits.
An HOA manages a neighborhood and collects HOA fees to cover the expenses. But if you've never lived in a neighborhood with one, you'll want to learn about them before moving there.
Continue reading to learn about the costs, benefits, and structures of HOAs.
What Are HOA Fees?
An HOA fee is a monthly fee a homeowner pays to the HOA to cover various expenses. Every HOA creates its own structure, rules, and fees, and these fees don't cover the mortgage or other household expenses.
Most HOAs hire a management company to handle the organization's affairs, finances, and activities. The management firm collects the funds from the homeowners and uses it to pay neighborhood expenses.
The primary purpose of HOA fees is to maintain certain standards and amenities in the community. Without these funds, the community wouldn't be able to do that.
What Do HOA Fees Cover?
HOA fees cover a variety of expenses for a community. The HOA plans the expenses before they incur, and budgets based on the costs. Some of the expenses the fees cover include the following:
- Community clubhouse
- Landscaping
- Pool
- Exterior home maintenance and repairs
- Utilities in common areas
- Insurance for common areas
Organizations base HOA fee structures on the maintenance costs for these expenses and future projects.
How Are HOA Fees Determined?
The HOA management firm bases the fee structures on several things. First, most HOAs have a board responsible for decisions. The board and members make the decisions and create the organization's budget.
From there, they determine how much to charge the homeowners. Average HOA fees range from several hundred dollars a month to several thousand.
The actual amount depends on the neighborhood, amenities, location, and costs.
- Role of the HOA board
- Budgeting process
- Reserve funds for long-term expenses
The fee structure can change from year to year.
What Are the Benefits and Drawbacks of HOAs?
Living in a community with an HOA offers benefits and drawbacks. One of the primary benefits is the neighborhood quality. The HOA fees provide the financial support your community needs to thrive.
One of the drawbacks is the restrictions HOAs place on property owners. HOAs create rules that homeowners must follow, and every homeowner is legally required to follow these.
Learn More About HOAs
HOA fees are a routine part of living in a community managed by a homeowner's association. You can participate in the HOA by attending meetings and voting on issues.
If you're considering moving to a community like this or buying properties within one, learn as much as you can about it.
PMI San Tan is a full-service property management firm that offers HOA management services. If you have questions about HOA management, we can help.
We've served the Phoenix, AZ, community for decades and would love to hear from you. Reach out today to learn more.
