HOA fees are based on different factors and depend on the rules of the community. They are typically paid annually, although that can vary as well. Here are the main ways HOA fees are determined:
- Equal sharing of budget and costs: The HOA plans a yearly or monthly budget that includes things like maintaining shared areas, repairs, utilities, and more. They add up all these costs and split them among all the homeowners in the association. This means everyone pays the same amount, no matter the size or value of their home.
- Ownership percentage: In places like condos or planned communities, fees might be based on how much of the common property each homeowner owns. This is often decided by the size or value of their home compared to the whole community.
- Specific criteria: Sometimes fees are based on things like how big your home is, how many bedrooms it has, or other details that affect how much you use shared facilities.
- Management fees: If the HOA hires a company to manage day-to-day tasks, those fees are also added to the budget and shared among homeowners.
Beyond regular fees, during your tenure in the home HOAs might also ask for extra money (called special assessments) to cover unexpected costs or big repairs, like a new roof for a condo building. These extra charges are divided among homeowners.
It's important for prospective homebuyers to look at the HOA's financial papers, including the budget and fee details. This helps them understand exactly how much they would need to pay and what the money goes toward. HOA fees can vary a lot, so it's smart for potential homeowners to consider these costs when thinking about buying a home in an HOA community.