More than 14,000,000 people in California live in community associations and pay homeowner association fees.
You've heard the term "homeowner association fees." Do you understand what they are and their relevance to property owners?
If you are considering buying a home in an HOA community, knowing what these fees cover and how they affect your financial planning is important.
Are you wondering exactly what HOA fees are and why they matter? Keep reading to learn how these fees impact your property and household budget.
What Are HOA Fees?
HOA fees are monthly, quarterly, or annual payments homeowners make to the community association. The fees cover property management costs such as maintenance of common areas, landscaping, insurance, amenities, and utilities.
Breaking Down HOA Fees: What Homeowners Need to Know
Understanding the breakdown of these fees plays a role when deciding to buy an HOA property.
How do they contribute to the overall operations of the association? Community maintenance charges include upkeep of swimming pools, playgrounds, common areas, landscaping, tennis courts, etc.
HOA fees cover repairs and renovations of shared facilities like clubhouses, gyms, and community gates.
Utilities like electricity, water, and trash services for common areas fall under HOA fees. Insurance is another expense required for common areas.
The last category that HOA fees cover is reserve funds for future expenses and emergencies.
Regular Fees vs. Special Assessments
Regular HOA fees are recurring payments for ongoing maintenance and daily operations. Your fees cover the amenities you enjoy as a community resident.
Special assessments, on the other hand, are one-time charges for unexpected or significant expenses. The roads may need resurfacing. A natural disaster may cause significant damage.
Factors Influencing HOA Fees
Boards of directors or property managers in the community work to determine the proper amount of money to collect in HOA fees. They base it on various factors. Let's take a look.
Size and Scope of the Community
Larger neighborhoods have more common areas, roads, and sidewalks, costing more money in maintenance fees. Smaller neighborhoods will have fewer expenses.
Amenities and Services
What types of amenities are in the community? If there are pools, playgrounds, pickleball courts, recreational facilities, a clubhouse, etc., the HOA fees will be more significant.
Sometimes services like trash pickup, internet, and television fall under HOA fees.
Inflation and Unexpected Events
Rising costs of services, labor, and materials all affect HOA fees. Things like natural disasters and significant maintenance emergencies add to fees as well.
HOA Fee Calculator
An HOA fee calculator is a tool that helps you determine your monthly or annual HOA fees based on factors such as your property type, square footage, and the assessment formula.
When creating a budget for your new home, an HOA fee calculator is a very useful resource. Having this information helps determine how much you can afford to spend on a new home.
Living in an HOA Community
Now that you know more about HOA fees and their role when you reside in a planned community, can you manage these types of expenses in your budget? It's important to look at your finances before moving into an HOA community.
We at PMI Mission Viejo manage communities in the area and can answer your questions regarding HOA fees and assessments. Contact us through our website or by calling 949.276.3099.
