What Do Homeowners Association Fees Pay For?

What Do Homeowners Association Fees Pay For?
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Homeowners Associations (HOAs) are organizations overseeing planned communities, condominium buildings, townhomes and some subdivisions. HOAs collect dues to finance their activities, which include maintenance and repairs of shared spaces, insurance, professional management, meetings and events. HOAs also enforce the bylaws by which all homeowners must abide; they collect fees when rules are broken or when dues go unpaid.

Maintenance and Repairs

The major role of a HOA is to collect dues that pay for the maintenance and repairs of common areas. Planned communities and subdivisions may have green spaces, swimming pools, playgrounds and tennis courts that need regular maintenance and occasional repairs. Townhouses might share roofs, walls, laundry areas, plumbing and yard space that also need to be kept up. Your HOA dues are calculated to cover these recurring costs and to collect some reserves for unforeseen or future capital projects, like replacing a roof, repairing flood damage from broken pipes, or resurfacing a swimming pool. If the HOA does not have enough reserves to cover these items, it may levy a "special assessment" on the community to help pay for the work.

Utilities and Insurance

Some HOAs also pay for utilities if they oversee a small condominium building or townhouse structure. Water, sewer, trash and recycling are typical utilities paid for by HOA dues. Shared space also commands its own liability insurance, which HOA dues also cover. For example, shared walls in a condo building are typically covered by the HOA's liability insurance, rather than by an individual unit owner's homeowner policy. Yard space, swimming pools, tennis courts and playgrounds must also be covered by the HOA's insurance policy.

Events and Meetings

HOAs typically hold meetings at regular intervals, ranging from once a year to once a month. Other associations hold meetings only when necessary to discuss repairs or other major undertaking. HOA fees might cover snacks or rental space for meetings. HOAs might also hold events like barbeques or holiday celebrations that are open to the entire community and financed by HOA dues.

Administrative Work

Homeowners associations are responsible for paying bills on shared utilities, overseeing finances, paying taxes, electing board members, and enforcing community rules. HOA dues help pay for administrative work like tax preparation, financial record keeping, and website maintenance or newsletter mailings.