RealManage Insight

What Do My HOA Fees Actually Pay For?

by Sandra Vela Mora on Mar 3, 2020 8:42:00 AM

As a member of a Common Interest Community Association (HOA or Condo Association), you are required to share the costs of maintaining and operating the common areas of your community. Additionally, you may be responsible for shared amenities like a clubhouse or even the community shared entrance gate. You may have wondered, what exactly are my HOA assessment fees spent on and how does my community determine what to charge me? Your assessment amount is determined and set by your communities Board of Directors and each year the budget for those fees or dues is discussed during annual meetings. Boards often base their budgets on previous year expenditures, trends, community needs, and Reserve Studies. Below are some of the most common items that your HOA might be spending your dues on. 

City Services, Utilities, and Insurance

Often times, HOA's will take responsibility for paying certain shared utilities like water, gas, trash removal, sewer, and recycling for your overall community. Your fees also help pay for the community's collective utility bill. There are often times when liability insurance is included to cover communal spaces like pools and tennis courts and based on your location, some associations are required by law to carry flood insurance.

Repairs and Maintenance

The majority of the fees go towards paying for the upkeep of the property. Depending on your community these might include:

  • Lawn care and landscaping
  • Maintaining indoor common areas
  • Painting building exteriors
  • Preventive maintenance for items such as elevators, security systems, electrical systems, and plumbing
  • Pest control
  • Maintenance of pools and fitness equipment
  • Snow removal

Amenities and Services

Many HOA communities include access to amenities such as clubhouses, fitness centers, pools and golf courses. These amenities require upkeep. The HOA may also provide services such as security guards, security cameras, and valet parking. In luxury lifestyle communities these fees can be even more vital as many resort style communities offer lavish hotel style amenities including shuttle service or shared spa and saunas.

Reserve Funds

Fiscally responsible HOA's allocate a portion of fees to their reserve fund. These reserve funds cover renovation or repairs that do not occur on a regular basis, such as repairing roads, replacing a roof, or repairing pipes that burst. It is important to note that in the event of an unforeseen repair, the cost may exceed the amount in the reserve fund. In this instance, the HOA board may vote to require all homeowners to pay a special assessment to cover the cost. To learn more about assessments, visit  Frequently Asked Questions about Assessments

Administrative Cost and Staffing

All of the above must be managed by someone. Your HOA's administrative team is responsible for handling bills, finances, and coordinating taxes. They also take care of hiring and overseeing contractors and in house maintenance teams. Administrative work in a necessary expense in order for the community to run smoothly. 

Professional Property Management

Many HOA's choose to hire professional property managers to implement the policies set by the board. These managers ensure that the HOA remains financially stable and operates efficiently. Management covers a wide variety of services such as billing, financial management, and customer services, collections, organizational support, board member training, work order completion, project management, and event planning. These fees often cover the technology that your management company uses to monitor things like work orders and payments. Be sure to ask your management company what technology they are using and how it can enrich the lives of not only the board but also the homeowners and residents.

HOA Fees Vary

Fees can vary depending on the type of community you live in. For example, condominiums have more common areas such as foyers, pools, fitness centers, elevators, stairs, and postal areas that require more maintenance than a townhome in a community with a park and a pool. Generally, the more services and amenities, the higher the fees. Also, older buildings will typically have a higher HOA fee due to maintenance being more frequent.

It's important to remember that every HOA or Condo Association is different and each have their own priorities as well as unique bylaws that dictate what funds are allocated to what items. It's important that you review your HOA rules and regulations carefully and that you get as much information as possible when paying your fees. 

Financial Management Guide for Community Associations


Related posts

Tips for Maintaining Your HOA's Common Areas

Oftentimes, the look and feel of a community significantly impact a person’s decision to buy a house in the neighborhood....

Jennifer Harvey
By Jennifer Harvey - September 29, 2022
Are Dirty Dryer Vents Posing A Safety Risk to Your Community?

Many people don't realize that one of the most dangerous rooms in their home is the laundry room. 

{% video_player...
Jennifer Harvey
By Jennifer Harvey - September 27, 2022
5 Tips for Filling Vacancies on Your HOA Board

Volunteering to serve on the board of directors is one of the most impactful ways to improve your neighborhood. . Although...

Jennifer Harvey
By Jennifer Harvey - September 22, 2022