If you’re new to the home buying process or have never lived in a neighborhood with a homeowners association, you may not be aware of what an HOA fee consist of and why there is a fee to pay. For the most part, if your future neighborhood has a shared common area, it is most likely maintained by a homeowners association resulting in an HOA fee. This Realtor.com article by Lisa Johnson Mandell, explains what an HOA fee is and how it will affect you.
So what is an HOA, and how will it affect your life?
HOAs help ensure that your community looks its best and functions smoothly, says David Reiss, research director at the Center for Urban Business Entrepreneurship at Brooklyn Law School. For instance, if the pump in the community swimming pool stops working, someone has to take care of it before the water turns green and toxic, right? Rather than expect any one individual in the neighborhood to volunteer their time and money to fix the problem, HOAs are responsible for getting the job done. And the number of Americans living in HOAs is on the rise, growing from a mere 1% in 1970 to 1 in 4 today, according to the Foundation for Community Association Research. So, it’s wise to know exactly how they work.
How much are HOA fees?
To cover these maintenance expenses, HOAs collect fees (monthly or yearly) from all community members. For a typical single-family home, HOA fees will cost homeowners around the $200 to $300 per month, although they can be lower or much higher depending on the size of your unit and the services provided. The larger the home, the higher the HOA fee—which makes sense, because the family of four in a three-bedroom condo is probably going to be using the common facilities more than a single woman living in a studio.
HOA rules: What to expect
All HOAs have boards, made up of homeowners in the complex who are typically elected by all homeowners. These board members will set up regular meetings where owners can gather and discuss major decisions and issues with their community. For major expenditures, all members of the HOA usually vote.
[Read the full article here.]
