Money Matters: What Do HOA Fees Cover?

One of the first things homeowners like to know when it comes to living in an HOA community is how much the HOA fees are. While the board tries to minimize increases from year to year, sometimes it’s unavoidable. With fluctuations in service charges, maintenance needs, and overall finances, the board has to make sure it is able to keep the HOA running smoothly and protect the value and integrity of the neighborhood.

It is not unusual for homeowners to be upset when fees increase, but some of the frustration may come from the fact that they’re unclear about where this money is going. Being transparent about costs and educating homeowners on how assessments are used can ease tension. Here are just a few of the tasks HOA assessments go toward:

  • Community Amenities: If the neighborhood has a pool, tennis courts, club house, or other features, these need to be maintained. Fees go toward daily operations such as electricity and water, as well as any repairs or improvements. These amenities are available to everyone in the neighborhood, so everyone helps to pay for them.
  • Community Upkeep: Landscaping, exterior painting, repairs to sidewalks or roadways, and snow removal are a few of the items assessment fees are used for. These tasks ensure that the community remains safe for members and aesthetically pleasing for all. If the neighborhood looks rundown and unkempt, this can detract from home value.
  • Community Services: Some communities include trash, recycling, and sewage services in the cost of assessments. This can make services more affordable and convenient for homeowners.
  • Professional Services: The HOA may retain legal or financial services to support operations and audits. Assessments may also go toward hiring a property management company to assist with certain aspects of managing the HOA and creating higher quality living for members.
  • Reserve Funds: Some of the money goes into a reserve fund to finance capital improvements, larger projects, or emergency repairs. This can also reduce the need for special assessments should unexpected expenses arise.
  • Pest Control: No one wants to live in community infested with termites or other critters. HOA fees may go toward annual inspections and pest management services to prevent damage and safety concerns.

Although homeowners may grumble over assessments, when they understand how these fees are used to benefit the neighborhood and protect their best interests, it can decrease tensions. At the same time, the board should be diligent about reviewing expenses and looking for ways to operate more cost effectively and keep assessments manageable.

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Bryan Kuester

Bryan Kuester

Bryan is the CEO of Kuester Management Group. He has over 15 years of managing community associations throughout North and South Carolina.

His specialties include Community Association Management - maintenance, budgeting for operational and reserve funding, long-range planning, covenant enforcement, amenity management, onsite management, large scale management.