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When you reside in a property that belongs to a homeowners association, you are asked to pay regular dues. But, many homeowners still don’t fully grasp what these payments are for and how they are computed. So, what are HOA dues? And does it really matter if you stop paying them?

What Are HOA Dues?

man holding magnifying glass and analyzing financial report | what is hoa duesWhat is HOA dues? To put it simply, HOA dues are the monthly or annual payments residents make to the homeowners association. These dues go to the association’s operating and reserve funds to pay for community maintenance and improvements.

Many residents are not fond of paying dues. The most common reason for this is because they feel their contributions are not being used properly. They don’t see improvements in the community and, therefore, feel their money is going to waste. The key issue here is not the existence of HOA dues per se; rather, it is a fundamental lack of transparency. When an HOA board fails to communicate with residents, it causes suspicion and doubt.

Fraud is another issue concerning HOA dues. There have been many instances of fraud within homeowners associations. This, in turn, has made homeowners mistrust such organizations in general. The key is to be straightforward when listing what the dues cover and what they do not cover.


What Is the Difference Between HOA Dues and HOA Fees?

Some associations refer to assessments as HOA dues, while others refer to it as HOA fees. But, what are HOA fees anyway? And what is HOA fee’s difference to HOA dues? You don’t have to spend hours on end looking for the HOA fee meaning. HOA fee means just about the same thing as HOA dues. Associations use the two terms interchangeably. Similarly, if you live within a condo association, it may be referred to as a condominium association fee.


How Are HOA Fees Calculated?

Fees Wooden Blocks On Increasing Coins Stacks | hoa fee meansNow that you know what are HOA dues, you must be wondering how are HOA fees determined. It’s not like the HOA board just decides on an arbitrary amount. First, the board of directors sits down to create a budget for the coming year. They take everything into consideration — the cost of maintenance, repairs, replacements, vendor services, etc. The projected total cost is then divided by the number of homeowners in the association to arrive at an annual HOA fee.


What Do HOA Dues Cover?

man analyzing investment graph and discussing plan in meeting room | hoa assessmentsSo, what do HOA fees cover exactly? The dues can cover a wide variety of items. Depending on the state where your homeowners association is located, it will vary on what they are required to cover and what resident’s obligations are.

Before buying any piece of real estate, it is important to research your local state’s laws about HOAs and what you should realistically expect to be sure that you can afford it. Also, you then need to look over the contract you are signing listing your HOAs rules so that you can be sure that you are in compliance. By doing so, you will have no unfortunate last-minute surprises.

Here are the most common items covered by homeowners association fees:

  • Common area utilities
  • Landscaping
  • Cleaning or trash removal
  • Parking lot maintenance
  • General maintenance of community amenities
  • Snow removal
  • Security


Do I Have to Pay HOA Dues?

close up hand of business giving or paying money | hoa feeResidents like you are bound by the contractual obligations you sign. If you are living in a community that has a homeowners association, then you need to follow their rules. That includes paying your dues on time. Residents can also be charged a late fee for not paying their HOA fees on time.

What this means is that you will have to pay your dues and if you do not, your failed payments may be sent to a collection agency, which will hurt your credit score. In more serious cases, an HOA can file a lien on your property. While this may not interfere with your day-to-day life, it will make it harder for you to sell your home in the future. Additionally, if the HOA decides to foreclose on that lien, you may be left without a home.

As you can see, paying your dues is important if you opt to live in a community that has an active HOA that collects HOA or condos association fees. If you don’t want to pay HOA dues, then maybe it’s better not to move in.


What Rules Will My HOA Have?

HOAs have a wide variety of rules and that will depend on the community that you are living in. Even though you are required to pay HOA dues, you still do have to follow their rules that are enumerated in the contract that you will be signing. Some common examples of rules include:

  • Parking
  • Pets
  • Smoking
  • Landscaping responsibilities and restrictions
  • Maintenance requirements
  • Noise limits
  • Subletting restrictions
  • Modifications and visual attachments to your property\
  • Using your home as a business

As a resident in an HOA, you must stay away from the rules and regulations governing your community. These can typically be found in the association’s governing documents, which you can request a copy of. Typically, though, an HOA board will provide you with a copy of these documents when you first move in. Some boards also make them available online.


A Responsible Homeowner in an HOA

Now that you know what are HOA dues, you have a better understanding of their purpose. As a homeowner living within an HOA, it is part of your responsibility to diligently pay HOA fees. After all, you signed an agreement with the association when you decided to purchase the property. If you feel unsatisfied with the way HOA dues are computed or collected, you can always take it up with the board. The foolish thing to do would be to rebel and refuse to pay HOA fees.

One of the most complex aspects for HOAs is to find ways to organize collecting HOA dues and reminding those residents that are running late on their payments. If your association is facing the same issue, it may be time to partner with a professional management company. In that case, we are just one call away.