Home Owner Association (HOA) dues can be very confusing, but definitely account for another cost when purchasing a condo, townhome, or single family home in a subdivision. When purchasing a home with a HOA, buyers must take dues into consideration when budgeting and figuring out what they can afford. Many buyers are unsure what HOA fees cover and every development is different so it is wise to investigate.
For condos this fee generally covers items like the roof, and maintenance for all common areas including gym, pool, and grounds. HOA fees may also cover the parking area, gates, elevators, and concierge staff. Some HOAs may even cover water or cable, but it almost always provides insurance “from the walls out” and homeowners are still responsible to separately insure their particular unit. For condos, the fee is usually calculated based on square footage.
Townhome coverage is very similar to condo coverage but generally lower because there is less to maintain. You do not have an elevator, a lobby, or concierge staff to maintain. Utilities of any type are mostly never included. Fees will be calculated depending on the number of amenities and size of the townhome development. Larger developments will often have lower fees than smaller ones.
I can generally guess the level of amenities in a single-family home subdivision by the HOA dues. A community with pools, tennis court, and a resident clubhouse will charge more compared to a community with only a few common areas and a resident park and playground. Many times subdivisions have a landscaped entryway with the community name that is also covered in the HOA dues. In a single-family home subdivision you will still be responsible for insuring your own home.
Before purchasing a home with a HOA and dues it is wise to request a copy of the HOA documents and financials. These documents will disclose how much and what is covered in the dues. They will also let you know about community rules and restrictions. By reviewing the financials you can gage the financial health of the association and see how much reserves have been collected for any major repairs. If you are interested in taking a leadership role you can always join the HOA board.
(Originally published for 12th&Broad: 8/25/15)