What are HOA Fees?
If you’re thinking about buying a home in a neighborhood with an HOA, you may have heard the term “HOA fee” before. But what does it mean? In this article, we’ll explain what an HOA fee is and how it works so that you can make sure that buying a home with an HOA is right for your situation!
HOA stands for Homeowners Association, Condo Owners Association or Property Owners Association.
HOA’s are a group of neighbors who come together to create a community. Each HOA has its own governing documents that serve as the basis for how it operates. That includes rules governing the size of houses, colors of siding and other factors.
The HOA is managed by its board of directors, otherwise known as the homeowner’s association board (HAB). This board is made up of volunteers from within your community who are responsible for enforcing the rules set forth in your CC&Rs and managing financial affairs such as collecting dues from homeowners and paying bills on behalf of everyone living in the development.
HOA’s have their own insurance policies that cover common areas.
HOAs are designed to protect the community. They cover things like the swimming pool, common areas and roads that you share with other HOA members. They’re not designed to cover your personal property—if your car is damaged by someone else’s negligence, the HOA will not pay for that.
Likewise, HOAs don’t generally pay for damages to homes or personal property—whether it’s a dishwasher or something more expensive like a roof leak caused by faulty construction work. The only exception is if there is an issue with the HOA itself (like a clogged drain) that causes damage inside your home but outside of any common areas owned by everyone else in your neighborhood association.
HOA members can vote on which improvements and repairs the association covers.
Most HOAs are governed by a board of directors that is elected by its members. The board acts as the official voice of the HOA and handles many tasks, including:
- Setting budgets and approving expenditures for projects or repairs to common areas.
- Deciding which improvements and repairs the association covers.
- Delegating authority to committees or managers.
If the HOA makes an improvement, the value of everyone’s property goes up.
If the HOA makes an improvement to the community, it’s a good thing. That’s because your home will increase in value.
For example, let’s say that your HOA has decided to extend the sidewalk all around the neighborhood so that it includes more property owners and more homeowners can enjoy walking their dogs or strolling with friends. The investment of time and resources by the HOA increases demand for homes in your neighborhood — which raises property values across the board.
The bottom line is that HOAs are a great way to keep the value of your home high. They can also make living in your community a lot more fun!