Part of the appeal of living in an HOA is having access to useful onsite amenities, although these perks aren't cheap. Every year, Colorado's 2.4 million HOA residents pay $5 billion in HOA fees to live in these popular communities.
These fees, along with restrictive community rules, are sometimes considered among the negatives of living in an HOA, but they're vital for maintaining the value and appeal of these communities.
Understanding HOA dues is an important consideration for homeowners contemplating investing in a home in one of these communities. Read on to find out more about these homeowner association costs and why they're so important.
What Are HOA Fees?
Every HOA community is managed by an HOA board. These volunteers oversee everything involved with the smooth running of their community, but they need money to carry out these tasks.
One of the HOA board's major responsibilities is setting up an annual budget to cover these costs. Each homeowner must pay their portion of these expenses in the form of HOA fees.
Like property tax and homeowner's insurance, HOA fees are an ongoing expense that property owners must pay either monthly or quarterly. In most cases, these costs are much less than it would cost the homeowner to provide themselves with a similar standard of living.
Special Assessments
HOA fees usually remain relatively consistent, but they rarely bring in enough income to pay for unanticipated repairs or major upgrades. When the HOA board needs to pay for these types of expenses, they calculate a special assessment to cover the related costs.
When this happens, homeowners must pay the special assessment amount in addition to their regular HOA fees. Some HOAs set up regular special assessments to build up a reserve fund for these extra expenses.
HOA Community Fees Breakdown
Most HOA communities give their residents access to a range of onsite facilities. These include:
- Swimming pools
- Community centers
- Golf courses
- Gardens or parks
HOA fees pay toward the upkeep of these amenities as well as general aspects like road maintenance, snow management, and trash removal. Living in an HOA community means homeowners share the costs and effort involved in these ongoing tasks.
For many homeowners, these benefits of HOA fees are worth the extra monthly expense.
Consequences of Unpaid HOA Fees
The HOA board must collect HOA fees from every homeowner on time every month to keep the community running at its best. Unpaid fees can cause the HOA to fall into disrepair and erode residents' quality of life.
When homeowners don't pay their HOA fees for months on end, the HOA places a lien on their property. If the fees remain unpaid, they can take harsh steps to recover these amounts.
As a final measure, the HOA can take legal action against homeowners for unpaid fees and even foreclose on their properties.
Effective Property Management Ensures HOA Prosperity
HOA fees are a vital source of income for effective HOA management, but they can prove troublesome to collect and administer. Hiring an HOA management partner is the best way to ensure timely and effective HOA fee collections.
PMI Denver Metrol is an established local property management company specializing in community association management. Our father-son team has over a decade of experience in local real estate and is fully committed to helping your HOA thrive.
Browse our blog for more HOA management tips and learn how we can help you take your community to the next level.
