What Is a Homeowners Association and What Do HOA Fees Cover?

Considering living in a home with an HOA? Here’s what you need to know.

Communities with HOAs are common throughout the West.

Shutterstock

If you’re buying a home in a community with a homeowners association (H-O-A for short), you’re not alone. Conceived sometime last century, HOAs are now more popular than ever: An estimated 69 million people nationwide live in “common interest” communities, with California ranked among the top states in number of associations (45,400). That figure is only expected to grow.

Living in a community that’s governed by an HOA has pros and cons. You won’t have to clean the pool, but you will have to forget about painting your front door chartreuse. Here’s how HOAs work and what your HOA fees cover.

What is an HOA?

An HOA is a nonprofit organization tasked with keeping up appearances (in other words, maintaining curb appeal) and protecting property values. If you buy a home in a planned community—whether it’s in a condo/townhouse complex or a development of single-family homes—you’ll be required to join its homeowners association. 

How does an HOA work?

As a member of the homeowners association, you must follow the HOA’s rules, which are designed to keep your community safe, clean, and visually cohesive and appealing. You must also pay regular membership dues, which the HOA uses to maintain the property’s common areas and provide certain other services. (For a list, see “What do HOA fees cover?” below.)

A homeowners association has a leadership team—a board of directors—whose members are elected by residents and meet regularly. The HOA sets rules for the community, and the board oversees and enforces those rules. An HOA may forbid you (and other residents) from parking a boat or an RV in the driveway, building a fence that blocks a view, leaving holiday lights up for too long, or even housing a certain breed of dog. Rule breakers may be fined and eventually sued if the fines are not paid.

What are HOA fees?

HOA fees are dues (typically assessed monthly) that residents pay to the homeowners association. The HOA uses the money to oversee and maintain the community’s property. HOA fees essentially allow residents to share the costs of keeping their neighborhood safe, clean, and visually appealing.

How much are HOA fees?

Most HOA fees range from $100 to $700 a month, but some cost more. The dues for a luxury condo with lots of amenities in an expensive city, for example, may be $1,000 a month or higher. HOA fees also generally increase every year to keep up with inflation. 

Most HOAs maintain a reserve fund for unexpected expenses. However, when a big renovation project comes up, such re-tiling the community pool, the HOA may charge residents extra (in what’s called a special assessment) to pay for it.

What do HOA fees cover?

HOA fees cover community expenses such as:

  • HOA management

  • Amenities (such as club houses, fitness centers, and swimming pools)

  • Insurance (such as liability for the use of amenities)

  • Landscaping and exterior cleaning

  • Lighting (electricity) in common areas

  • Maintenance and general repairs of common areas

  • Parking lot maintenance

  • Pest control

  • Resolution of disputes between neighbors

  • Security

  • Snow and trash removal

  • Social events

How do I pay HOA fees?

You pay HOA fees directly to your homeowners association. They are not included in your mortgage payment.

How often do I pay HOA fees?

Most HOA fees are due monthly. However, some HOAs charge quarterly or annually.

Do I have to pay HOA fees?

Yes. Membership in your community’s homeowners association is mandatory. You are required to pay the fees. If you do not pay, the HOA may suspend your rights to community areas, charge interest on the outstanding debt, or put a lien on your home.

Whether you own or rent your home, protect your personal property with AAA Insurance.

Home Buying Definitions

The availability, qualifications, and amounts of coverages, costs and discounts may vary from state to state and there may be coverages and discounts not listed here. In addition, other terms, conditions, and exclusions not described above may apply, and total savings may vary depending on the coverages purchased. For more information regarding your eligibility for certain coverages and savings opportunities, please contact your AAA agent. Insurance products in California offered by AAA Northern California Insurance Agency. License #0175868, in Nevada by AAA Nevada and in Utah by AAA Utah. Insurance provided by CSAA Insurance Group, a AAA insurer.