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What Are HOA Fees And What Do They Cover?

Last updated 03/20/2024 by

Brienne Wong
If you’re purchasing a property part of a homeowners association, you will likely pay HOA fees. The homeowners’ association (HOA) fees help cover maintenance costs and communal facilities. HOA fees are part of your monthly housing cost but are not included in your mortgage payments. HOA fees will go towards maintaining the upkeep and value of your property. Failure to pay HOA fees could lead to a lien on your property.
Buying your first home can be one of the most exciting and nerve-wracking decisions you will make. Condominiums and townhouses are usually people’s first homes. Homeowners associations oversee townhouses, condominiums, and gated communities.
There are some advantages and disadvantages to buying a home in an HOA governed community. Homeowners’ associations can help keep the property values of the community consistent. They are also responsible for maintaining the communal areas. If your home has a homeowners’ association, you will likely pay homeowners association (HOA) fees. These fees are financial contributions to the community and are distinct from mortgage payments.
Before committing to buying a home, learn more about HOA fees and how this affects your home buying process.

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How do HOAs work?

Homeowners’ associations oversee the management and maintenance of common areas within the association. They maintain shared amenities and communal spaces such as fitness centers or swimming pools.
HOA communities have boards consisting of homeowners. The board members will arrange meetings to discuss any significant decisions or issues that affect the community. For any crucial actions, everyone in the HOA has a vote.
An HOA board may work with a management company to help with operations. An HOA management company would help schedule maintenance requests, complete administrative work, and enact board decisions.
Many homeowners associations are responsible for enforcing rules for everyone in the community to follow. Homeowners’ associations have a set of governing documents including bylaws and covenants, conditions, and restrictions (CC&Rs) that everyone must follow. The rules will guarantee the maintenance of your property’s appearance, value, and functionality.

Rules and restrictions

The HOA board will enforce rules that everyone in the community abides by. Even though you own the property, you must follow the guidelines established and agreed upon by the HOA. The HOA’s bylaws and CC&Rs can have community rules on many topics, such as:
  • Pets
  • Smoking
  • Parking
  • Exteriors
  • Noise limits
  • Maintenance repairs
Violating the HOA rules can result in fines or severe consequences such as a lien or foreclosure.
If you consider an HOA-governed property, make sure you receive a copy of the HOA’s Rules and Regulations before beginning the home buying process. Since it is your home, you will want to make sure you can live within the requirements and limitations.
Understanding your personal finance and comparing mortgage rates can help you save money in the long run.

What are HOA fees?

A homeowners association fee is a monthly fee that goes straight to the homeowners association. Property owners share costs for anything related to the building or neighborhood. HOA fees are separate from your monthly mortgage payments.

What do HOA fees cover?

These fees cover costs including:
  • City services include trash removal, sewage, roads, sidewalks, and water.
  • Maintenance services and repairs for communal spaces and shared areas. This includes fitness centers, parking spaces, and swimming pools.
  • Lawn care.
  • Pest control.
  • Snow removal.
  • Insurance for the shared areas.
  • Security, including gate access.
  • The homeowners association can use a reserve fund for irregular or unexpected expenses. The reserve fund can also pay for long-term repairs such as roofs or plumbing.
Half of the HOA fees go to monthly expenses, and the other half goes to the reserve account.

How much are HOA fees on average?

HOA fees can differ depending on your neighborhood, the amenities, and the type of house you have. Every community member pays the HOA fees or dues either monthly or yearly. The average HOA fee can range from $200 to $300 a month.

Why are HOA fees so high?

HOA fees can be high depending on the size of your property and the number of provided amenities. The bigger the space or number of services offered, the higher the HOA fees.

Is the HOA fee included in your mortgage?

The HOA fee is a separate payment from your mortgage payments. Therefore, you will need to pay both a monthly HOA fee and a mortgage payment.

Do you have to pay HOA fees forever?

You must pay the monthly dues as long as you own a home that is part of the HOA.

Are HOA fees tax deductible?

HOA fees are typically not tax-deductible. However, if you own a rental property and pay HOA fees, you may receive a tax break. You can check with your tax preparer to determine if you can deduct them from your taxes.
PRO TIP – Unfortunately, joining an HOA is not typically voluntary. Once you buy a property in an HOA, you must pay HOA dues. Consider these costs when deciding if you can afford a mortgage.

Are there other fees I’ll have to pay?

Special assessments

If your building or community faces a considerable expense, your HOA will use the reserve funds to cover it. However, if there are not enough funds to cover the costs, the HOA can levy special assessments that are more than your monthly HOA fee.


If you violate any HOA rules, you could receive a fine. Your HOA’s Covenants, Conditions, and Restrictions (CC&Rs) outline the potential fines.

What happens if I don’t pay my HOA fees?

There are consequences for not paying monthly fees. For example, if you lose your job or unexpected life circumstances happen, and you cannot pay your HOA fees, you may be able to arrange a solution with your HOA.

Immediate consequences of failure to pay

The HOA would notify you of a payment failure or suspend you from using the shared common areas until you have paid your dues.

Legal consequences of a failure to pay

If you stop paying the HOA fees, the homeowners’ association can evict you, file a lawsuit, or place a lien on your property. A lien can occur after the HOA sends you warnings and enforce late payment fees.

Foreclosure consequences of a failure to pay

If the HOA has a lien on your property, it can foreclose on your home. The CC&Rs and state law permit this. Since the HOA would become responsible for paying the property taxes, a foreclosure on the property would be a last resort.

How can I avoid paying HOA fees?

Unfortunately, you generally cannot avoid paying monthly fees. You will not have to pay fees if the HOA is voluntary. However, once you own a property that is part of a homeowners’ association, you must pay the HOA fees.

Is paying for HOA fees worth it?

Yes, it is. Choosing not to pay fees can result in fines or suspension of communal spaces. Severe consequences may include eviction, a lien, or foreclosure on your property. Either result can affect your chances of getting credit in the future.

Do HOA fees cover insurance?

The HOA fees cover a master insurance policy for your community’s common areas. They do not cover your personal property, damages, or personal liabilities.

Key takeaways

  • HOA payments are monthly fees that cover expenses associated with the shared spaces of your building or community.
  • HOA payments are separate from your mortgage payments.
  • HOA fees can help maintain a consistent appearance and protect the property values.
  • Failure to pay HOA fees could result in a lien or foreclosure on your property.

7 things you should know about HOAs

1. HOA dues can change

The HOA can raise fees without your control. For example, HOA dues can increase due to inflation adjustments, the rising cost of materials, or projects that need financing.

2. The dues don’t cover everything

Your HOA dues will cover regular expenses. However, in situations that need immediate funding, such as emergency repairs, you temporarily may need to pay a special assessment. Typically more than the monthly HOA fees, the special assessment could range from several hundred to several thousand dollars depending on the project.

3. HOAs can affect your credit

The HOA can submit your past dues to a collections agency if you do not pay the monthly fee. The HOA can also place a lien on your home or result in foreclosure. While these will not affect your credit score, collection accounts and public records on your credit reports can make it difficult to receive future loans or housing.

4. You pay for things you might not use

HOA dues cover the communal spaces you may or may not use or want. You would pay for pool maintenance even if you do not use the swimming pool as a compromise for living in a shared community.

5. You probably won’t save on taxes

HOA dues usually are not tax-deductible. If you own a rental property and pay HOA dues, you could receive a tax deduction. You may also receive a home office deduction on your taxes if you have a home office.

6. You may need to pay dues at closing

Your closing papers may include HOA dues. If you are thinking of purchasing a home with HOA dues, you will need to prepare for paying any costs right in the beginning.

7. You still need insurance

HOA dues will cover a master insurance policy, but it does not cover your own home. You will need to buy homeowners’ insurance to protect your home, damages, or personal liabilities.

The Bottom Line

Having a home as a part of a homeowners’ association has advantages and disadvantages. Even though they are not in your monthly mortgage payments, homeowners association fees are part of your housing costs and can affect what you can afford. Living in an HOA community will depend on your wants and needs in a home. Before purchasing your first home, consider all the factors to find a home that best fits your wants and needs.

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