What Your HOA Fees Should Cover
When it comes to joining an HOA, it is common to wonder where the fees are going. Sure, you can see some aspects of what an HOA does to help a community. However, in this article, we are going to cover some of the specifics of where the association fees are used.
There will also be some great questions that someone can ask before they join a homeowners association to ensure they have all the information about any upcoming events or changes.
HOA Fees Vary Widely
There are no set fees that a homeowners association has to charge. These fees and schedules are decided by the board members and votes. However, some aspects of an HOA and fees have to be upfront and below we will suggest some questions you can ask to know details and not be caught off guard.
The average HOA fee was found to be around $330 per month. It will all depend on the community, state, and area that a person is living, which will affect what the fee will be.
Another aspect that will affect it will be the amenities that a community offers. With more facilities, there will be a higher price to pay.
Good Questions to Ask Before Joining an HOA
Below are some excellent questions that any new homeowner should ask before joining an HOA. It’s essential to be an informed member, and these questions will help you know the basics and unique information to assist in planning.
Question #1: “The HOA Fee, What is it currently and what has it been in the past?”
Asking this question will help you know what the current fee is, and what it’s been in the past. By understanding the past fee costs, you will be able to see how prices have either stayed the same or risen. If the fees have gone up, ask for the reasons, and a good HOA will be able to answer this and give details quickly.
Asking about any future planned fee increases is also a fair question. If fees are already prepared to increase, this can help you plan and know what to expect in the coming months and years.
Question #2: “Are there more planned increases?”
Even if the next fee increase is planned, asking if any other increases or adjustments are also planned. This will help you see how organized an HOA is and have more information for yourself in what to expect with finances and planning.
Question #3: “What do my fees cover?”
Being informed about where the money you give in fees is being spent or saved is your right as an HOA member. Asking about where fees are being used is not only gaining great information but will help you see that the money isn’t being wasted or misused.
Things to analyze when asking these questions is to note what is included. Some communities include garbage pickup in their HOA fees or other special amenities that would cost more. Overall, an HOA is in place to keep a community at it’s best and benefit the homeowners in the association.
Other HOA Fees Can Apply
Being aware of how emergencies are taken care of is important. Aside from asking about the HOAs reserve fund, finding out how situations, where there is not enough funding, is taken care of is important.
Question #4: “How large is the HOA reserve fund?”
Finding out this information will help you estimate if an emergency came up would the HOA rely on a reserve fund or emergency systems to obtain the funds from members.
For new associations, the reserve fund may not be as substantial. A homeowners association that is established should have a proper reserve fund unless an emergency recently happened that diminished the funds.
Clark Simson Miller Can Make Your Financial Management Easy
For homeowners associations that decide to bring in a management company to handle the logistics of an HOA can make answering these questions easy. Having a manager or company like CSM ensures these aspects are being taken care of and knowledge to answer questions can make things simple.