If you’re buying a condo, townhouse, or a single-family home in a planned community, an HOA fee is part of your monthly cost of ownership. It’s worth understanding what that fee actually covers before you factor it into your budget.
What an HOA Fee Typically Covers
Most HOA dues fund shared building or community expenses: exterior maintenance, roofing, landscaping, common-area utilities, insurance on shared structures, and a reserve fund for future repairs. In a condo building, this often includes things you’d otherwise pay for directly, like exterior paint or a shared roof. Ask for a line-item breakdown rather than assuming the number on the listing tells the whole story.
Why Fees Vary So Much Between Buildings
A building with a pool, gym, doorman, or elevator will carry a higher fee than a small townhouse complex with just landscaping and basic insurance. Older buildings with deferred maintenance sometimes carry higher dues too, since they’re catching up on reserve funding. Two properties at the same price point can have very different monthly costs once HOA dues are factored in, so compare the total monthly number, not just the purchase price.
Reserve Funds and Special Assessments
A healthy HOA keeps a reserve fund for large future expenses like roof replacement or repaving. If the reserve is underfunded, the HOA can levy a special assessment, a one-time or short-term charge on top of regular dues, to cover a shortfall. Ask for the HOA’s most recent reserve study and financial statements before you’re in contract, and have your agent or attorney review them for red flags like a history of special assessments or pending litigation.
What to Check Before You Buy
Request the HOA’s CC&Rs (covenants, conditions, and restrictions), the last one to two years of board meeting minutes, and the current budget. These documents tell you about pending litigation, planned assessments, rental restrictions, and how the association is actually run day to day, not just what the fee is this month. In California, sellers are required to provide these documents during your review period, and it’s worth reading them closely rather than treating it as paperwork to sign off quickly.
Can HOA Fees Increase After You Buy?
Yes. HOA boards can raise dues, usually within limits set by the governing documents and state law, to keep up with rising insurance, maintenance, and reserve funding needs. Ask about the fee history over the past five years, not just the current number, so you have a realistic sense of where it’s trending.
If you’re weighing a property with HOA dues against one without, get in touch and Efrat can help you think through the full monthly cost, not just the listing price.