When you find a home you love, HOA dues can be easy to view as just another number on the listing. But before you make an offer, it’s worth looking beyond the monthly fee.
What do those dues actually pay for? Have they been increasing? Could you face additional costs after you move in? The answers can affect both your monthly budget and what you ultimately pay to live in the community.
We spoke with Cassie Scramlin, a top real estate agent in Battle Creek, Michigan, to explain what buyers should investigate before purchasing a home with HOA dues.
1. What exactly do my HOA dues cover?
HOA dues are recurring fees paid by homeowners to help cover the costs of maintaining and operating their community. Depending on the association, you might pay them monthly, quarterly, or annually.
For buyers, Scramlin points out that the value of what you receive in return can vary considerably.
“It’s always good to ask for a copy of the HOA CC&Rs (Covenants, Conditions, and Restrictions) and handbook,” she explains, adding that this is where some buyers don’t take a close enough look, which can lead to surprises after closing.
HOA dues may help pay for shared community expenses such as:
- Common-area landscaping and maintenance
- Pools, clubhouses, fitness centers, and other shared amenities
- Common-area utilities
- Security
- Trash or snow removal
- Roads or parking areas
- HOA management and staff
- Insurance for common property
- Contributions to reserve funds
Before buying, find out exactly what your dues cover and what expenses will remain your responsibility. For example, one HOA might include certain utilities or exterior maintenance, while another with similar dues may not.
Scramlin cautions that even if you’ve owned a home with an HOA in the past, your new HOA terms can be very different.
The amenities matter, too. A community with a pool, staffed gate, clubhouse, and extensive landscaping will have different operating expenses than one with few shared amenities.
If you’re trying to determine whether the amount you’re being charged is reasonable, compare both the dues and what’s included with similar communities in the area. You can also read our guide explaining why HOA fees can be high and what factors influence their cost.
2. How often have the HOA dues increased?
Knowing today’s HOA dues is important, but it doesn’t tell you what you might be paying several years from now.
Before buying, ask about the association’s history of dues increases. Reviewing several years of information can give you a better sense of whether fees have remained relatively consistent or have been changing frequently.
It’s also worth checking the HOA’s governing documents, which spell out how the association operates and which rules apply to increases. Again, Scramlin warns that the process can vary depending on the association and state law, so avoid assuming that today’s payment will remain unchanged.
An increase isn’t necessarily a sign that something is wrong. HOA expenses can rise as insurance, utilities, maintenance, labor, and other operating costs increase. Associations may also need to collect more to adequately fund reserves for future repairs and replacements.
Instead, look at increases in context. Ask why dues have changed, what additional money is being used for, and whether another increase is anticipated.
That leads to another important question: Are your regular dues likely to be your only HOA expense, or could an additional bill be coming?
3. Are there any special assessments I should know about?
Your regular HOA dues may not be the only association expense you’ll encounter as a homeowner.
A special assessment is an additional charge an HOA may levy to help pay for a major project or other expense beyond its regular operating costs. Depending on the community, that could include a major roof replacement, structural repairs, paving, plumbing work, or another significant or costly project.
Before buying, ask whether the HOA has recently levied any special assessments and whether another assessment is pending or being discussed. It’s also worth finding out whether owners are still making payments on an existing assessment.
The amount matters, but so does the reason behind it. A special assessment can provide useful information about the property’s condition, upcoming projects, and the association’s ability to prepare for major expenses.
