Owning a home in an HOA community is a major achievement for most people in the U.S. Ask any of the 74 million people who live in HOAs, and they won't hesitate to tell you about the many benefits of living in an HOA.
However, there's a cost to enjoying these benefits, and it's not just the higher-than-average prices of HOA homes. We're talking about HOA fees!
Every household in an HOA must pay a monthly (or annual) fee. Together, these funds are an essential resource used for the betterment of the community.
But how is this fee calculated? Who's even responsible for managing these funds? For answers to these and more questions you might have, read on!
Exploring the Purpose of HOA Fees: What Do They Cover?
It's easy to see and understand the purpose of HOA fees.
Your community has communal amenities, such as clubhouses, swimming pools, kids' play areas, and gardens that must be well-maintained and repaired when necessary. Perhaps you also have private security guards, cleaners, and other service providers in the community, all working to ensure the HOA's residents enjoy the highest standards of living.
A big chunk of the HOA fees collected in the community goes into the maintenance of the common facilities and payment of service providers. If there weren't any HOA fees in your community, where would the funds to pay for these items come from?
Without HOA fees, there wouldn't be any funds to put towards that use, and your community would deteriorate.
How HOA Fees Are Calculated
There's no fixed formula for calculating HOA fees.
However, most community HOAs start by drawing a budget, which enables them to arrive at a final figure. This is the amount of money that will be required to pay for maintenance, salaries, upgrades, and other items. Then, this figure is divided by the total number of households in the community.
For example, if the community has an annual budget of $5 million and there are 500 hundred households, the annual fees would be $10,000 per household. This translates to about $833 monthly.
Other factors to consider when setting HOA fees include unit value and access to amenities.
Collection and Management of HOA Fees
Every HOA has a board, which is the body that's responsible for enforcing the community's covenants, codes, and restrictions. Your HOA board will, either directly or through an agent (usually an association management company), bill every household and collect the fees. It will also enforce the necessary measures, such as placing a lien on the house, for households that fail to pay the fees.
HOA Fees: The Key to Unmatched HOA Living
HOA fees are part and parcel of homeownership in HOAs. When put to proper use, these funds can turn your community into an enviable haven in the region.
The only problem is that HOA boards aren't well-equipped to manage these funds. If you sit on your HOA's board, you have the power to influence the board to outsource the function to an HOA management company like PMI Columbus.
We're a full-service property management firm in Columbus, Ohio. Our team is led by professionals who've been in the industry for over 30 years of experience.
Bring us on board, and we'll help transform your HOA community.