People complain about HOAs but the number of people who live in them is just increasing. In the 1970s 2.1 million lived in HOAs, now about 70 million live in HOAs according to the CAI. This is an enormous jump. Why are people constantly googling ‘what do HOA fees pay for’ and ‘why are HOAs expensive’ and ‘what does HOA stand for?’. We’re going to look at what HOA means, what condos and HOA do, and what the benefits are.
Definitions
Let’s start with the basics. HOA stands for Homeowners Association. In an HOA, the members own their own house and the plot of land it stands on. However, the common areas are owned and managed by the HOA board of directors often with the help of a property manager. It’s different from a condo because in a condo the homeowners own their own house or apartment but have joint ownership of the common areas.
Fees
So what about all the money that HOAs and condos receive, what does it do? This money mainly goes to maintaining common areas. If your HOA has grounds then they spend a lot to keep them trimmed and nice. If there’s a pool then money goes on keeping the pool clean, any other amenities (tennis courts, a clubhouse, a conference room) require maintenance. Roads need to be resurfaced, cleaned, and paved, the entry gate needs to open and close smoothly. All these things add up. If the HOA has a property manager, who is instrumental in keeping everything running smoothly then they need to be paid. If your community has management software, like Neigbrs by Vinteum, then they pay the software company. They require fees to keep everything going.
Benefits
We’ve discussed what the fees are for, but what do you get in return?
- The first thing is that you get nice amenities to enjoy, you have beautiful grounds and smooth roads, all of these increase the value of your property.
- The other aspect that increases your property value is HOA rules. These rules ensure that your property value can’t plummet because an individual or group started leaving dog mess everywhere or drawing graffiti all over the playground, or impacting the neighborhood negatively in any way.
- An HOA or condo also creates more of a sense of community and pride in your community. Your HOA board can organize events and activities to bring people together and create that sense of closeness.
- HOA and condos can mediate if there are ever conflicts between neighbors about noise late at night or your property line.
- Often basic maintenance is included, so snow removal is organized by the board, which means you don’t have to worry about it.
Drawbacks
For all the benefits that HOAs and condos bring there are always drawbacks.
- We’ve explained what HOA or condo fees are for and 99% of the time they’re justified and worth paying for. But occasionally they might be more than you’re willing to pay for. Sometimes HOAs can impose extra fees if your HOA is well managed then this shouldn’t happen, but it could.
- To have a well-maintained community you need to have rules that are followed. This can lead to people feeling resentful if they don’t have the funds to keep up the maintenance.
- While HOAs mediate disputes, it can cause them as well. A neighbor may claim you’re not following the rules properly or be annoyed that you called him out for something else.
Living in an HOA can be a really great option so you can enjoy amenities, activities and not stress about maintenance so much. HOAs do a lot for residents, and the drawbacks are often so that you can have even more benefits.
