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Understanding HOA Fees

Posted on May 08, 2018 by Earl Raatz

Understanding HOA Fees Playground featured imageWhen you buy in a planned development, some will have you join the community's homeowners association (HOA) and pay HOA fees. These fees aren't just another expense; they cover the upkeep and maintenance of communal features.

While it may seem inconvenient to pay HOA fees on top of your mortgage payment, this fee comes in exchange for many conveniences you'll likely appreciate in your new community

Here's how HOA fees work, what they cover, and what you will still need to pay on your own. 

What Is a Homeowner's Association?

A homeowner's association is an organization within a planned community that sets and enforces rules. The purpose of the HOA is maintaining property values and paying for amenities that all homeowners in the community share. 

The homeowner's association is run by a board of elected homeowners to make sure everything in the community runs properly. Day to day, the HOA enforces rules, oversees maintenance and repairs, and ensures the association is financially healthy. 

Buying into a community run by an HOA can come with many advantages. As a homeowner, you can be sure that the appearance of the neighbourhood or communal buildings will be maintained without unkempt lawns and deteriorating siding. Many services are also handled by the HOA like lawn care and snow removal. This means less work for you as you will only be responsible for maintaining your property

Understanding HOA Fees Park ImageNot all HOAs offer recreational amenities, but since new developments are focused on families, many offer community centres, barbecue areas, sports courts, fitness equipment, and more. 

What Do HOA Fees Cover?

HOA fees or assessments are set by the HOA's Board of Directors to determine each owner's share of the anticipated costs for the year. Every owner of the community pays the same share, including board members. 

While every HOA has its own policies that determine how HOA fees are used, fees typically cover a wide variety of expenses that are designed to keep the property in good condition and maintain property values. Here's what your HOA fees likely cover. 

Maintenance and Repairs

A large share of the fees you pay goes towards maintenance and repairs of common areas, amenities, and equipment. This may include: 

  • Snow removal
  • Lawn care 
  • Trash pickup
  • Cleaning and upkeep of common areas like carpeting
  • Pest control
  • Roof repair
  • Elevator maintenance
  • Security 
  • Maintenance of amenities like the fitness equipment 


Your HOA should allocate a share of fees to a long-term reserve fund. This fund covers budgeted repairs and improvements that don't occur regularly. It's important to maintain a healthy reserve fund because if there isn't enough money to pay for these expenses, a special assessment must be levied against every owner to make up the difference. 

Contingency Fund

Some money is set aside every month to cover any unexpected or emergency expenses. 


Just as you need homeowner's insurance to protect your property, the association has its own master insurance policy that protects community features and the exterior. The cost of this policy is shared by all owners. 

As a homeowner, you are still personally responsible for some types of maintenance and repairs. In general, your HOA will maintain all common areas, including the building's envelope, hallways, elevators, lawns, and amenities. Owners are responsible for maintaining everything on their individual, owned property. 

Understanding HOA Fees Designer imageProperty Management

Your HOA probably has a contract with a property management company to keep your community looking and functioning at its best. 

How Special Assessments Work

HOA are typically charged monthly, however, there may be times when you need to pay a special assessment. This happens when the reserve fund isn't enough to cover expenses in an emergency. In this case, the association can levy a special assessment to pay the expense. 

As an example, if a repair needs to made to a shared amenity at a cost of $5,000, but the reserve account has just $3,000, a special assessment of $2,000 will be levied. This $2,000 will be divided among all homeowners in the entire community. 

A well-run HOA will plan for the future to limit special assessments by ensuring monthly fees are enough to build the reserve. As a general rule, older developments are far more likely to have special assessments than new developments. 

It can be easy to view HOA fees as an unnecessary monthly expense, but they are essential for keeping the entire community financially stable, clean, and beautiful. The fees you pay can also enhance your lifestyle by offering amenities you could not buy and maintain on your own, such as walking trails, tennis courts, and a fitness centre. These fees can also free you from chores and major expenses like snow removal and roof replacement. 

You're sure to find this fee is just a small price to pay for an elevated lifestyle in your community.

Click here to download the guide on how to choose a new community!

Photo credits: designers

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