Wednesday, August 5, 2009

What do HOA Fees Cover?

Dear Property Manager:

My wife and are about to buy a home in Fort Mill, SC. We are choosing between 2 we really like and the both have homeowner's associations. We are first-time homebuyers and we aren't really sure what the HOA fees generally cover. The two neighborhoods are similar, but the HOA fees are different. What do HOA fees cover and why could they be so different in the same town?

Mark K.
Fort Mill, SC

Dear Mark:

Congratulations on your upcoming home purchase! HOA fees generally pay for the common area routine yard maintenance, irrigation, ponds, security, street lighting, and the amenities maintenance (club houses, pools, tennis courts, walking trails, etc.), and neighborhood events.

Homeowners Associations are tasked with making sure HOA fees are being used properly for both routine and non-routine upkeep of the neighborhood. Routine maintenance may include lawn mowing and basic landscaping in the summer, and salting roads on icy winter days. And the non-routine things like if large trees need to be trimmed, the pool needs a repair, the HOA fees may be used to hire contractors.

If you are comparing two similar neighborhoods in the same town, but they have different HOA fees, then perhaps there is a 1 time up-front fee when you buy your home, larger fines, or maybe the amenities are different (i.e. one may have a small outside pool, and the other may have both an indoor and outdoor pool.).

The best thing to do is to get both HOA agreements are read them side by side and if you are still having trouble understanding the cost discrepancy, check with your Realtor and/or real estate attorney. They are both expert in home-buying and will be able to see if the costs make sense.

Property Manager

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