May 27, 2020 — Any time active communities come up in a discussion HOAs and their fees are always a big focus. For many retirees, avoiding those fees or finding the lowest ones can become an obsession. So, is there a central depository of the fees at the thousands of active adult and 55+ communities around the country? Alas, the simple answer is no.
But that flat response does not mean that you cannot discover what you need to know before making an important purchase like buying a home. Ongoing HOA fees and assessments are key to your decision. First, let’s talk a little bit about what kind of charges you might expect if you move into a community with a Home Owners Association (HOA) or Community Association (CA).
Fees and Assessments add up to… something
If you live in a community with an HOA you can expect to pay monthly or quarterly fees (dues), plus possible assessments. In addition, some communities have amenity fees. In places like The Villages, there are also charges to pay down Community Development Bonds. As an example, a page on the website for The Villages reports that residents pay an average monthly payment of $1017, which includes an amenity fee of $162 and a Development District payment of $190. The other charges included in the monthly total are for utilities and taxes. This estimate is for a home worth $250,000 with a Homestead Exemption. In contrast, communities with little infrastructure and few amenities the monthly fees might not even be $200. In land lease communities the fees might be higher, because you don’t own the land under your unit.
Assessments can be the biggest wild card. For example, if an unexpected major expense comes up that does not have budgeted reserves for, the residents will be assessed to pay for it. Examples are repairs and reconstruction after a hurricane, elevator replacement, sewers, roofs, roads, etc. Hopefully your new HOA has been putting money into a reserve fund for these, but surprises do happen, particularly when the Board has not been proactive and fees are kept too low.
But you do get things for your money
If you live on your own outside of a development you don’t pay these fees to an association. However, you are on your own for many of the things they usually cover: exterior maintenance, security, septic systems, driveways, the roof, taxes, insurance, and landscaping – to name a few. Then there are the amenities – if you use a lot of amenities like a swimming pool, fitness center, golf, etc. you will probably pay more to create them on your own than you would in an HOA.
No central repository of national HOA fees?
While there is no central place to find out what different residents in HOAs pay in different parts of the country, there are some surveys that give indications. A report on Trulia pegged the average national monthly HOA fee at $331 in 2015, and it is surely higher now. New York had the highest average fees, and parts of the midwest and the south had the lowest. At 32%, Fort Lauderdale, FL had the highest percentage of homes paying HOA fees. In general, the report found, the smaller the homes, the older the community, and the fewer homes in the development – the lower the fees. The fees are normally prorated based on the square footage of the home or lot. This article: “Decoding HOA Fees” has more helpful information.
How can you find out what the fees will be?
For starters, ask your real estate agent, who is required to tell you. Ask for copies of recent statements, including a history of assessments (which can be for tens of thousands of dollars when they happen). You can also ask the Community Association for this information, or the seller. Communities with professional managers will normally be quite forthcoming.
Comparison shopping is work
Unfortunately, most community websites and many HOAs will make you work to comparison shop. Some have the information on their sites … and some don’t. But just knowing the dollar figure isn’t really enough – you are dealing with apples and oranges because of the tremendous variety of what might be included. Most fees cover standard items like exterior insurance and roads, clubhouses, tennis courts, etc. But some communities charge extra for some or all amenities like golfing privileges. How much security is provided – is there a 24 hour guard gate, or nothing? Are fees being put into reserve funds, or are they hoping nothing bad will happen.
HOA fees can be a lightning rod for many people. There is a wide range – some communities offer great value for a reasonable fee, others are more expensive (and possibly are more exclusive). Before you sign on the dotted line, make sure you press your real estate agent and/or the HOA management to get a solid understanding of past, current, and projected fees.
Comments? Are you one of those people very interested in HOA fees? Were they a driving force in your purchase decision? Do you think the fees in your community are reasonable? Please share your thoughts and experiences in the Comments section below.
For further reading: