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What is an HOA & How Much are Fees?

By: Emily Kho
August 24, 2021

In the United States, 20% of homes are a part of an HOA. We've all heard the term used before, but what is an HOA?

HOA is the short name of a homeowners association, but what exactly does it entail? Whether you are looking to purchase or rent a home, it's worth having a better understanding of what an HOA means for you.

Thankfully, we're here to help. Keep reading for an in-depth look at all there is to know about HOAs and whether they are a good fit for you.

What is an HOA?

An HOA, by definition, is a self-governing entity within a community. The purpose of this organization that is brought together on "common interests" is to help maintain the units or neighborhood as a whole.

A homeowner within HOA communities collectively pays fees to the HOA to preserve the maintenance based upon specific terms set forth by each HOA.

A board of directors typically oversees the management of the HOA. These individuals are usually a homeowner within the community that has been elected to the board.

What is the Point of an HOA?

The purpose of an HOA is to uphold a set of responsibilities for the community for which it serves. Since HOAs can consist of condos to high-rises to single-family homes, these responsibilities can vary greatly depending on the property type. For example, an HOA of a townhouse neighborhood might be in charge of strictly maintaining the common areas. At the same time, an HOA of a condo development may oversee the management of the entire property.

Within an HOA, the properties included are governed by a specific set of bylaws and rules the association enforces. As such, property owners must pay fees to the HOA covering the allowance of their use and maintenance of common areas. Some of the areas within these communities that these HOA fees may cover include:

  • Communal lawn maintenance
  • Parks
  • Fitness or recreation areas
  • Swimming pools
  • Tennis courts

Ultimately, the point of having an HOA is to keep the appearance of a community at its best at all times. The HOA helps to ensure stable property values by maintaining uniformity and cleanliness within the neighborhood.

How Much are HOAs?

The average range for HOA fees incurred by homeowners can be anywhere from $200 and to $2,500 monthly. Of course, the fees vary drastically based on the different amenities the communities offer.

On the low end, you have HOA fees of just over $200 per month in a smaller city like Warren, Michigan. On the opposite end of the spectrum, in New York City, you can anticipate higher HOA fees closer to $600 per month. Despite New York having older buildings, the HOA fees are still higher as a generally increased cost of living in this massive metropolitan area.

Some of the factors impacting the costs of HOAs include:

  • Location
  • Age of building or home
  • Number of properties in the HOA
  • Amenities offered
  • Square footage of the residence

It's worth mentioning that, even as a renter, you may fall subject to some of these HOA fees. If the home you are looking to rent is within an HOA, the owner can decide whether or not HOA fees will be included in the rent or an additional price to be paid by the renter.

Increasing Fees

If you’re looking to rent or buy a home within an HOA, in which you will be responsible for paying dues, you should also take the time to research how the fees have changed over time. If able, you can ask for a ten-year record of the HOA fees to see how they have increased over the last decade and anticipate increases in the future for your budget.

Reserve Funds

While most HOA fees go towards maintenance of the neighborhood and payment to operate the HOA, a portion of the money gets put into the HOA's reserve funds. Standard operational costs and other community-related expenses are not to be included within the reserve funds.

An HOA reserve fund works similarly to your standard savings account. Money is allocated to this account to help pay for larger-scale maintenance projects or capital improvement projects. Some projects that the reserve funds might cover include:

  • Addition of a pool
  • New playground
  • Pavement resurfacing
  • Roof replacements

Calculating Reserve Funds

Reserve studies help HOAs determine how much is needed for their reserve fund. Certain states within the country require HOAs to conduct these studies every three years. For the conditions without legal obligation, it's still recommended for HOAs to conduct these reserve studies regularly.

The HOA's significant assets will be identified during reserve studies to analyze the remaining useful life of each individual. During this time, a specialist will also take a closer look at the financials of the HOA to determine the best options for funding. At the end of the study, HOAs will determine how much they contribute to their reserve funds.

Special Assessments

On top of annual fees, those who belong to a homeowners association may also be responsible for covering special assessments from time to time. Special assessments refer to any unanticipated issue that may arise within the community. The HOA enforces these one-time fees to help cover the costs of these unexpected and unbudgeted needs.

A prime example of these additional fees may be costs associated with natural disaster repairs around the neighborhood.

Failure to Pay HOAs

HOA fees are due on a regular schedule, just like any other bill in your home. If you do not pay your HOA fees, the board members may collect late fees and penalties. In some communities, a homeowner may be restricted from some communal regions until the costs have been paid.

The board will typically declare delinquency for anyone who repeatedly neglects to pay their HOA fees. In extreme cases, the HOA board members can put a lien on outstanding homeowners association properties, even filing for foreclosure to get the fees they are owed.

What Does an HOA Cover?

Even in HOAs where there aren’t amenities, homeowners are still expected to pay fees to help cover the costs of operating the association. The HOA in these circumstances will be responsible for the following, at minimum, within the community:

  • Safety and security
  • Shared utilities in common areas
  • Parking
  • Garbage pickup
  • Landscaping and maintenance
  • Pest control

The higher-end communities with high HOA fees offer more exclusive features, such as:

  • Gated entry
  • On staff personnel
  • Private streets

What are the Pros and Cons of HOAs?

Now that you have a better understanding of what an HOA is and how they operate, it's time to look at the pros and cons to see if this is an ideal living situation for you. For some, HOAs can provide the structure and maintenance renters and owners seek, while for others, HOAs may be too restrictive for their liking.

Pros of an HOA

First, we'll take a look at some of the primary benefits of living in a community maintained by an HOA.

Property Value

One of the most significant benefits of living within an HOA is that you can expect your property value to maintain itself. Due to the rules set forth by the HOA, which require specific appearances and maintenance of the homes within the neighborhood, you can anticipate that your property value will stay stable over time.

Exclusive Amenities

Another added benefit to having an HOA is access to exclusive amenities. Typically, the fees associated with your HOA are linked to the maintenance of specific communal amenities, such as on-site security, fitness centers, clubhouses, playgrounds, or swimming pools.

Social Opportunities

HOAs put together social events in some communities to help neighbors get to know each other. If you're looking to live in an area with a strong sense of community, an HOA might help facilitate that for you.

Mediation Board

Should any disputes arise between you and your neighbors regarding properties, you will have access to the HOA board, which will aid in the mediation. Things like fence disputes, trashed yards, or barking dogs may violate HOA rules depending on the HOA board.

Cons of an HOA

As with any living situation, there's a downside worth looking at when it comes to HOAs as well.


One of the most significant downsides to living in a community with an HOA is the costs associated. For some, the monthly or annual HOA fees can even put a home out of budget entirely. Whether you're looking to rent or purchase, make sure you are aware of the HOAs fees so you can anticipate them for your budget.


Another common gripe about HOAs for renters and owners has to do with the restrictions. While some HOAs are more limiting than others, it's important to note that some may restrict things like paint colors, design schemes, or the number of pets in your home.

Failure to Comply

In any instance that the HOA finds you are not complying with their rules, you may be subject to fines. An HOA may even put a lien on your home if you do not comply with regulations or, in more severe circumstances, fail to pay your HOA dues.

Aggressive HOAs

Unfortunately, HOAs have received a bad reputation over time, as some are incredibly aggressive when it comes to sending violation notices. Even the slightest infractions can result in violation notices, which can be burdensome for renters and owners alike.

Who Pays the HOAs - Renter or Landlord?

When it comes time to pay the HOAs, a common question is whether it falls on the renter or the landlord in rental situations. Typically you'll find that landlords cover HOA fees, but, as always, you should check your lease agreement to be sure.

More than likely, landlords will bundle the costs associated with HOA fees into the monthly rent costs. Alternatively, some landlords will have tenants pay directly. It depends on your rental situation. If ever in doubt, feel free to ask your landlord or real estate agent now.

Wrap Up - Is Having an HOA Worth It?

Living in a community with an HOA comes with a set of advantages and disadvantages, depending on how you see it. For some, the enforced structure or maintained home appearance is ideal for creating a sense of community. For others, being told what colors they are allowed to paint their home is far too restrictive.

Ultimately, deciding whether having an HOA is worth it comes down to personal preference. Whether you choose to go with an HOA or not, the next step is to register with Apartment List today. Once registered, filter through all of your rental priorities and to come one step closer to finding the apartment of your dreams!

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Emily is a professionally trained SEO writer who covers a wide range of topics but specializes in business and hospitality content. With over a decade of professional writing experience in the hospitality industry, Emily comes from a strong background in the field backed with a BS from the world-renowned William F. Read More
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