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HOA Fees: What Are They, What Do They Cover And What Happens If You Don’t Pay?

7-Minute Read
Published on September 24, 2021

Homeowners associations have a somewhat complicated reputation for stifling homeowner freedom, starting legal battles and even creating security hazards in the name of preventing residents from having under-the-radar tenants.

HOAs have a couple of intended purposes: to keep shared spaces within a community maintained and to create rules that prevent a single homeowner from making a change to their home that lowers everyone’s property values. For the majority of HOA-governed communities, these associations do those jobs well, with minimal toe-stepping.

Typically, you’ll be required to join an HOA if you move into a condo or townhouse, but many neighborhoods with single-family detached homes are governed by HOAs as well.

While there are certainly benefits to living in a community that keeps your roads plowed in the winter and prevents your neighbor from painting his house Vantablack, living in an HOA-governed community isn’t free and can in fact be a pricey line item in your monthly housing payment (to say nothing of any unexpected “special assessments”).

Thinking about moving into a community that’s governed by an HOA? Here’s everything you need to know about HOA fees, including what they cover and how much they’ll cost you.

What Are HOA Fees?

An HOA fee, also known as a homeowners association fee, is an expense that owners from a specific residential property or district must pay. Simply put, a homeowners association fee is money typically paid monthly by homeowners living within the HOA community to help maintain all properties, amenities and common areas within the association.

There are a variety of different services and costs that can make up your HOA fees, and the services that an HOA offers will vary depending on the community’s needs. If you’re looking at a variety of homes in different HOA communities, you can compare what each one offers and decide which HOA’s offerings (and rules) best fit your needs.

What Do HOA Fees Cover?

Every HOA community is different. When house hunting, it’s vital that you request a copy of the HOA’s rules and regulations, known as the Covenants, Conditions and Restrictions (CCRs), from the seller. This is so you don’t end up joining an association that is more restrictive than you want and so you know what kinds of services to expect your monthly dues to cover.

Some of the costs that can be paid for by members’ monthly HOA fee payments include:

  • City services: Civic amenities such as trash removal, water and sewage are often included in HOA fees, meaning you’ll have fewer monthly bills to keep track of.

  • Insurance: This only includes insurance for damage to areas within the purview of the HOA, such as common spaces or the outside of the building if you live in a condo. You’ll still need an individual insurance policy to cover everything you’re responsible for, including the inside of your condo or the inside and outside of your own townhouse or detached home.

  • Lawn care: What this includes will depend on where you live. If you live in a detached home or townhouse, you’ll most likely be responsible for your own lawn care (though your HOA may have standards for lawn maintenance and how tall you can let your grass grow). Common areas that require lawn care and gardening will be taken care of by the HOA. Snow removal for shared roads and parking lots may also be included as part of your fees.

  • Pest control: If a building frequently experiences pest problems either in common areas or throughout the building, your fees may include the cost of pest prevention and control services. Detached homes or townhouses are less likely to have this inclusion since these types of homeowners tend to be responsible for their own pest problems (although townhouse CC&Rs may have some provisions for this, since residents who share walls are likely to share pests as well).

  • Maintenance and repairs: A part of your monthly fees will also be allocated to maintaining and repairing common areas and shared structures. This can include the outside walls and roof of the building (if you’re in a condo), parking lots and neighborhood roads.

  • Amenities and services: Some HOA communities include access to amenities such as a pool or fitness center for all the residents. The HOA may also provide certain security services, such as restricting access to the community or condo with a gate or doorperson, a security guard on-site or simply ample lighting and security cameras installed. High-end communities may include features like a concierge, valet services, luxury fitness centers staffed with attendants or trainers or even a relaxing rooftop lounge. As you could probably guess, these types of communities have the highest HOA fees, often exceeding several thousand dollars per month.

  • Reserve funds: A portion of the fees you pay will be set aside into the HOA’s reserve, which is a savings account that the association can dip into for unexpected or irregular expenses. This means that, ideally, if the clubhouse roof reaches the end of its life or the pipes burst in the laundry room, the HOA will have enough money to pay for these things. If your HOA doesn’t have enough saved up (either due to poor planning or an unusually large cost), the board may vote to require all homeowners in the community to pay what’s called a special assessment to cover the costs. Before moving into an HOA community, be sure to read the rules to see if there are any restrictions on how often or for how much the association can impose a special assessment.

While nobody likes adding extra expenses to their monthly budgets, HOA fees often cover budget items that you would’ve ended up spending money on anyway and may even present an opportunity for you to save money on some things.

For many, sharing the cost of a new roof with their neighbors or being able to save money on a gym membership by using the fitness center offered by their condo makes living in an HOA-governed community and paying the monthly HOA fees worth it. The services covered by HOA fees can also be extremely helpful for those who can’t or prefer not to take on some of the more labor-intensive aspects of homeownership, such as maintaining a lawn.

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How Much Are HOA Fees On Average?

HOA fees can vary widely depending on where you live, what type of home you’re in and what your HOA offers. A monthly HOA fee could be less than $100 or more than $1,000. Typically, they’ll be $200 – $300 per month.

When you’re house hunting, be sure to learn what the monthly fees are for any HOA communities you’re considering. It’s not enough to be able to afford the mortgage payment on a given house – you have to pay your HOA fees, so it’s vital to factor that into what your actual monthly costs will be.

Are HOA Fees Tax Deductible?

No, HOA fees are not tax deductible if the property is your primary residence. However, if you purchased the home as a rental property, you can deduct HOA fees since they’re considered a rental expense. If it’s a rental property that you inhabit for a portion of the year, you can still deduct the fees, but only for the time frame that the property was rented out.

If you find the cost of your HOA fees to be burdensome, your best option may be to join the HOA board yourself and start looking for areas of the budget where the HOA may be overpaying for certain services.

Are There Other Fees I’ll Have To Pay?

There could be. HOA membership doesn’t come cheap.

Special Assessments

HOAs are notorious for imposing special assessments, or charges, to homeowners to meet the expenses of both unplanned and necessary renovations. A part of your monthly HOA fees should be kept in a reserve account to save up for planned renovations, although the amount often falls short of what’s needed. In those cases, when the clubhouse roof needs to be replaced but the reserve fund is short of the necessary funds, homeowners will have to make additional payments to cover the expense.


If you fail to comply with HOA rules, you could be fined. The range of possible fines should be discussed in the CC&R. Thought no one would notice if you picked a shade just a little different from the colors approved by the HOA? Think again.

What Happens If I Don’t Pay My HOA Fees?

Immediate Consequences Of Failure To Pay

If you miss an HOA payment, you’ll receive a notice that you failed to pay. In most cases, a late fee will be added to your amount due. If you don’t pay within 30 days, the amount of that fine may be increased and you may have your HOA privileges suspended. In other words, you may not be able to use the pool or clubhouse. After that, you can expect the HOA to take legal action against you.

Legal Consequences Of A Failure To Pay

HOAs have a few different legal options if you decide to stop paying the fees you agreed to pay when you joined the community. The association may file a lien against your property, pursue a lawsuit against you or even foreclose on your home.

Lawsuits are expensive for everyone. In 2012, a Tampa, Florida judge awarded homeowners damages plus costs in a lawsuit they’d brought against their HOA. The lawsuit arose out of a special assessment of $2,212 the couple was charged for lawn care. The lawsuit went on for 12 years and finally settled in the homeowners’ favor. The homeowners spent $222,000 on litigation – most of which the HOA was forced to reimburse – costing other homeowners within the complex an extra payment of $600 per month over 5 years.

While this is an extreme example of an HOA run amok and homeowners with the financial resources to prove a point, it also teaches a lesson about how expensive legal action is and how it can get out of hand.

Foreclosure Consequences Of A Failure To Pay

Some states have restrictions on when an HOA can initiate a foreclosure on a resident’s property, but in states with no restrictions, an HOA can foreclose on a home over just a few hundred dollars.

Some HOAs may be more forgiving, offering payment plans to homeowners who are late on their payments, but you shouldn’t assume this will always be the case. It’s important to read up on all the association’s rules on late payments and foreclosure before you join, so you don’t get surprised with a foreclosure over a $200 HOA bill.

The Bottom Line: Final Thoughts On HOA Fees

Whether living in an HOA-governed community works for you depends on your needs and preferences. Those who want to have total control over their home and what they do with it might feel stifled in a neighborhood that dictates what color their front door can be painted, whereas others might find it convenient to have some of the responsibilities (and headaches) of homeownership taken off their shoulders – all while still maintaining many of the benefits and freedoms of owning their own home.

As you enter the home buying process, be sure to consider these pros and cons so that you close on a home in a community that fits your wants and needs.

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Call our Home Loans Experts at (800) 251-9080 to begin your mortgage application, or apply online to review your loan options.

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