Navigating HOA Fees: What Homeowners Need to Know

Whether you’re looking to buy a home, or you’ve just purchased one, homeowners associations (HOAs) are a hot-button topic. On one hand, they can help increase property values and make sure the neighborhood sticks to a certain aesthetic. On the other hand, you can be restricted in changes you make to your own home — and you’ll pay for the privilege.

HOA fees (also called dues) are ongoing payments you can be fined for missing. This makes it important to know what you are getting into if you get a home that’s part of an HOA.

Here’s what you need to know to successfully navigate HOA fees and fines:

What HOAs Are (And Are Not)

An HOA is typically a nonprofit that’s meant to help set standards for the community and enforce those requirements, which may include things like landscaping and cleanliness. HOAs can also maintain common areas.

HOAs are quite common. In fact, about 30% of homes in the U.S. exist under an HOA, according to recent data from Ruby Home Luxury Real Estate.

If you buy a home that has an HOA, you usually don’t have the option to opt out. If mandatory, that means you’ll be required to pay the HOA fees that come along with membership. Keep in mind that HOAs are generally not responsible for homeowner responsibilities like upkeep to the house or property.

Most HOA’s have a master insurance policy that covers damage to common areas. However, you still need your own insurance for your home or unit.

How HOAs Use Fees

Your money typically gets funneled into two things. First, a cash reserve, which can be used for big, unexpected expenses or repairs. Notably, if the cash reserve isn’t enough to cover things, such as making repairs following a natural disaster, there may also be a special assessment fee, which can be especially surprising and upsetting for homeowners. For example, a homeowner in Florida recently found out they were on the hook for a special assessment of more than $150,000.

Second, funds are used for community amenities such as a pool, park, trash pickup, security and general maintenance as well as insurance for common areas.

HOA fees and community rules are enforced by the board, which is made up of members who are elected by community residents. And, typically, the amount you’ll pay is calculated using one of three calculations:

1. Everyone pays an equal share, so costs are divided by the number of homes.
2. Fees are assessed based on home size (more specifically, square footage).
3. Home values are used to set fees for each homeowner.

That said, there are often regular HOA meetings during which others can give their opinions on how to use the money and changes to make to support the community.

How HOA Fees Work

On average, HOA fees range from $200 to $300 per month. But they can surpass $1,000 a month, according to the American National Bank of Texas.

HOA dues may also be charged quarterly or even annually, depending on policy. HOA fees are generally separate from your mortgage, property taxes and insurance costs. (The exception here is for those who pay the mortgage and HOA fee via an escrow account.) Nevertheless, your lender will factor your HOA payments into the amount you can borrow for a mortgage.

But you should note that HOA fees can, and often do, increase over time. In fact, according to a recent survey, 45% of HOA members say their fees have risen in the last year, so it’s important to account for that if you plan on buying a home that’s part of an HOA.

What happens if you don’t pay your HOA dues

In the event of nonpayment, late fees with interest charges are very likely (if state regulations allow them), and those can increase the longer it goes unpaid. And, in extreme cases, it is possible that the HOA could foreclose on the home — even if you’re up to date on your mortgage payments. This is subject to state laws, though, and some places may prohibit those types of foreclosures. You should look into your state regulations to understand the possible ramifications if you fall behind on these payments.

Tips for Homeowners Who Buy a Home with an HOA

• Get a copy of the HOA financial statements: Before you buy an HOA home, reading through past financial statements can help you understand the costs you’d be signing up for by purchasing that home. It can also show if there’s a healthy reserve fund.
• Read the full HOA documents: HOAs do have certain requirements for homeowners, which vary depending on the HOA’s policies. And not meeting those requirements can result in fines (for anything ranging from not mowing your grass to being too loud after a certain time of day). So you should carefully review your HOA documents, including the bylaws and Covenants, Conditions & Restrictions (CC&R).
• Be proactive: If you know that you’re going to miss a payment or you’re not sure if making certain changes to your home will go against HOA requirements, reaching out to the board can help you get ahead of issues and show that you’re looking to work within the system.
• Set up online HOA payments: Not only will you ensure that you keep up with your HOA payments this way, but you’ll also have an electronic record of those payments.
• Review your HOA payments: Even if you’re signed up for autopay, checking in with those payment amounts is a useful way to make sure you don’t miss an overcharge or fee hike (though they are typically required to notify members beforehand).
• Check your insurance: Find out what your HOA’s policy covers and does not cover, so you can get the right coverage for your own home and property. Many home and condo insurers offer a loss assessment rider. This can often cover a special assessment that your HOA imposes after a disaster.

Written by Rob Bhatt for www.RealtyTimes.com Copyright © 2025 Realty Times All Rights Reserved. Rob Bhatt is a licensed insurance agent and joined the staff of Lending Tree in 2021. Previously, he spent more than 20 years writing for and editing regional publications in California, Nevada and Washington.