What Do HOA Fees Cover? (and Are They Worth It)

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By Clever Real Estate Updated March 7, 2023


HOA fees pay for common areas, building maintenance, and other shared expenses, but can vary widely based on the size of your home and the associated amenities. Here’s our comprehensive guide to what they do and don’t cover.

What Do HOA Fees Cover? (and Are They Worth It)

One of the most difficult aspects of owning a home is the maintenance. Not only are you responsible for a steady stream of upkeep like cleaning your gutters, painting, and landscaping, but you also have to deal with unforeseen issues. If your furnace breaks down on Christmas morning, there’s no landlord to call. You have to get on the phone and find someone who’ll come out and, more to the point, you’re the one who’ll have to pay for the work.

Living in a condo or planned community with an HOA is one way to escape some of the stress and responsibility of owning a home. Of course, this convenience comes at a price that’s due in the form of HOA fees.

What Is a HOA?

HOA stands for "homeowners association" and it’s simply a governing body that’s responsible for the upkeep and maintenance of the shared areas of a building or development. In many HOAs, members are elected by the homeowners themselves, which mean that if their performance is unsatisfactory, they can be voted out.

Other HOAs are filled and managed by outside contractors, which can be more problematic for homeowners if there are problems with their work.

The HOA jointly decides how to deal with maintenance and upkeep of the property. The money they use to pay for this work is drawn from the HOA fees, which each homeowner has to pay.

How Much Are HOA Fees?

The average HOA fees for a single-family home are between $200 and $300 a month, according to Realtor.com. But they can vary widely, depending on the building. For example, a condo in Iowa with no pool or gym charges only about $100 a month in HOA fees. On the other end of the spectrum, a luxury development in Los Angeles that offers a 24-hour concierge service, spa, gym, and valet parking charges $3,400 a month in HOA fees.

Your fees will likely be in proportion to the size of your home and the amenities available to you.

Where Do HOA Fees Go?

HOA fees are generally split up, with one half going towards monthly expenses like trash removal, landscaping, building utilities, and other shared expenses. The other half goes into a reserve fund, which is for large emergency expenses like repairing burst water pipes or fixing elevators.

Be aware that not every HOA splits fees like this. Some HOAs charge lower monthly fees and then, in the event of a large emergency charge, splits it among members of the association with a special assessment bill, which is paid on top of the monthly fees. Make sure you know which arrangement your HOA uses before you buy, so you won’t be taken by surprise.

What Do HOA Fees Cover?

If you live in a condo building or planned development, there are shared areas like the front desk, gym, community room, or parking garage that have to be looked after. The HOA fees cover this maintenance. There are also expenses associated with security staff, building utilities, front desk staff, and landscapers. All of these expenses are paid from HOA fees, as well as things like insurance or these common areas.

If you’re looking at a building with amenities like tennis courts or a sauna, keep in mind that you’re going to be paying for those amenities whether you use them or not. So do your research and make sure you end up paying for something you actually want and will use.

You can also look into comparable buildings and find out what those buildings charge for HOA fees, and what owners get for those fees. Not all HOA fees are great values, but once you join, it’s very difficult to renegotiate.

One thing that HOA fees don’t cover? Typically, they don’t cover property taxes, so make sure you handle that yourself.

Don't pay more for HOA fees than necessary.

A Clever Partner Agent knows which condos offer the most for your money.

Will My HOA Fees Go Up?

Typically, yes. HOA fees rise due to simple inflation or if the HOA wants to fund renovations or new projects. Even if you oppose these new expenses, you’ll still have to pay the increased fees.

One way to get an idea of how your HOA fees might go up is to ask for a history of the HOA fee changes before you even move in. Many HOAs also schedule their HOA fee increases three to five years in advance, which they’ll share with you upon request. Make sure you do this research when you’re calculating your long term budget.

What If I Don’t Pay My HOA Fees?

Penalties can be strict. You could be fined, taken to court by the HOA, or they could even place a lien on your property. In some cases, the HOA could even foreclose on your property for nonpayment.

Are HOA Fees Worth It?

That depends on how much they are and what you’re getting for that money. Generally, they’re a fair price to pay for not having to worry about maintenance or upkeep, but always do your research to make sure you’re getting a fair deal. Nothing can sour that "new condo" honeymoon period like finding out that people in the building down the street pay half the HOA fees but have twice the amenities.

Finding the right condo for your budget and your tastes is never easy; partnering with a great local real estate agent can make things far easier. They’ll have a deep, instinctive knowledge of the local market, and will be able to advise you on everything from typical HOA fees for your area to which buildings have the best amenities.

Clever Partner Agents are top performers in their markets and come from top brands and brokerages. They're experts in finding you the best price on your dream home or condo, but the savings don't end there. Eligible buyers may also receive Clever Cash Back - a check that's all yours, no matter how you want to spend it.

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