Who Pays HOA Fees and What Do They Cover?

Homeowners Association (HOA) fees are regular financial contributions required from property owners within a planned community or condominium complex. These fees fund the upkeep, maintenance, and enhancement of shared amenities and common areas that benefit all residents. Their purpose is to ensure the collective well-being and property values of the community.

Identifying the Responsible Party

The property owner is responsible for paying Homeowners Association (HOA) fees. This obligation is established through the Covenants, Conditions, and Restrictions (CC&Rs) associated with the property deed. The responsibility for these fees is tied directly to property ownership; the financial obligation remains with the owner of record, whether they occupy the property or lease it to tenants.

In cases of joint ownership, such as with multiple individuals or a married couple, the responsibility for HOA fees is shared among all listed owners. The association holds all owners jointly and severally liable, meaning the HOA can pursue any or all owners for the full amount due.

Fee Obligations During Property Transactions

When a property within an HOA-governed community is bought or sold, HOA fees are prorated between the buyer and seller. This means fees for the closing month are divided based on the specific closing date, with each party paying for the days they owned the property. This proration is a standard part of the closing statement, ensuring a fair allocation of costs.

During the due diligence phase of a property transaction, both buyers and sellers must verify the current status of HOA fees, including any outstanding balances or pending special assessments. Unpaid fees from the seller can become the responsibility of the new owner if not properly addressed during the closing process. Escrow companies ensure all HOA-related debts are settled from the seller’s proceeds, providing the buyer with a clear title.

Enforcement of Payment Obligation

Homeowners Associations employ various mechanisms to enforce payment of overdue fees. If a homeowner fails to pay, the HOA assesses late fees and interest charges on the outstanding balance, as outlined in the community’s governing documents. The association may also suspend privileges, such as access to community amenities like swimming pools or fitness centers, until the account is brought current.

For persistent non-payment, an HOA can place a lien on the property, which is a legal claim against the asset itself. This lien serves as public notice of the debt and can impede the homeowner’s ability to sell or refinance the property. In cases of continued delinquency, some HOAs can initiate foreclosure proceedings against the property to recover unpaid fees, although this is generally a last resort.

Allocation and Use of HOA Fees

Homeowners Association fees are allocated to cover a range of expenses necessary for maintaining the community’s shared spaces and services. Common expenses include the maintenance of common areas such as landscaping, recreational facilities like pools and clubhouses, and shared utility costs for these areas. Fees also contribute to community insurance policies that cover common property and liability.

A portion of HOA fees is directed towards administrative costs, which include managing the association, legal expenses, and accounting services. A significant component of the fees funds the community’s reserve funds. These funds are set aside for major future repairs and replacements, such as roof replacements on shared buildings, road resurfacing, or upgrades to amenities.