# Homeowners Association (HOA) Fee: Meaning and Overview

![Homeowners Association (HOA) Fee](https://www.investopedia.com/thmb/RaLrQnR5C5fbB1SO91RlfAHzTIA=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/homeowners-association-fee-hoa.asp_final-280ef47a46a84320b09f0c12e47896c1.png)

*— Investopedia / Ellen Lindner*

## What Is a Homeowners Association (HOA) Fee?

A homeowners association (HOA) fee is a monthly charge paid by some residential property owners, either monthly or yearly, to their [homeowners associations (HOAs)](https://www.investopedia.com/terms/h/hoa.asp). These fees help fund the maintenance, repair, and improvement of shared areas within a community.

HOA fees are commonly associated with [condominium](https://www.investopedia.com/terms/c/condominium.asp) owners, but they may also apply in some single-family home neighborhoods. HOA fees are sometimes referred to as “common charges” or “maintenance charges.”

### Key Takeaways

*   Homeowners association fees are monthly dues collected by homeowners associations (HOAs) from property owners.
*   HOA fees are standard for most purchased condominiums, apartments, and planned communities.
*   Some single-family home neighborhoods may also have HOA fees.
*   HOA fees are used to pay for amenities, property maintenance, and repairs. 
*   The average HOA fee typically ranges from $200 to $300 per month, depending on the property and services provided.  
    

## Understanding Homeowners Association (HOA) Fees

A homeowners association is an organization that creates and enforces rules for properties within a community. HOAs are often formed in planned communities, subdivisions, or condominium buildings. Property owners within these communities are automatically [members of the HOA](https://www.investopedia.com/articles/mortgages-real-estate/08/homeowners-associations-tips.asp) and are required to pay monthly HOA [fees](https://www.investopedia.com/terms/f/fee.asp).

HOA fees paid by condo owners usually cover the costs of maintaining the building’s common areas, such as: 

*   Lobbies
*   Patios
*   Landscaping
*   Swimming pools
*   Elevators

Fees may cover some common utilities, such as water/sewer fees and garbage disposal. The association may also [levy](https://www.investopedia.com/terms/l/levy.asp) special assessments from time to time if its reserve funds (funds set aside for major and/or emergency repairs) are not sufficient to cover a major repair, such as a new elevator or roof.

These fees can also apply to single-family houses—especially town houses—in certain neighborhoods, particularly if there are common [amenities](https://www.investopedia.com/terms/a/amenity.asp) like tennis courts, a community clubhouse, or neighborhood parks to maintain.

HOA fees tend to vary drastically, depending on the property or community. The fees range anywhere from $100 to $1,000 per month. The average, though, tends to be from $200 to $300 per month. The general rule that applies is the more services and amenities, the higher the fees.

> **Fast Fact**
>
> Some HOA rules can be restrictive, especially regarding property modifications. These rules are outlined in the homeowner’s agreement.

## Special Considerations

If a member fails to remit payment to the HOA, it affects the other members of the community. Common areas may suffer due to lack of funds, or other members may be assessed special fees to cover [maintenance costs](https://www.investopedia.com/articles/investing/091515/real-estate-investing-monthly-maintenance-fees.asp) or other expenses.

The HOA has the authority to take action against [delinquent](https://www.investopedia.com/terms/d/delinquent.asp) homeowners. The actions depend on the contract between the HOA and the homeowner. Some contracts dictate that the HOA can charge late fees to the homeowner, while others allow the HOA to initiate a lawsuit, place a [lien](https://www.investopedia.com/terms/l/lien.asp) on the property, or [foreclose](https://www.investopedia.com/terms/f/foreclosure.asp) on the owner’s property to collect the delinquent payments.

> **Important**
>
> Some associations may assess both condo fees and HOA fees, so it’s a good idea to find out how much you’ll be responsible to pay before you purchase a property.

## Criticism of HOA Fees

The main problem that people have with HOA fees is the cost. These fees can range from a few hundred to a few thousand dollars each month, based on the type of property and the amenities involved. Paying monthly fees on top of [mortgage payments](https://www.investopedia.com/mortgage/mortgage-rates/payment-structure/) and other costs, such as utilities, can put financial pressure on property owners.

Owners may even face higher fees if the [reserve fund](https://www.investopedia.com/terms/r/reservefund.asp) isn’t properly managed. Remember, these are funds that are set aside for unexpected and/or major repairs to the property. And the HOA’s board and/or management have a [fiduciary duty](https://www.investopedia.com/ask/answers/042915/what-are-some-examples-fiduciary-duty.asp) to make sure that their reserve funds are maintained and managed properly.

HOAs also establish rules related to parking or the use of common areas. In neighborhoods with single-family homes, the HOA may create rules on how often members can paint their houses, which types of fences they may have, how they must maintain their landscaping, and any other related issues. This can often ruffle feathers and create legal hurdles for both the associations and homeowners.  

## What Do Homeowners Association (HOA) Fees Normally Cover?

HOA fees generally cover the maintenance of common areas, such as lobbies, patios, landscaping, swimming pools, tennis courts, and community clubhouses. In many cases, the fees also cover utilities like water, sewer services, and garbage disposal. [Special assessments](https://www.investopedia.com/terms/s/specialassessmenttax.asp) may also apply for large repairs when reserve funds are insufficient.

## What Is the Average Range for HOA Fees?

HOA fees vary greatly, with some estimates placing them between $100 and $1,000 per month. On average, the fees range from $200 to $300 per month. The more amenities and services provided, the higher the fees are likely to be. In some cases, poorly managed reserve funds can also lead to increased fees.

## What Happens If Someone Doesn’t Pay Their HOA Fees?

If a homeowner fails to pay their HOA fees or special assessments, the HOA can take action. Depending on the contract, this may include charging late fees, initiating a lawsuit, placing a lien on the property, or even foreclosure to recover unpaid amounts.

## Why Are HOA Fees Higher in Some Areas?

Since HOA fees pay for the amenities and maintenance in a community, those prices will vary from place to place. In high-[cost-of-living](https://www.investopedia.com/terms/c/cost-of-living.asp) cities like New York, even basic maintenance will be more expensive than in low-cost-of-living cities because of higher minimum wages, power costs, and/or taxes. HOA fees may also be higher in condominiums than they are in single-family houses since the fees will pay for electricity, heating, cooling, etc. in common areas. In a recent survey, New York was listed as the highest mean HOA cost amongst metro areas, at $653. On the other end of the spectrum was Dallas with a mean of $98.

## The Bottom Line

HOA fees are common in many condominiums, co-ops, and planned communities. These fees help cover the maintenance of shared areas, such as hallways, elevators, and parking lots. They may also pay for services like snowplowing and landscaping. Homeowners should factor in HOA fees when calculating their monthly expenses, especially if they are considering purchasing property in a community governed by an HOA.

> **Article Sources**
>
> 1.  Ruby Home Real Estate. "[HOA Stats: Average HOA Fees & Number of HOAs by State](https://www.rubyhome.com/blog/hoa-stats/)."