What Do My HOA Fees Actually Pay For?
If you live in a condominium or residential neighborhood in south Florida, chances are you are part of an HOA, or homeowners association. This means you pay dues monthly or annually to a neighborhood fund. The HOA fees are used to pay for…well, what do our HOA Fees actually pay for?
In this article we’ll talk about the most common uses of HOA Fees and how those dollars are spent. This should give you a general idea of how money in Associations can be used, but is not exhaustive.
Keep in mind that every Association is different and has unique needs. Similarly, bylaws for spending or allocation of funds also varies from HOA to HOA. Consult your Board of Directors for more specifics concerning your property.
This is perhaps the most obvious use of HOA fees, and typically the largest expenditure of funds. Property upkeep includes general property care. This usually has an emphasis on physical property features.
A few of the largest costs from HOA fees include the following:
- Building Exteriors
- Common Area Maintenance
- Streets and Roadways
- Club Houses or Gyms
- Janitorial Services
- Pest Control
- Pool Maintenance
Third Party Costs
It would be nice to think that the entirety of HOA Fees go towards tangible improvements to your Boca Raton neighborhood or condominium. However, we live in a capitalist free-market system in the USA. Inasmuch, a large portion of our HOA Fees must return to this system to keep it functioning.
Typically, HOA fees must cover taxes, legal fees, and other federal, state, county, and city expenses incurred by the Association. This might also include a variety of administrative fees, insurances, accounting services, or utility fees.
Contact your Board of Directors for a complete list of the third party costs that your community Association pays on both quarterly or annual basis.
Amenities and Services
If your HOA or Condo Association is located in Boca Raton, Highland Beach or Delray Beach, Florida, chances are that the property has some form of amenities and extra services for residents.
If your property is categorized as a luxury or resort property, it is likely that portions of HOA fees pay for these amenity services.
Some amenity related expenses from HOA Fees include:
- Pool or Beach Access Maintenance
- Security Guards
- Shuttle Services
- Valet Parking
Many HOA and Association funds can deplete quickly being spent on unexpected repairs or maintenance. For this reason, it is prudent to create a reserve fund account.
When an Association is faced with unexpected costs, a reserve fund can cover or offset these surprise expenses.
If your HOA Fees do not include small contributions to a reserve fund, many times residents and homeowners are faced with ‘special assessments,’ or incur extra HOA costs. This can create stress for homeowners and residents.
We suggest including a regular minimal HOA Fee as a contribution to a reserve fund. This way if your neighborhood is faced with unanticipated expenses, residents and homeowners are not as heavily burdened.
Property Management Services
A final area of consideration is property management service. If your HOA or condominium works with a local property management company, certainly that service is associated with a cost. For this reason, HOA fees may also encompass property management services.
It is our business to ensure the smooth running of your HOA and condominium in south Florida. Our 30 years of experience in the industry equip us with skills to effectively manage HOA budgets and support the smooth running of your Association.
We can support your condominium or HOA in managing property upkeep, third party costs, amenities and services, reserve funds, and much more.
“What Do My HOA Fees Actually Pay For?”
Although dispersal of HOA Fees varies from property to property, we’ve found that property upkeep, third party costs, amenities and services, and reserve funds are among the most common uses of HOA Fees.
Call today to learn how GPM can support your HOA needs.