A survey taken in March 2023 showed that 91% of HOA board members and HOA management reported increases in expenses due to rising maintenance costs and inflation.
If you live in an HOA community, you may have noticed an increase in your monthly HOA fees. Did it get you wondering exactly what your fees cover?
Keep reading as we break down how homeowners' associations use your monthly payments throughout Katy, TX, HOA communities.
What is a Homeowners Association (HOA)?
Homeowners associations are non-profit organizations made up of members of a community. The HOA manages the master-planned community.
The purpose of an HOA is to keep the community well-maintained. It hires vendors to care for common areas and amenities in the neighborhood. The HOA creates and enforces rules that aim to keep property values up.
What are HOA Fees?
If you live in an HOA community, you are required to pay a monthly, quarterly, or annual fee. It's referred to as the HOA fee.
The money collected goes toward the upkeep, maintenance, and improvement of the community. Failure to pay may result in a fine or a lien on the property.
What Do The Fees Cover?
The fees cover everything that's involved in keeping the community running well and looking good, and also all the amenities the community offers. Let's take a look at the specifics.
Association Insurance
The HOA must have an insurance policy that covers all the areas for which the HOA is responsible. These include common spaces and recreational areas as well as sidewalks and trails.
Maintenance and Repairs
HOA management is responsible for maintaining and repairing all common areas and community structures. This includes things like pest control, landscaping, lawn care, snow removal, and parking lot maintenance.
Amenities and Services
Does your neighborhood have a community pool? Tennis or pickleball courts? A fitness center or clubhouse? A security gate or cameras at the entrance?
A portion of your HOA fees go toward paying for the upkeep and repair of these amenities.
Reserve Funds
Most good homeowners' associations have reserve funds. It's like a savings account for the neighborhood. Part of the HOA fees you pay end up in the reserve fund's account. These funds are for unexpected or out-of-the-ordinary expenses.
Reserve funds help pay for damage to the clubhouse roof from a storm, for example. Does the pool need resurfacing? Reserve funds will cover that as well.
Without reserve funds, the HOA manager would have to impose a special assessment on the homeowners to cover unexpected costs.
The Cost of HOA Living
Now that you know where your HOA fees go when choosing to become an HOA homeowner, you can weigh the costs versus the benefits. Remember that these fees are mandatory. Make sure the fees fit your monthly budget before purchasing an HOA property.
We at PMI Prestige are a full-service management company in Katy, TX that can assist your HOA board in drawing up a budget that works for your community and well manages HOA fees.
We customize our services to meet your unique needs. Schedule a consultation by contacting us through our website or by calling 281.712.2147.
