Definition of "Homeowner's fee"

The definition of a homeowner’s fee is a fee that is charged to homeowners that belong to a homeowner's association. The homeowner’s fee usually includes the cost of maintenance, recreation, or other services. Homeowner's fees may be levied on a regular or irregular basis.

 

When discussing the homeowners association fee (HOA Fee) we are talking about a certain amount of money that is charged monthly by the association from the owners of properties within the community. The reason why the homeowner’s association is collecting these fees is to maintain and further improve properties and amenities managed by the association that the owners have access to. It is important to keep in mind that some properties can demand both HOA fees and condo fees. It is also important that you understand what they are used for so make sure you familiarize yourself regarding HOA FEES.

What is the HOA fee used for?

In regards to condominiums, the most common instance when HOA fees are applied, these fees are used to take care of the common areas of the building like elevators, lobbies, swimming pools, patios etc. There are some cases where the HOA fees also cover some utilities such as water, garbage disposal, and sewage.

 

When unforeseen situations arise, like the malfunction of an elevator or the need for a new roof, the HOA can demand/collect/levy specific funds, especially if their reserves are insufficient to cover the repair.

 

When it comes to single-family homes, while not a rule and not as common, there is a possibility for HOA fees. This can happen if the neighborhood has amenities that can be used by any resident from the area like tennis courts, parks, or clubhouse. Gated communities require HOA fees for their amenities as well as planned communities. It depends on the neighborhood you move to so make sure to inquire about HOA and HOA fees.

What if the HOA fee is not paid?

If an owner that lives in a home that is managed by an HOA, for whatever reason, does not pay their monthly or annual HOA fees, the HOA has the power and right to take the first steps towards the homeowner that’s late on their fees.

  • If the contract between HOA and homeowner states that late fees can be charged, then that is the first step;
  • If the contract between HOA and homeowner does not state late fees, then HOA can go to extreme measures and initiate a lawsuit, place a claim on the home or directly go to foreclose the property in order to collect their late fees.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Real Estate Terms

The definition of restraint on alienation is a limitation on the right to convey or transfer owned real estate to another party. This restriction on conveying property has an effect that ...

Derogative term describing a high-pressure telemarketing office where sales personnel often use extremely exaggerated claims as well as intense sales practices to convince targets clients ...

Investment made rationally and intelligently as would be expected by a professional person. A reasonable degree of safety and return are expected. A example is an office building with 99% ...

Tax concept whereby income not actually received is considered to be constructively received by a taxpayer and thus must be reported. An example is a bond interest coupon. The interest is ...

Process by which a lessee rents his apartment to another. ...

The equity in property because of work in it by the buyer or holder which directly increases its value. ...

Market condition in which sellers exceed buyers, thereby causing prices to fall. In real estate, declining markets may result from unfavorable business conditions and high interest rates. ...

Enumeration of the consideration given by each party to a contract which in some cases must be in written form to be enforceable. For example, the statute of frauds requires that all ...

Assets owned by an individual as part of his or her estate except for land and everything attached to the land. Personal property may be either tangible, having physical substance such as ...

Popular Real Estate Questions