How an HOA Works
When you purchase a property within a community association or HOA, you are joining a “common interest development”. This means that you have to pay a fair portion of the cost of the maintenance and operation of common areas in your community, shared amenities, equipment, et cetera; keeping the community spick and span has a lot to do with maintaining and enhancing the value of properties. All these services are paid for by the assessment fees payable by all owners. Dependent on the particular community, you may be required to pay annually, semi-annually, quarterly, or monthly.
The Board of Directors sets annual assessments (a.k.a. “maintenance fees” or “dues”), which calculate what each owner should pay on the basis of the predicted annual outgoings. Every year the Board of Directors will set a budget for the Association on the basis of spends over the previous years, how much they need to put into reserve/savings accounts, and any projects planned for the forthcoming year. Board members make no profits from HOA fees; they own homes in the community just as you do, and they have to pay the same dues as you.
You may be aware that you have to pay your dues, but you might not know exactly where the money goes. Each Association has specific policies and regulations, and you can discover all of these by reading your community CC&Rs and bylaws.
If you go to the Community Info section of your online account you will find your community’s budget, or you can ask your Community Manager to send you a copy by emailing them using the contact form on this site.