What Are HOA Fees—and What Do They Actually Pay For?

There are two major components to a homeowners association (HOA). The first is that the organization oversees a set of rules particular to the residential community. The second component is the associated fee required for living in the community and how the HOA fees benefit the homeowners.

“An HOA fee is typically structured per community to enforce rules and regulations so it can set the covenants, conditions, and restrictions,” says Donna Soda, Realtor and global real estate advisor. “The idea is to maintain the community in a beautiful manner.”

What HOA Fees Are

Homeowners associations collect fees from residents to maintain the community as the governing body sees fit. 

“An HOA fee, or homeowners association fee, is a regular payment made by homeowners in a community with a homeowners association,” says Sarah Stone, associate broker at Douglas Elliman. “It’s used to cover shared expenses related to maintaining common areas, amenities, and community services. HOA fees are typically structured based on the size and type of property you own within the community.”

These fees vary in amount and how they’re used. They might also be called by different terms depending on where you live. 

Other Names for HOA Fees

HOA fees might be referred to by a handful of different names, including assessments or dues, Soda says. 

“In different regions, similar charges might be referred to as maintenance charges, condo fees, co-op fees (in co-operative housing), or assessments,” Stone says. 

Cristiano Soares is a real estate sales associate with Brown Harris Stevens in Miami, where he has also heard these fees called maintenance charges, strata fees, and common charges.

How Much Are HOA Fees?

HOA fees are determined by individual communities or buildings. 

“HOA management companies generally determine HOA fees, which are calculated based on operating costs and expenses for the community, for example: private roads, security gates, pools,” says Doug Jacobs, Builder Partner Manager at Opendoor. “The more amenitized the community is, the higher the HOA fees are going to be. The HOA management company is also paid for by the HOA fees.” 

In general, HOA fees are charged monthly and can range from negligible to exorbitant. Some communities charge quarterly. 

“HOA fees vary due to factors like the range of amenities, maintenance needs, landscaping costs, insurance, utilities, security, and management services provided by the HOA,” Stone says. “The age and condition of the community's infrastructure can also impact fees.”

In general, these fees are a few hundred dollars a month.

“Nationwide, the average monthly HOA fee is between $200 and $400, but they can also run into the thousands of dollars if you’re in a luxury gated community that’s in a sought-after location,” Jacobs says. 

What Do HOA Fees Cover?

Just as each individual HOA determines its fees, it also decides what those fees should cover. For many HOAs, that means maintaining common areas and features used by all. Think elevators, lobbies, or common green spaces. 

“HOA fees contribute to the overall maintenance, appearance, and quality of life within the community,” Stone says. “They help ensure that shared spaces, landscaping, and amenities are well-maintained, promoting a cohesive and attractive neighborhood.”

In other communities, those services might fall to the local government to handle, and they might not be tackled as quickly as an HOA can get them done. 

“If the roads need paving, the HOA gets it done. If dead trees in common areas need [to be] removed, then the HOA handles the removal of such trees and plants,” Soda says. 

Other HOAs focus on maintaining individual lawns. Some fees benefit each homeowner by providing certain utilities, such as cable, water, sewage, or garbage pickup.

The most significant benefits of some HOAs are the added amenities. 

“There are many amenities available to you, such as golf, a community pool/spa, tennis and pickleball courts, a clubhouse, restaurant, gym. Maybe they have social events and a social director,” Soda says. Just as the HOA pays to put these amenities in place, they’re also responsible for running and maintaining them, she adds.

“When the tennis or pickleball courts need [to be] refurbished, they call in a professional company to take care of it. If there is a community pool and spa or a clubhouse or restaurant, the HOA keeps everything running smoothly,” Soda says. “When that happens everyone wins.”

HOAs may also maintain gyms, dog parks, and playgrounds.

Keeping Tabs on Your HOA

As an HOA member, you have a right to know how your money is being used. Perhaps the most important point in which to exercise this right is when you’re deciding whether to live in the community in the first place. Be sure to take a close look at the outset. 

“When evaluating HOA fees, consider the services and amenities provided. Compare fees with neighboring communities to ensure they’re reasonable,” Stone says. “Review the HOA’s financial statements and meeting minutes to assess their financial health and transparency.”

Stone says transparency and communication are crucial for HOA members and board members. 

“HOAs should maintain open communication with residents through regular meetings, newsletters, and online platforms,” Stone adds. “Clear documentation of budget allocation, financial statements, and planned projects is crucial.”

Like any governing body, an HOA is only as good as the individuals running it. There have been some cases in which board members act in a way that doesn’t benefit the community at large. Soda suggests talking to residents before buying into an HOA community to ensure that the organization runs smoothly. 

How to Evaluate an HOA

“The best practices in terms of transparency with an HOA would be to ask questions,” Soda says. “Call the HOA company. Ask a neighbor in that particular community if living in this area with the HOA is worth it.”  

Soares suggests buyers request key documents before purchasing a home in the community. Doing so can give you insight into the health of the HOA and its ability to handle unforeseen circumstances, such as major weather events.

“I always recommend that clients request some key documents, including the current and previous year’s budget, the replacement schedule, and the amount held in reserve,” Soares says. “The reserve level is an important indication of the community’s readiness for unforeseen circumstances.”

Once you’re living in an HOA, the entity has a lot of autonomy in terms of how it governs the community, says Christa Kenin, an attorney and real estate agent at Douglas Elliman.

“A disgruntled HOA member may try to appeal to the HOA board. HOAs and their boards are private organizations, so as long as the organization is not violating federal or state or local laws, then they have lots of leeway—just like private country clubs do,” she says.

Should You Live in an HOA Community?

If the benefits of an HOA appeal to you, you might be willing to pay the associated fees, but if those fees seem expensive, you might want to reconsider. 

“Do your due diligence,” Soda says. “Some HOA communities can be very expensive. If a home buyer is not going to use the amenities that the HOA offers, maybe they are better suited outside of that HOA community.”

If you live in an HOA-regulated community, you won’t have the option not to pay fees or follow the rules, so be certain you can abide by everything laid out in the covenants, conditions, and restrictions. Many rules dictate how you must maintain your property, but others limit everything from paint color on your home’s exterior to the types of vehicles you can park in your driveway. 

Do You Have to Pay HOA Fees?

It bears repeating: If you live in an HOA-regulated community, you typically can’t refuse to join the homeowners association, and if you’re a member of the association, you must pay the HOA fees. In nearly all cases, living in a community or building with an HOA means you must pay the HOA fees. If you don't want to be a member of the HOA or pay any associated fees, you may be better off finding another community in your house hunt.

The Costs of Breaking HOA Rules

Breaking HOA rules can result in fines and foreclosure of your property. 

“Typically, monetary penalties are handed out so that an infringing HOA member would be charged ‘X’ dollars per day while in noncompliance. Harsher penalties could include restricted access to HOA amenities, such as a golf course or swimming pool or parking area,” says Kenin. 

A trusted real estate agent can help you determine whether an HOA is the right fit for you and your lifestyle.

“Along with the benefits and protections provided by the HOA often come strict rules and regulations. Some homeowners find this restrictive,” Soares says. “When working with clients considering buying a home in a community with an HOA, I recommend they consider attending and engaging in HOA board meetings. This, as well as requesting a clear outline of the HOA expectations, can guarantee homeowners reap optimal value from their HOA fees.”

Be sure to also work with the correct lender to ensure you can afford the monthly fees associated with this lifestyle in conjunction with any loans you may need.