When a community is governed by a homeowners association (HOA), residents must pay fees to the association on a regular basis. These fees cover the costs of maintaining the community’s shared amenities and services.
The size of the HOA fee varies with every state and neighborhood. They generally increase homeownership costs and can influence where you decide to buy a home. However, HOA fees can also make your community more comfortable and desirable.
Here’s a closer look at what HOA fees pay for, how they can benefit you and how much the fees cost on average.
What is a homeowners association (HOA)?
A homeowners association is a private organization that governs a defined community, neighborhood or condominium building. The HOA creates and enforces rules — called covenants, conditions and restrictions (CC&Rs) — for properties under its jurisdiction.
HOAs are usually run by volunteer residents, but some administrative tasks can be outsourced to management companies. Residents then pay mandatory dues to cover the community’s expenses and to maintain common areas and amenities.
The HOA rules and benefits can vary by community. If you’re looking at homes governed by an HOA, you’ll need to understand the fee and what it covers, then read through the CC&Rs.
Tip: Be sure to check if a home is part of an HOA before getting a mortgage to determine if the community is a good fit.
What are HOA fees?
HOA fees are regular payments you’ll make to your homeowners association. The HOA uses these fees to pay for maintenance, upgrades, repairs and recurring services, such as trash pickup and snow removal. Depending on the community, these fees can be collected monthly, quarterly or annually.
In addition to the membership dues, an HOA might periodically require special assessments to pay for expensive repairs and upgrades. These one-time fees typically arise after natural disasters, unexpected repairs or budget deficits.
What do HOA fees cover?
HOA fees can cover the development’s basic needs, such as shared utility services, as well as neighborhood amenities. The fee varies with every community. Here are some examples of what HOA dues might cover:
- HOA management company fees.
- Cash reserves.
- Electricity.
- Insurance.
- Pest control.
- Plumbing work.
- Trash removal.
- Water and sewer.
- Repairs for common areas.
- On-site security.
- Lawn care and landscaping.
- Security services.
- Snow removal.
- Swimming pool.
- Tennis courts.
- Basketball courts.
- Clubhouse.
- Dog park.
- Gyms.
Keep in mind: Generally, communities with higher HOA fees usually have more amenities and perks versus communities with smaller dues.
What are average HOA fees?
Many homeowners pay between $200 and $300 per month on HOA fees, although the national average is $191, according to the U.S. Census Bureau’s 2021 American Housing Survey.
HOA fees can vary widely depending on these factors:
- State and local laws.
- Cost of living in the area.
- Cost of real estate in the area.
- Included amenities and services.
Generally, fees go up in areas with high living costs as well as when the HOA provides more services and amenities. HOA fees can also increase when inflation rises because the costs of materials and repairs increase.
Here’s the average monthly homeowners association and condo association dues expected in several metropolitan areas:
Source: U.S. Census Bureau
Tip: When you’re looking at how much house you can afford, be sure to consider HOA fees in addition to your mortgage payments. You can use our home affordability calculator to see what your monthly expenses could look like with different mortgage amounts, HOA fees and more.
Who pays HOA fees?
Homeowners within a community governed by an HOA must pay the regular membership dues and any special assessments that come up. Residents with a mortgage are usually required to pay these fees directly to the association if the mortgage lender doesn’t set up an escrow account for this purpose.
If the house is a long-term rental property, the landlord is responsible for paying the fees because they own the home. Landlords often wrap the fee into the tenant’s monthly rent. However, the landlord might alternatively ask the tenant to pay the HOA fee as part of their rental agreement.
Can you opt out of paying HOA fees?
No, all residents living within an HOA development must pay membership dues and special assessments. The fee is part of the community homeownership agreement along with guidelines surrounding property appearance, maintenance and usage.
While an HOA is a private organization, many states allow associations to pursue legal action to collect delinquent payments. Skipping your HOA dues can potentially result in late fees, property liens and foreclosure.
If you don’t want to pay HOA fees, your best alternative is to find a home that doesn’t belong to an association. There are also communities with voluntary HOAs, where residents can choose whether to participate. However, these neighborhoods have less uniformity compared to housing developments with a mandatory HOA.
Keep in mind: You’ll need to consider how an HOA fee can affect your home affordability. Lenders typically include HOA dues in your debt-to-income (DTI) ratio, which shows how much of your income goes toward debt payments.
Generally, higher HOA fees reduce the amount you can borrow because some of your income will go toward that cost. A higher DTI ratio can also affect the mortgage rates you receive.
Are HOA fees tax-deductible?
You might be able to deduct HOA fees on your federal income taxes if the home is an investment property. You won’t be able to deduct these fees if the house is your primary residence, but state and local governments may provide a tax break.
There are also some exceptions if you occasionally rent the property. For example, you might be able to deduct your HOA fees if you live in the home during the winter and rent it out during the summer.
Tip: Speaking with a tax professional is the best way to determine if your HOA fees are eligible for a tax deduction.
Are HOA fees worth it?
Living in a community with an HOA fee can be worthwhile if you appreciate these features:
- Common areas: Shared amenities can provide access to more recreational and social features you may not have the lot size, budget or skill to maintain. For instance, a community swimming pool can be more cost-effective than a backyard pool.
- Maintenance: Condo association members may enjoy the benefits that make it easier to live in multifamily buildings. Condo HOAs typically maintain shared spaces, such as hallways, landscaping, pipes and the roof.
- Property values: Homes in communities with HOAs generally have higher property values, thanks in part to the HOA’s strict regulations. These homes are usually well-kept and maintain a uniform look and feel.
- Uniformity: Some homeowners want to live in a neighborhood with a consistent appearance and minimum property standards.
“A strong HOA creates a standardized and well-kept environment,” says Erin Hybart, a licensed real estate agent in Louisiana with HOA board member experience. “It attracts owners who value and adhere to these community standards. This can be seen as an advantage for those who want to maintain property values and a cohesive neighborhood atmosphere.”
But there are also downsides to living in an HOA community and paying dues. “If an HOA has high dues because of various amenities and you don’t use those amenities, those monthly payments can feel like throwing money down the drain,” Hybart says.
More stability for your budget: How a fixed-rate mortgage works.
Frequently asked questions (FAQs)
For single-family households, HOA fees typically cost $200 to $300 per month. Remember that these fees can vary widely depending on your location, the cost of living in the area and what amenities and services are included.
Membership is required in most single-family and condo communities currently governed by an HOA, although some neighborhoods have voluntary HOAs that permit homeowners to receive additional benefits when they join. Developers often set up mandatory associations in new communities to preserve property values and maintain uniform property standards.
If you live in a community that recently established an HOA, you might be able to opt out by submitting an appeal to the HOA board. Or you can persuade other neighbors to vote on dissolving the HOA by majority vote at a board meeting.
Potentially yes. In some states, homeowners associations can pursue legal action if you fail to pay mandatory dues. The HOA will initially levy late fees. If these fees go unpaid, the association might be able to place a lien on your property and request a court-ordered foreclosure.
This process varies by state and by the HOA’s covenants, conditions and restrictions. The eviction process is tedious and expensive, and the homeowner gets multiple opportunities to pay a delinquent balance.
A homeowners association usually has to provide notice before it raises dues, although the precise procedure depends on the CC&Rs and state laws. These governing documents can explain topics like the minimum notification period, whether a public vote is necessary and rules about the maximum potential fee increase.
Depending on the state, it might be easier to require a one-time special assessment instead of raising dues. Once again, the notification requirements and maximum levy differ by location.
Residents should review their HOA rules and state laws to determine if fee increases are legal. If not, members can challenge the fee hike and might not be required to pay the extra amount.
Living in a community that’s governed by an HOA can be a great option for some people. If you’re considering this option, ask yourself:
- Are the rules and regulations reasonable?
- Can I afford the HOA fees?
- Is there room in my budget for potential assessments?
- Will I consistently use the community benefits?
An HOA can provide benefits and help the neighborhood look pristine, says Maureen McDermut, a realtor with Sotheby’s International Realty-Santa Barbara.
“There are also, of course, multiple reasons an HOA is not worth the cost,” McDermut says. “For example, if you are an avid gardener, then an HOA community might not be beneficial, as many have rules about what you can plant, even down to specific colors. HOAs can also be strict about what color your entry door is, what type of siding you can have on your home and other details that are normally a homeowner’s prerogative.”
Many independent communities also exist without an HOA presence. You might choose this option to minimize your housing costs or to have more individual freedom.
Just remember that non-HOA communities have little or no property usage restrictions outside of state and local laws. As a result, property values could be lower and your neighbors might not maintain their grounds frequently, which can reduce curb appeal and create disputes.
