Home Owner Association or HOA dues are monthly fees charged in some communities for shared amenities, insurance, or other services. These may be for houses, townhouses (townhomes), or condominiums (condos).
What do the HOA dues cost?
As of this writing (Sept 2016), the lowest amount I am seeing for HOA dues in the San Jose area is approximately $275 per month and the most about $1,000 per month. Typical is $400 to $500. If a complex offers more services or perks, or if they are low on cash and need to boost the reserve account, expect to pay more. I’ve seen several where the HOA dues were in excess of $1,000 per month.
Some condos, townhomes, or houses for sale with HOAs may disclose the monthly amount due. Be sure to also find out if there are other payments not included. I know of one complex in Saratoga that has very expensive insurance payments, making the actual monthly payment much higher than what might be stated in the MLS. So always ask if there are any quarterly, semi-annual, or annual fees due in addition to the monthly HOA dues.
Beware: sometimes younger complexes under-charge, either by accident or as an inducement to get you to buy. This is not a good thing because eventually that community will find it’s short of funds and will need to have a special assessment to get back on track.
Special assessments are a nightmare for home owners. When buying a condo, townhouse, or house in a complex with a Home Owner Association, make sure to read the very boring HOA docs carefully, and pay special attention to the reserve account. Reserves are necessary for the anticipated maintenance (such as repaving the private roads or re-plastering the pool every so often). It’s no small matter to correctly anticipate future needs, but if it’s done wrong, you may get the unhappy news of an un-anticipated assessment.
What do HOA dues cover?
The dues may cover private roads, gates, security personnel, community pools, landscaping, exterior painting, roof repairs or re-roofing, insurance (possibly homeowner’s, blanket, or earthquake), or maybe pest control work. Some HOAs include RV parking, ponds, trails, tennis courts, club houses and other more extravagant features. They will all drive the HOA fees up!
Don’t assume anything when it comes to your unit coverage. Although many Home Owner Associations will cover things like exterior painting, roofing, or pest work, they don’t all. You’ll have to read the HOA docs to know what’s covered (and what’s not).
Some nice communities with HOA dues include these: