Locations Experiencing Significant Increase in Homeowner Association Fees
HOA Fees on the Rise: Here's Why
It's no secret that homeowners association (HOA) fees are becoming more costly to manage, and homeowners are feeling the pinch. Let's delve into the three main factors pushing up HOA fees: insurance premiums, repairs, and maintenance costs.
Rising Insurance Premiums
Insurance for shared structures, common areas, and liability coverage can see a hike due to higher industry rates, increased property values, or changes in local regulations. As insurance costs climb, HOAs may be forced to increase fees to meet these expenses without draining their reserves[1].
Costly Repairs
Communities with aging infrastructure may require frequent repairs or replacements of essential systems like plumbing, electrical, or HVAC. Unexpected damages, such as sudden roof damage or structural issues, can lead to special assessments, as HOAs may not have the necessary funds in their reserve[2][1].
Maintenance Costs on the Upsurgence
General maintenance costs like landscaping, snow removal, and cleaning escalate due to inflation and increased labor costs. Stricter maintenance standards, especially following events like the Champlain Towers collapse, may mandate more frequent inspections and repairs, leading to higher costs[2]. Additionally, neighborhoods with amenities like pools, clubhouses, or fitness centers require ongoing maintenance, resulting in higher fees[3].
Adjusting Fees
The HOA's board of directors reviews community needs, current fees, and reserve funds to decide if fee increases are necessary. In cases where repairs or projects exceed available funds, special assessments, one-time or temporary additional fees, may be imposed[1]. Homeowners often have input through community meetings and votes on budgetary decisions, including fee adjustments[1].
[1] https://www.fool.com/the-ascent/homeowners-association/articles/what-homeowners-association-fees-cover/[2] https://www.huffpost.com/entry/what-hoa-fees-cover_l_60611419e4b0d8f349b20583[3] https://www.superlawyers.com/real-estate/california/news/ article/homeowners-association-fees-and-assessments/b30d7488-633a-4648-8c87-2fc3d283e8ba.html[4] https://www.investopedia.com/terms/a/amenity.asp[5] https://www.angieslist.com/articles/navigating-home-owners-associations-hoas.htm
- In response to the rising insurance premiums, the HOA might have to consider increasing fees to keep the reserves from depleting.
- As the maintenance costs for facilities like pools, clubhouses, or fitness centers escalate, homeowners can expect an increase in their HOA fees.
- Neighborhoods with aging infrastructure are more likely to require higher HOA fees due to costly repairs and maintenance.
- Homeowners may need to invest in personal-finance strategies to accommodate potential fee increases or special assessments resulting from unexpected damages or repairs.
- In the housing-market, it's essential for potential homeowners to understand the role of HOA fees in their monthly expenses and the factors that contribute to these costs, such as insurance premiums, repairs, and maintenance.
