When owning a condominium, owners have to pay Home Owners Association dues, typically on a monthly basis. The dues are mandatory and the HOA has the ability to put a lien on your property for unpaid dues and to even foreclose.
So since owners have to pay them, how do they benefit the individual owner? HOA dues usually cover: building exterior maintenance, landscaping maintenance, amenity (such as pool) maintenenance, garbage collection, exterior utilities (like parking lot lighting, irrigation water), hazard insurance for the structures, and liability insurance. Depending on the particular condo complex dues can also be used to pay certain utilities that owners individually or collectively use. It's fairly common for dues to include the owners' water and gas bills.
Dues can change as the needs and budget of the HOA change. A common need that comes up is an improvement to the complex. These can be repaving the parking lot, a new roof, repairing the pool, etc. When these items come up the HOA will need to obtain the funds by raising dues if the money isn't already in reserves. This is always a question to ask of the HOA when thinking about buying a condo, Do they forsee any capital improvements coming up and/or are dues scheduled to go up?
As you can see dues take care of many things that an owner of a single family home would have to pay for themselves. And the hazard insurance policy that a condo owner pays for is extremely low compared to what a single family home owner pays.
More questions on condos? Just ask! billconover@america-lending.com
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