When looking for a home, a term you might hear during your search is “HOA fee” or “No HOA”. But what is this referring to?HOA stands for Homeowners Association. When you purchase a type of property in a planned development such as a leased land property
or a gated community, you are obligated to join that community's homeowners' association (HOA) and pay monthly or annual HOA fees for the upkeep of common areas of the community. The HOA fees also include insurance payments to cover those common areas.
The amount of HOA fees will depend on the community and location of the home. Fortunately for Las Vegas residents, the city has some of the lowest HOA fees in the country. On average, HOA fees on homes for sale in Las Vegas cost $198 per month – the
second least expensive metro behind Nashville at $194 per month*.
So, let’s take a look at where your HOA fee goes.
What the HOA Fees Cover
The policies of each association can differ widely and depend on if you're buying a home or a condo. This is why it’s a good idea to ask the seller for a list of the HOA rules and regulations.
1. Ongoing maintenance
Ongoing maintenance and repairs to common areas, equipment, systems and shared amenities. Depending on your community, this may include:
2. Insurance policies
- Lawn care and landscaping
- Snow removal
- Water, plumbing and sewage systems
- A/C and heating systems
- Electric system and lighting
- Sanitation system
- Trash removal
- Security system and gates
- Elevator system
- Cleaning, painting and upkeep of exteriors and common areas, such as hallway walls, carpeting, clubhouse, etc.
- Pest control
- Repairs of roofs, interior roads, pipes, elevators, etc. due to age, weather conditions or other damage
- Maintenance of shared amenities, such as pool, fitness equipment, clubhouse, etc.
Your association must purchase a master insurance policy to protect your community’s building structures, exteriors and community property against damage, plus other riders and add-ons as required by your community’s location, property type and other
needs. Remember, however, that you this insurance doesn’t replace the need to carry your own homeowner’s policy.
3. Utility payments
Homeowners associations cover the costs of electricity, lighting, water, heating, air conditioning, etc. for all of the community’s common areas.
4. Reserve funds
Fiscally sound HOAs allocate a portion of their dues to a special long-term reserve account to cover planned and budgeted renovations or repairs that do not occur on a regular basis, like repaving interior roads or replacing elevator machinery. If
the reserve fund is not large enough to cover these expenses, your homeowners’ association will levy a special assessment to make up the difference – an additional fee you must pay.
5. Contingency funds
This money is automatically set aside each month to cover unforeseen community expenses and emergencies.
If your community employs its own management, maintenance and janitorial staffs, a portion of HOA fees is used to cover their salaries and benefits.
7. Professional property management
To ensure their community’s ongoing operations and financial stability, many homeowners associations enlist the services of professional community association management companies – and their fees are covered by HOA dues. A professional community
management company will effectively implement the policies set by the Board and provide full-service management services that add value and enhance residents’ lifestyles.
When considering a home with an HOA one of the advantages of moving into an area with an HOA is that they take care of much of the basic maintenance and service functions associated with owning your home, meaning that you will take care of everything
on the interior of the property, and the association typically takes care of the upkeep and maintenance on the exterior.
One thing to be aware of is that since the HOA is maintaining the exterior of the community, they often have regulations regarding the look and feel of the outside of your home. There may be certain things you can and cannot do, such as putting up
a fence, a personal pool, etc.
We'd love to know, are you looking to move to an area managed by an HOA, or is this something you would prefer to avoid? Leave a comment for us.
If you'd like more info about finding a home in Las Vegas, we'd love to talk. Email us at firstname.lastname@example.org.
*source - http://www.rcg1.com/nevada-by-the-numbers-blog/vegas-residents-rejoice-low-hoa-fees/