{"id":28613,"date":"2021-12-16T12:33:22","date_gmt":"2021-12-16T20:33:22","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=28613"},"modified":"2021-12-16T12:33:22","modified_gmt":"2021-12-16T20:33:22","slug":"buyer-hoa-budget-guidelines","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/buyer-hoa-budget-guidelines\/","title":{"rendered":"Part of an HOA? Here\u2019s What You Should Know About That Yearly Budget"},"content":{"rendered":"

If your home is part of a homeowners association<\/a> (HOA), you probably already know that the yearly budget is something every HOA member is concerned about and has an opinion on. After all, those HOA budget guidelines not only determine whether or not your neighborhood will be getting any kind of upgrades or needed maintenance in the coming year, but also what the cost will be to the people paying those HOA fees \u2014 namely you, the homeowner!<\/p>\n

If you\u2019re new to the world of HOAs, you also might be wondering just what those monthly fees<\/a> you\u2019re required to pay will cover, why some communities have higher HOA fees than others, and whether or not you can expect your own monthly fees to go up.<\/p>\n

We\u2019ve talked to experienced real estate agents and attorneys who specialize in HOA law to gain insight into how those monthly fees are determined, what a yearly HOA budget involves, and what you, as a homeowner, should know about HOA budget guidelines.<\/p>\n

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Source: (Joao paulo m ramos paulo \/ Unsplash)<\/figcaption><\/figure>\n

What is an HOA, and what does one do?<\/h2>\n

While a homeowners association<\/a> might initially make you think of condominiums or townhomes, they are actually common in all kinds of residential communities. In the U.S., there are more than 370,000 HOAs<\/a>, which represents over 53% of owner-occupied households.<\/p>\n

HOAs are there to enforce regulations around what you can and can\u2019t do with your property, otherwise known as the covenants, conditions, and restrictions (CC&Rs) of a subdivision, as well as managing and maintaining certain expenses for that subdivision. HOA fees<\/a> are usually collected either monthly, or sometimes quarterly, and they can cover items like landscaping in common areas, security, trash pickup, or amenities such as community pools and gyms.<\/p>\n

Florida agent Carrie Routt<\/a>, who works with 75% more single family homes than the average agent in her area, says that while buyers might balk at what can seem like excessive HOA fees, the fees can sometimes almost pay for themselves. \u201cEspecially for an expense like exterior insurance,\u201d she says. \u201cThat could run between $8,000 and $9,000 a year for a house.\u201d<\/p>\n

What goes into an HOA budget?<\/h3>\n

Attorney Bruce Flammey<\/a>, who specializes in HOA law and also has extensive experience as a community association manager, says that the HOA budget is basically created as a savings account to cover specific categories of expenses for the association.<\/p>\n

The money that is collected over the year includes HOA dues and any interest that accrues. According to Flammey, the goal is to have neither a surplus nor a deficit by the end of the year. \u201cThis is a zero-based budget,\u201d he says. \u201cIt isn\u2019t designed to have a profit and loss.\u201d<\/p>\n

Expenses may include:<\/p>\n