If you’ve decided to purchase a home or condominium located within a homeowner’s association (HOA) community you’ll be required to pay fees to help the HOA keep order in the community and take care of common areas. So what exactly are the fees used for and what happens if you don’t pay them?
What are HOA fees used for?
HOA fees are mainly used as a way to maintain order in the community and to properly maintain common areas including mowing lawns, playground upkeep, pool maintenance, etc. The more amenities offered by an HOA community the higher the fees are for HOA residents.
In condominiums, these fees typically pay for not only common areas but go towards master insurance for exterior and interior maintenance, water, sewer, and garbage costs.
What happens when HOA fees are not paid?
In most situations, it can vary by community and state law, the HOA board will send a late payment notice when your monthly or yearly payment isn’t received.
The notice should list the amount you owe, any interest or late fees, potential steps they may take if the missed payment is never received, and what’ll happen upon future offenses. Whether they send a notice or not, they can take other necessary steps to get you to pay.
Take away privileges
In addition to the notice, or as a next step, the HOA may eliminate your privileges or access to certain common areas such as the pool, tennis courts, etc. The idea is to coerce you to pay so you can reinstate your privileges.
Make your renters pay
If you don’t pay your fees and you rent your property out, your HOA may go after your renters for the missed payments. They will continue to charge those renting your home until your debts with the HOA are paid in full.
File a lawsuit
Some HOAs, if legal, can sue you for the unpaid dues and fines. In this instance your HOA would take the money from your wages or bank accounts.
Foreclose on your home
If you continually neglect to pay your dues and fines, your HOA has the option of filing a lien to your home. This means you cannot sell or refinance your home without paying your HOA dues and the worst part, it gives your HOA the ability to foreclose on your home unless your state laws prohibit this action from being taken.
What is the time table?
Every HOA is different on when they’ll contact you regarding a late payment. However, it’s common for HOAs to act immediately since most of their budgeting needs depend on the fees collected from their residents.
What to do if you can’t make a payment?
If you’ve had a tough year or had an unforeseeable expense arise it’s best to contact your HOA board immediately and make them aware of your situation. If you act quickly and professionally, your HOA may allow you to set up a payment plan that works for you. Even if you’re behind by a few payments, attempting to set up a payment plan is your best option.
Pay your dues and you won’t lose
Learn all you can about your HOA’s rules ahead of time so you know whether living in an HOA community is the right choice for you. If it is, or you’re already living in one, just stick to the rules and pay your dues on time and you won’t run into issues.
