Many homeowners ask, why do I have to pay HOA or COA fees? And, where is that money going towards? When you purchase property located within the jurisdiction of an HOA or COA, you become a member of that Association, responsible for paying community expenses called Assessments or, more commonly, referred to as HOA dues or fees. These contributions are collected on a fixed time schedule (such as on a monthly, quarterly, or annual basis) to pay for standard maintenance and upkeep of the community’s facilities and common areas, as well as to improve the community by implementing new facilities and features. Simply put, HOA fees or dues provide the funding which allows the HOA or COA to enforce its rules and regulations as well as carry out its obligations. Each Association and its Board determines how much residents have to pay each month, quarter or year by preparing a budget.
What do HOA fees cover?
Generally, HOA fees pay for the upkeep of common areas and facilities, including:
- Gyms or fitness centers.
HOA fees can also cover services for the community, such as:
- Lawn care and landscaping.
- Maintenance and repairs.
- Snow removal.
- Trash pickup.
- Pest control.
- Insurance for common areas.
- Social events, such as block parties or holiday parties.
Often, part of your HOA or COA dues goes towards the Association’s reserve fund, which pays for upcoming maintenance or large-scale projects (such as building a new park), as well as provides funds for possible emergency repairs. Think of it as the Association’s piggy bank or rainy day jar. If your HOA or COA does not have enough money in its reserves and needs to pay for a repair or project, they can issue what is referred to as “special assessments.” Associations can also raise or lower Association fees at any time, if the Board approves. For example, many Associations needed to dip into those funds after the recent hurricanes to fix a brick wall or to remove a tree from the common area. These funds can also be used for special large-scale projects, such as building a new park or clubhouse for the community to enjoy.
All fees and special assessments are set by the board of directors based on the budget they want to spend. A multitude of decisions go into the annual budget, including increases in maintenance costs or long-term goals of new or renovated amenities. Of course, you have a voice in this. A proposed budget should be available to all members. You can go to your Association meetings and state your case for a different fee or budget. While this mostly happens once a year, Associations can also raise or lower association fees at any time, if the board approves.
As a member of the Association, you are required to pay HOA/COA fees or assessments, just like any other bill. If you forget a payment or fall on hard times, there may be a grace period; but this depends on the Association. After that grace period, expect to get a friendly collection letter, late fees, and possible interest applied to your account.
What happens if you don’t pay your HOA/COA fees? If you receive collections letters and warnings and still don’t pay your HOA/COA dues, the Board may choose to take further legal action. This can include:
- Collections: If your HOA/COA sends your past-due account to a collections agency or some other mechanism to collect the overdue funds, it can damage your credit score.
- Liens: If your HOA/COA puts a lien on your property, that can come up in a title search and make it difficult to sell your house if you hope to move. Most Associations have the legal right to place a lien on a home or unit to secure the payment of past due assessments. To learn more about the Association collections process, read our blog “The Ins and Outs of the Association Collections Process.”
- Lawsuits: The HOA can sue you for unpaid dues in some states, including in Florida. This could end in wage garnishment or a levy against your bank account.
- Foreclosure: In some cases, your HOA may be able to foreclose on your property based on its covenants and state law. Remember, in a foreclosure action, the primary goal of the Association is not to take title to a property but to force a sale on that property so that the Association can retrieve the money owed to the Association.
If you come up tough times financially and have trouble paying your fees, contact your HOA or COA board to schedule a meeting. You may be able to work out a payment plan to see you through tough times. It’s always preferable to work out a payment plan rather than to continue not paying and allow late fees and interest to rack up on your account. In some cases, these late fees and interest can one day amount to even more than the actual assessment amounts which are past due.
The attorneys at The Orlando Law Group represent homeowners and condominium owners as well as HOAs and COAs in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout central Florida.
If you are a homeowner, condominium owner, or an Association board member, please reach out to our office at 407-512-4394, fill out our online contact form or save this information in case you ever find yourself or a loved one needing to use it. We provide representation and legal services for both homeowners and Associations alike.
If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.