One of the mandates in the “Statement of Agreements, Conditions and Restrictions” (CC&R) of an HOA is the payment of what is owed. Depending on the association, these maturities can be monthly, quarterly or annually. They can also range from as low as $50 to hundreds of dollars.

Where exactly are you paying?

Debt from a Homeowners Association (HOA) goes toward association expenses. Fees are also known as appraisals for single-family residences or maintenance fees for condominiums. The HOA must have operating funds to perform tasks for which it is legally responsible, such as repairs, maintenance, administration, and maintaining sufficient reserve funds for repairs and replacement of major common areas (ie, pools and parks). The HOA’s governing documents must include information regarding the collection procedures due, their purpose or use, in case of delinquency, and the degree of authority to impose fees, fines, or other charges.

Who decides what you will pay?

The association’s board of directors determines what you must pay at the HOA. The amount due is based on the annual budget for the year and may include assessment increases, without owner approval, to finance significant increases in insurance premiums or an unexpected spending shortfall. The HOA CR&R may limit the number and percentage of assessment increases in any given year.

Special Evaluations

Special assessments are due only once and the HOA collects to cover an unexpected expense. Special assessments require approval by a majority vote of the owners. Examples of special assessments include major renovations to a community clubhouse; addition of a swimming pool or tennis court; replacement of roofs, siding or driveways within a condominium; or replacement or addition of access doors.

What happens if you don’t pay?

When you don’t pay your HOA membership due, it can affect the financial stability of the association and affect its ability to provide the services you pay for. Failure to pay can also result in fines and legal penalties. An HOA can pursue any legal means to collect payment, which can include reporting to credit bureaus, placing a lien on your property, and even foreclosing on your property. While the latter is extreme, the association may find it necessary to continue to meet its responsibilities to the other owners. The association may also impose late fees and collection/legal costs on delinquent property owners.