Where Does My Money Go? Breaking Down Your HOA Fees
If you’ve ever looked at your monthly homeowners association (HOA) fee and wondered, “Where does my money go?”—you’re not alone. Whether you're new to community living or just looking for more transparency, it's important to understand how HOA fees are used and what they don’t cover.
What Are HOA Fees?
When you buy a property in a community governed by a homeowners association, you become a member of that association—and with that comes a financial responsibility. HOA fees are recurring payments all homeowners contribute to help maintain and protect shared community spaces and services.
What do HOA fees typically cover?
Landscaping and lawn care
Snow removal
Common area cleaning and upkeep
Repairs to shared structures like roofs or exterior siding
Amenities such as pools, gyms, and clubhouses (if applicable)
Related: Love Thy Neighbor: How to Work With Your Neighbors to Help Your Condo Thrive
What HOA Fees Don’t Cover
One common misconception is that HOA fees cover personal utilities, mortgage payments, or repairs inside your home—they don’t. These fees only apply to shared community spaces and services that affect all residents.
If you’re unsure what your specific fees cover, it’s always smart to review your HOA’s financial statement or ask your board for a breakdown.
Who Manages Your Fees?
Your HOA board, typically made up of elected residents, has the authority to allocate HOA funds. Their main responsibility is to make decisions in the best interest of the community. This obligation is referred to as a fiduciary duty, which means acting honestly and responsibly with the community’s money.
According to Marcus, Emmer, Erico, and Brooks (MEEB), board members must refrain from making decisions that serve their personal interests over those of the community.
If your community works with a property manager, it’s important to know that property managers do not have the authority to spend association funds on their own. They provide guidance and recommendations, but spending decisions always fall under the HOA board’s control.
Need more insight on how local rental prices are affected by HOA policies?
Explore Worcester’s Rental Price Increase Trends
The Role of Reserve Funds
In addition to day-to-day expenses, HOA boards must also plan for major future repairs or replacements. That’s where reserve funds come in.
These funds act like a savings account, built up over time through a portion of the HOA fees. They’re used for larger projects like:
Roof replacements
Repaving parking lots
Upgrading aging plumbing or electrical systems
Reserve funds are crucial to preventing emergency assessments or large one-time charges to homeowners.
Why Transparency Matters
Understanding how your HOA fees are spent can help foster trust and collaboration in your community. You have the right to ask your HOA board for financial statements or an annual budget. Transparency helps everyone stay informed and ensures the long-term success of the community.
Final Thoughts
HOA fees are more than just another line item on your budget—they’re your contribution to the health and longevity of your neighborhood. By understanding where your money goes, what’s covered, and who makes decisions, you’re better equipped to be an active and informed member of your community.
Want to see how your HOA fees compare to others in the region?
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