What is a Community Association Assessment?
Community Association Assessments refers to the regular amount owed to the association to cover the maintenance and upkeep of the community. Assessments might also be called Maintenance Fees, Condo Fees, or HOA dues.
What do Condo or HOA Assessment Fees Cover?
Every community is unique, but most condo and HOA fees cover these items:
- Basic Services / Shared Utilities (trash removal, water and sewage, and power for common areas, sometimes cable TV/Internet)
- Landscaping (common area grass, trees, plantings, mulching, water features)
- Facility Upkeep (cleaning, maintenance, staffing, and replacement for pools, tennis courts, paths, playgrounds, clubhouses, golf courses, etc.)
- Maintenance and Repair of Common Areas (Road or driveway paving and maintenance, street lights or hallway lighting)
- Security (gates, cameras, secure access, concierge staff, doormen)
- Fiscal Management (investment of reserves, insurance policy upkeep, accounting and collections, financial planning)
- Capital Improvements (planning and managing construction projects to improve the community)
What is the difference Between Assessments and Maintenance Fees?
In New York a submarine sandwich is called a “hero,” in Philadelphia it’s a “Hoagie,” and in New England it’s called a “Grinder.” No matter what you call them they are all the same. For community associations (Condos and HOAs) maintenance fees and assessments are interchangeable. Both terms refer to the regular amount owed to the association to cover the maintenance and upkeep of the community. This does NOT include situational fees, such as special assessments, late fees, facility fees, or violation fines. Some east coast communities use the term maintenance fees, while west coast communities generally refer to the fees as assessments.
What is the Difference Between a Standard Assessment and a Special Assessment?
A regular assessment (or simply assessment) is the regular maintenance fee for your HOA or condo association. It is usually determined once a year at the association’s budget meeting. A special assessment is an additional fee that is assessed by the board to cover unexpected costs. Special assessments should be extremely rare, as they are unbudgeted expenses and very disruptive to community members.
How Much Should My Community Assessments Cost?
It is the responsibility of the HOA or Condo board of directors to set the cost of community association assessments. Every community will have different costs based on their common area facility needs. The maintenance fees are set in the annual budget meeting and voted in either by the board or the community depending on state statute and different governing documents..
How Often Are Maintenance Fees Due?
Each community association follows a set of governing documents that lay out how assessments should be calculated, and how frequently they should be paid. Many communities charge assessments monthly, but some charge an annual or semiannual amount. There is usually a grace period but make no mistake they are due on the day the by-laws say they are due.
What Happens if I Don’t Pay My Condo or HOA Fees?
Paying your assessments is critical to maintaining your neighborhood to ensure that your community is provided with the services you rely on.
Not paying your assessments can have serious consequences, from a negative mark on your credit report to losing your home in foreclosure. But there are more than just personal consequences. Failure to pay your assessments means your neighbors have to cover your share of the burden. There are a lot of life safety issues that need to be addressed and maintenance fees cover those as well. If maintenance fees are not paid by all members of the association, that may lead to higher assessments, and angry neighbors.
Your fees help keep your community maintained, and preserve the property values for you and your neighbors. Aside from a pleasant residential lifestyle that is the main objective.
Are you a board member in a community struggling to collect assessments? Try our Free Collections Analysis to see how Axela Technologies can help you increase your community’s cash flow and keep your assessments reasonable.