What You Need To Know About Homeowner Associations and HOA Fees

This article details what you need to know about your homeowner association and HOA fees. Have you ever wondered what is your homeowner’s association and why they charge fees? You’ve bought a rental home in Florida and found out you must pay HOA fees and wonder if you can opt out of the HOA. What is the purpose of an HOA, what do they do, and why do they charge so much? You should have been given a copy of the HOA bylaws, rules, and regulations when you bought your home. Most areas have HOAs and take care of the community areas, and a fee is billed for these services.

Why do HOAs exist?

All homes built in a planned urban development (PUD), since 1992 have a homeowners association of one kind or another and are referred to as HOAs. If your home is in a resort-style neighborhood, you’ll probably have more community facilities to maintain. They aim to keep your neighborhood’s communal areas and amenities, such as the entranceway, landscaping, children’s play area or pool, and other facilities.

HOA Bylaws

They adopt a set of bylaws that residents should abide by that are in keeping with the community’s deed restrictions. Some owners are elected at a meeting to serve on the board of directors as a volunteer to be involved in overseeing the community. This helps the community to look as good as the day you bought your home there. They liaise with the association’s management company to ensure dues are collected, yearly budgets are set and adhered to, and any violators are pursued to ensure compliance.

As an owner, you should be able to vote in person or by proxy on annual meetings regarding budgets, changes, and so forth. If you have a property management company and would like your HOA to communicate with them via email or phone on any alleged violations, remember to write to them and add your property management company to their contact list for your home.

What Do HOA Fees Cover?

Associations have yearly HOA fees, usually paid monthly, quarterly, or yearly, and called dues, and some neighborhoods even have two associations. I’ve seen dues as low as $5550 per year and as high as $1250 monthly. Remember that HOA fees are subject to change and are usually assessed on an annual budget.

As a homeowner, determine if the association allows you to vote on how your hard-earned money is spent in absentia. You will also vote on who is elected to the board of directors, outstanding dues, and their collection. If you are an investor and your property is a rental. You might want to check out more information on property management here https://renterschoicehomes.com/kissimmee-property-management-florida/

Where’s The Money Held

An association should have at least two bank accounts, one used for general operating expenses, including landscaping, pressure cleaning, pool servicing, community insurance, and attorney fees for chasing delinquent or non-conforming owners.

The second account, a reserve account, is used for longer-term projects such as replacing the roof on buildings, resurfacing the community swimming pool, exterior painting of the buildings, replacing landscaping, replacing roads, security gates, etc. If it’s on the common ground, then there should be an amount you pay every month that goes towards those long-term expenses. Exceptions are often handled by the association levying its membership to cover a shortfall or unforeseen expenditure.

In a condo association, the roof is classed as a communal area, and the fund for its renewal might have been set to mature at fifteen years. What happens if it needs replacing after ten years and insufficient money is in the fund? Typically, most boards follow “Robert’s Rules of Order” in so far as the board of directors meets, a motion is brought before the assembly, and is voted upon. As a homeowner, you do not have a say in the decision that has been made, even though it can result in an unexpected expense for you.

What happens if you Don’t Pay HOA Fees in Florida

You must ensure your HOA fees are paid promptly and that you always know how to contact your HOA, and they have current contact details for you. Florida law allows the HOA to write to your tenants and demand that their rent payments be sent to the HOA, not to your management company or yourself. They can also assess you with legal fees and other HOA fees to cover their collection process. They can also foreclose on your home for non-payment of dues.

HOA fees are tax deductible if this is an investment property that you rent out. Associations can be a blessing or curse depending on the management style and the board of directors. Some have many restrictions, such as deciding what color you can paint your home, and visitors may be unable to park their car outside your home after 6 pm. Check your HOA’s rules and regulations. As an owner or potential buyer, you should be able to have a copy to review.

You must ensure your HOA fees are paid promptly and that you always know how to contact your HOA, and they have current contact details for you. Florida law allows the HOA to write to your tenants and demand that their rent payments be sent to the HOA, not to your management company or yourself. They can also assess you with legal fees and other HOA fees to cover their collection process. They can also foreclose on your home for non-payment of dues.

HOA fees are tax deductible if this is an investment property that you rent out. Associations can be a blessing or curse depending on the management style and the board of directors. Some have many restrictions, such as deciding what color you can paint your home, and visitors may be unable to park their car outside your home after 6pm. Check your HOA’s rules and regulations as an owner or potential buyer; you should be able to have a copy to review.

I have encountered a few homeowners unaware they had an official HOA, let alone HOA fees. No one had ever contacted them. They were under the impression that if they didn’t get a bill, there were no HOA fees due, right? Unfortunately, not.

If you don’t know who your HOA is and how to contact them, ask your neighbors or google them. If nothing shows up and you live out of state or overseas, try contacting your local county office or the State of Florida. All HOAs have to be registered with the state.

Additional HOA Information

When buying a home to rent out your home for long-term rentals or vacation rentals, you’ll need to review your association’s by-laws in-depth. Some HOAs prohibit long-term or short-term rentals in deed-restricted communities that may not allow pets, street parking, or rentals. It’s in your best interests to check them out before buying.

Some HOAs allow long-term rentals under the provision that the tenants undergo an application with the HOA, and that’s in addition to the management company application process, which might be similar or quite different depending on what they deem necessary to know about your potential tenant. It can take a week and sometimes up to a month to respond to the homeowner about their applicant. The HOA fees they charge for this service vary. We’ve seen them as high as $200 per applicant.

If the HOA doesn’t approve your prospective tenant for long-term rental, they must tell you in writing why they didn’t meet the criteria. They can’t divulge sensitive information regarding the applicant unless they have the express permission of the applicant in writing to do so.

Some owners feel their HOA has too much power or charges too much for HOA fees, and the owners need more control. It would be best to remember that other homeowners adopted these rules and regulations in the community. The only way to change practices is to attend meetings, ask for your topic to be put on the agenda for discussion, and get a majority vote of the members present for a possible change.

Disclosure: All information at the time of writing is deemed reliable but must not be counted on. Please check with your own HOA and or legal advisor for specific details that pertain to your situation. Here’s a link to the Florida statutes on HOAs. https://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0720/0720.html

Written by: Anne-Marie McCormack Lic. Broker

Phone USA: 407 933 2367

Phone UK: 0161 300 9595

hello@renterschoicehomes.com