Are you thinking about buying a condo in Summit County – perhaps a ski-in/ski-out alpine condo in Breckenridge or Keystone? Whether you are new to condo living or not, you’ve likely heard tales from condo owners about the HOA or “homeowners’ association”. In this post we’ll share a bit of information about HOAs, the types of fees they charge their members and why they are assessed.
What is a Homeowners’ Association?
In short, a homeowners’ association is an organization of the homeowners inside of a residential area or development. When you buy into a development that includes multiple owners in the same physical building – like a condo development – there needs to be some sort of body in charge of maintenance, setting and enforcing the rules and more. This responsibility falls to the HOA, in which every resident has a vote and voice.
Common Types of HOA Fees
As a HOA is an organization governed by its members, it can assess any manner of fees that are legal and are approved by the board of directors. However, with most HOAs you’ll find that the fee structure tends to be limited to the following:
Monthly or Annual Maintenance Fees – monthly or annual maintenance fees are paid to the HOA to cover cleaning costs, landscaping and other items that are performed on a regular basis. Electricity for common areas, keeping the hallways tidy when residents are tracking wet snow through and maintaining the hot tubs are all costs that need to be shared amongst the association’s members.
Special Assessments – these are fees that are assessed on a ‘one-off’ basis to cover some major cost that has come to the association. For example, if the roof was damaged in a major snowstorm and there was a payable amount outside of what was covered by the building’s insurance, the HOA would levy a special assessment to split the cost amongst the residents. Building improvements fall under this area as well, so if the HOA decided to install a swimming pool for summer use, a special assessment would be levied to pay for it.
Capital Contributions – this is a one-time fee is levied when a homeowner buys into the building and joins the association. Many HOAs place these fees into a reserve fund to be used at a later date, while some HOAs don’t charge them at all. These fees will be explained to you as part of the condo buying process.
Budgeting for HOA Fees
It’s worth noting that HOA fees are going to be part of your expenses moving forward, so you’ll need to build them in to your monthly budget. One way to better understand your HOA fees is to become a member of the board, so if you’re interested and motivated, you can start attending meetings to have your say.
Don’t let the prospect of HOA fees put a damper on your Summit County condo purchase. For more information and to learn more about real estate opportunities in the area, contact The Smits Team today at (970) 668-2121 or by email on our quick contact form.