Where Do HOA Dues Go? A Plain-English Guide
If you live in a homeowner association, you pay regular assessments, often called dues. It's fair to wonder what that money actually does. Every community's budget is different, but most assessments fund the same handful of categories.
What HOA dues typically pay for
Landscaping and snow removal
Mowing, trimming, irrigation and seasonal work in common areas, plus snow removal under the association's contract. In Colorado, many snow contracts begin service only once snowfall reaches a set depth, so a light dusting may not bring out the plows.
Insurance
The association's insurance policy covers what the association is responsible for under its governing documents. What it covers, and what you should insure yourself, depends on your community.
Reserves
Reserves are savings set aside for future major repairs and replacements, such as roofs, paving and fencing. Setting money aside now helps reduce the chance of an unexpected special assessment later. (See What Is an HOA Reserve Study? )
Utilities
Water, electricity and other utilities for shared services and common areas, such as irrigation, lighting or a clubhouse.
Repairs and maintenance
Day-to-day repairs to common elements, from a broken light to a damaged fence.
Professional management
The management company handles daily operations, accounting, owner communication and vendor coordination at the board's direction.
Who decides how dues are spent?
Your board of directors, made up of volunteer owners, plans for these costs through the association's annual budget. The management company helps prepare the budget and carries out the board's decisions. That way the whole community shares in caring for what everyone uses and enjoys.
Three common myths about HOA money
Myth: Fines are a source of profit.
Fact: Fines are an enforcement tool to encourage compliance with community standards, and they go to the association. In Colorado, fines for violations that aren't a health or safety threat are capped at $500 in total.
Myth: Reserves are extra money.
Fact: Reserves are savings for planned major repairs and replacements. They're spoken for, even if the work is years away.
Myth: The management company makes the rules.
Fact: Rules come from your community's governing documents and the board. The management company carries out the board's direction.
Questions about your community's budget?
Contact your community manager, or log in at www.accordhoa.com and click "HOA Portal Login" to view your community's documents.
Related: Who Does What in an HOA? | Homeowners Hub
