Homeowners Association Fee - HOA Fee
Definition of 'Homeowners Association Fee - HOA Fee'
An amount of money that must be paid monthly by owners of certain types of residential property to an organization that assists with maintaining and improving that property and others in the same group. HOA fees are almost always levied on condominium owners, but they may also apply in some single family neighborhoods.
Investopedia explains 'Homeowners Association Fee - HOA Fee'
Condo owners almost always pay HOA fees to cover the costs of maintaining the condo building's common areas such as lobbies, patios, landscaping, swimming pools and elevators. The association may levy special assessments from time to time if the HOA's reserve funds are not sufficient to cover a major repair, such as a new elevator or new roof. HOA fees can also apply to single family houses in certain neighborhoods, particularly if there are common amenities like tennis courts, a community clubhouse or neighborhood parks to maintain.
If owners of property belonging to a homeowners' association do not pay the required monthly (sometimes annual) fees as well as any special assessments, the homeowners' association can foreclose on the delinquent homeowner. Prospective homebuyers should always inquire as to whether the property they are interested in has HOA fees before committing to buy it because these fees can affect a homeowner's ability to afford the property. HOA fees can vary widely depending on factors such as community amenities and how effectively the reserve fund is managed.