Vesta’s Guide to HOA Assessments
Most residents of planned communities are responsible for paying homeowner’s association fees. In addition to that, residents also must pay assessments. Although many people think assessments and fees are synonymous for each other, they are completely different.
In this article, we will clear up common misconceptions related to HOA assessments.
- HOA Assessments: What Are They?
Also known as a “special assessment”, HOA assessments are fees that are charged by the homeowner associations. The fees cover any unexpected expenses that may arise. For example, natural disasters, inaccurate budgets, or any type of damage can be covered by HOA assessments.
- HOA Dues vs. HOA Assessments
Many people confuse the term HOA assessments with HOA dues. An HOA due refers to a fee residents pay that is recurring. HOA dues cover day-to-day expenses, unlike HOA assessments. For example, maintenance and landscaping expenses are covered by HOA dues.
- How Often Are They Due?
Most HOA dues are collected monthly or annually. However, HOA assessments are not due as often. HOA assessments are a one-time fee or sometimes an annual fee based on when the need for them arises.
- How Are Assessments Calculated?
Once a year, the board will create a budget and HOA dues are collected based on the annual budget. If the budget is accurate, HOA assessments may not even be collected. If the annual budget does not cover all expenses, the board may decide to collect a special assessment. The assessment fee is based on the emergency or unexpected expense that arises. Keep in mind, before an assessment fee is collected, the community homeowners usually take it to a vote.
To learn more about planning an HOA Budget, check out Vesta’s blog post: How to Prepare an HOA Budget.