Suzanne Maynard, her husband Gord Clark and daughters Sydney, 3, and Evelynn, 6, enjoying spending warm summer days and nights at their private community lake. Photo by Paula Trotter/Fore CREB®Now.

Getting a head’s up on HOA fees

When school let out this year, Suzanne Maynard and her two young daughters joined a cohort of neighbours at Lake Bonavista for a summer kick-off party.

Unlimited access to the private beach is worth every penny of the Homeowner Association (HOA) fee Maynard says she and her husband pay annually.

“We truly believe it’s the best $288 we spend in a year,” she says. “The money that goes towards the community is priceless – it provides endless entertainment for our kids and we have got to know our neighbours down at the lake.”

Lake Bonavista HOA fees cover the maintenance costs of the lake (as well as kayaks, paddle boats, lifejackets and change rooms), a tennis court, park and outdoor fire pit.

“We might feel differently about the fee if we didn’t use the resources,” says Maynard. “You really have to know what your expectations are for the amenities.”

The young family previously lived in Cranston where their HOA fee was about the same amount for access to the community hall and splash park.

“We feel Lake Bonavista is a much better value for what we’re getting,” says Maynard.

What are HOA fees?

Homeowners’ associations and fees started to become more popular in North America as early as the mid-1960s as developers wanted to increase the curb appeal of their projects. Homeowners pay property taxes for services like garbage and snow removal, as well as maintenance of roads and public city property; however, HOA fees pay for neighbourhood amenities that the municipality is not responsible for.

“HOA fees are strictly to assist the community with items like maintenance to pathways, signs, facilities and water features, and even to enhance boulevards and meridians” says Tanya Eklund, a Calgary REALTOR®. “Many of the newer developments have established these fees to allow for a more pristine and maintained community.”

A homeowners’ association – usually a volunteer group of community members – collects and manages these fees, and also enforces the community’s architectural guidelines.

What you need to know

“Buyers must understand these fees are mandatory – they must be paid,” says Eklund, even if you don’t use the community’s amenities.

The requirement to pay HOA fees is listed on the land title certificate. If you don’t pay your dues, Eklund says liens can be registered and affect your ability to secure a future mortgage, re-finance or sell the home, and potentially lead to foreclosure.

Before you buy

Homeowners’ associations and fees are a polarizing issue. Some homeowners see great value in them, others, not so much.

Those in favour often say the fees provide excellent community enhancements and the architectural guidelines stop neighbours from doing anything that could drive down their property value.

Those against argue the architectural guidelines are too strict and the fees too high for what’s included.

It’s important to do research and ask yourself the following questions before buying in a community that has a homeowners’ association:

1. Find out how much the HOA fees are, what they cover and how much the fees have increased over the years. Will you get use and enjoyment out of the amenities? Do you think the fees are of good value for what you’re getting?

2. Know what the HOA architectural guidelines stipulate and make sure the home you want is in compliance. Can you live with the development and upgrade restrictions outlined in the architectural guidelines?

3. If you’re looking to buy a condo unit in a community that has a homeowners’ association, be aware that you’ll be responsible for two fees in addition to your mortgage; HOA fees are separate from condo fees. Can you afford the total cost of this property?