If you live in a condominium or a community with a Homeowners Association, you are aware that you will see a recurring charge to cover Condo or HOA expenses. In many ways, both fees are essentially the same and help fund the maintenance and upkeep of the community. The Association can use these fees differently depending upon the type of Association.
Homeowners vs. Condominium Associations. The major difference between a Condo association and an HOA is the scope of the property that the Association is responsible for maintaining. In a Condominium, each member owns the unit individually but retains joint ownership in the building and its grounds. Links between residents in a Homeowners Association are not so binding: Homeowners individually own their lots and homes, and the HOA owns the common areas. Homeowners have no monetary interest in the common areas owned by the HOA other than ensuring that the Common Elements remain esthetically appealing.
Difference in Amount of the Fees. Condominium Association fees and HOA fees may vary significantly. They are based on the funds required to support all the common elements. Because the fees of a Condominium Association will handle the repair and maintenance of the housing units and common areas like pools, parking lots and other areas, they are typically higher than the fees charged by an HOA with a similar amount of homeowners. The individual homeowners bear the costs of maintaining their own homes in the HOA – a cost that is included in Condo fees – so a Homeowners Association usually does not require the level of funding that a Condominium Association does.
Assessments. For most Homeowners Associations, the fees are assessed uniformly, with each lot owner to pay an equal share of projected annual budget. System evaluation of a Condominium unit is not as clear. Condo owners often have different percentages of ownership in the building, with larger units having a higher proportion of the property. The costs of the Association are not divided equally between each owner, but paid in proportion to the percentage of ownership.
Fees vs. fines. Many Condominium and HOA statutes provide the Association with the power to impose fines on members. But, the Associations must use fees and fines for different purposes. An Association uses fees (assessments) to cover the fees for maintenance and upkeep of their community. Fines are used as a punitive measure to encourage all residents to follow the rules put in place by the Covenants and By-Laws. Because they are not a stable source of income, fines are not typically used to pay for routine maintenance.
For more information on how Beacon Management Services can assist your Homeowners Association or Condominium Association in the metro Atlanta area, please call: (404) 907-2112 (o) or email Lisa Simmons at firstname.lastname@example.org. If you have a question or simply want to chat about your community, we offer a no-obligation consultation that is informative and educational. Our complete list of services is available at: www.beaconmanagementservices.com.
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