A Home Owners Association, or “HOA” as we love to abbreviate in the industry, is typically a developed neighborhood by one builder or multiple builders over time with a uniform look and feel. The appeal of living in an HOA is that there are more stringent guidelines whereby neighbors cannot paint their home purple or park their boat in the front driveway (or anywhere on the property, for that matter). Living in a community such as this has a more manicured feel than a neighborhood without association enforcement.
Additionally, there are usually perks in these communities like having a clubhouse and community pool, landscaping taken care of by the association, and maybe even a gated front entry with or without a manned guardhouse.
Of course all of these perks come at a cost and an unsuspecting buyer might only think to consider the monthly or quarterly dues. But in this article I dig a little deeper so that you can take in to consideration any additional hidden fees that you might not have been aware of and could come as a surprise after you’ve already contracted to purchase a home.
In Port St. Lucie, HOA dues can range from as low as $90 a month to over $400 a month depending on the community. Generally the lower the fee the less amenities in the community and the higher the dues the more benefits you’ll receive.
When you contract to purchase a property you very well may be required to make application with the association’s management company. They usually require this application to be submitted 2 weeks to 30 days before closing so that they have enough time to process the paperwork. It’s during this time that you might find out about …
Other fees that could be included:
Application Fee – $50 to $300 depending on the association management company. This is fee to “process” your application. In my opinion, $50 is reasonable and $300 is exorbitant. I’ve purchased a few investment properties in a gated neighborhood near my office and their fee is $300 to make application. It gets under my skin that they charge this fee because they can.
Capital Contribution – which is essentially like buying in to a community. This chunk of change is due when you make application or possibly at closing. It should be stated on the application so that you’re not blindsided by it at closing. I would say $400 – 600 is about average but I’ve seen up to $900 on the high end. You don’t get this money back; it just goes in to the association’s coffers.
Also be aware whether there is one or two associations in the community. Places like Tradition and East Lake Village have a master and sub-association so you will probably be paying capital contribution to both, though the master is usually a lot less than the sub.
Additional Annual Taxes – This won’t be part of the application process and will require your due diligence to research on your own. Your savvy Realtor® should also help you review the tax bill once you consider a property to purchase. Some communities that were developed in the decade of the 2000’s have higher taxes due to the cost of infrastructure that the developer passed on to the owners by way of a Bond or Special Assessment in the annual tax bill. Generally these additional annual fees will eventually be paid off but could have a 20 to 30 year term. It’s not typical for the current owner to pay off the bond or assessment balance at closing; the expense stays in the taxes and passes on to the new owner with no additional paperwork required.
Some additional expense examples include: Tradition’s bond of around $715 annually in the taxes. Newport Isle’s CDD and special assessment. East Lake Village’s special assessment.
You can quickly find out whether a property has additional fees in the taxes by using the St. Lucie County Tax Collector’s website to search the property address (street number + street name is sufficient). Click the property address when it comes up. Scroll down to the Non Ad Valorem section of the tax bill to see the fees, like the screen shot below –
So how do you know which and what fees will be charged to you? Ask for the application up front before you make an offer so you’re aware of the total costs. Check the taxes before you place an offer.
Are these fees bad?
Absolutely not. The point is to be an informed buyer and know what other costs are associated with buying in an association! This process only turns sour when the fees are revealed after you’re locked in to a purchase and you weren’t aware of the true costs up front.
Your best bet is to work with a savvy Realtor® who knows her marketplace, the ins and outs of the communities, and can give you the run-down of costs up front before you start exploring in a neighborhood that might be more than you bargained for.
Give Sarah Taylor a call to help you navigate Port St. Lucie and Treasure Coast neighborhoods that will be the best fit for you!
Click here to use the contact page.