If you have recently moved to an area that requires you to pay dues into a homeowner’s association, you may wonder how this amount is calculated and what it covers. Put simply, you are probably wondering what it is exactly that you are paying for. This is a good question, especially in a time when it is crucial to make every dollar count. Luckily, the HOA dues are based on laws and regulations in the state, rather than being an arbitrary number that the members of the board have come up with. Here at National Property Management Group, a property management group serving Santa Clarita, we have some information about HOA dues, how the HOA dues are determined, and what the HOA dues cover.
In the state of California, the DRE (Department of Real Estate) requires that a budget is developed from the developer for the development that has been proposed. This budget has to be submitted for approval to the DRE prior to any actual sales taking place. The DRE has guidelines for the budget for all areas that are owned in common areas, and the DRE determines which areas are the Association’s responsibility in terms of maintenance and replacement when necessary.
There are two basic areas of the budget:
- Operating Accounts
The Operating Accounts include things such as the landscaping, utilities, etc.
- Reserve Accounts
Reserve Accounts are for long-term replacements, such as the replacement of storage tanks or water boilers, repaving, re-roofing, exterior painting, and more.
The individual assessment is then determined by dividing the approved annual budget by the total number of units in the Association’s jurisdiction. Once the DRE has approved the first budget, the total assessment for each month is passed on to the homeowners. Afterwards, the Association’s Board of Directors and property manager determine the ongoing needs of the property and adjust the dues accordingly.
A portion of the monthly dues that you pay will cover the repairs, maintenance, and operation for which the association is obligated to with the Covenants, Conditions, and Restrictions. These items include janitorial, security services, pest control, landscaping, refuse collection, electricity, water and taxes. A portion of the assessment that you pay each month will also go toward the reserve account.
If you have additional questions about HOA dues, contact National Property Management Group today for information. At NPMG, we understand the inner workings of HOAs and can help you to understand the HOA dues for your Santa Clarita home.
National Property Management Group
28009 Smyth Drive
Valencia, CA 91355