HOA Dues in California: A Homeowner’s Guide

Living in a homeowners association (HOA) community has its perks—like shared amenities, well-kept landscaping, and a sense of neighborhood pride. But it also comes with financial responsibilities, and one of the biggest ones is HOA dues.

So what exactly are these dues, how are they calculated, and what happens if you fall behind? Don’t worry—we’ll walk you through the nitty gritty of HOA fees in California, from budgeting tips to resources if you’re struggling to pay.

What Are HOA Dues and Why Are They Charged?

HOA dues, also known as assessments, are mandatory payments made by homeowners to fund the daily operations and long-term maintenance of the community. These dues keep the lights on, the grass green, and the swimming pool crystal clear.

HOAs are legally allowed to collect dues under the Davis-Stirling Common Interest Development Act, which governs most HOAs in California. Boards have the responsibility to prepare an annual budget and determine the dues accordingly (Civil Code §5500).

How Are HOA Dues Calculated?

Dues are calculated based on:

• The annual budget (operating expenses + reserve contributions)

• The number of units in the association

• The type and size of your property (in some communities)

In California, HOAs must distribute a budget summary each year and provide a breakdown of how dues are determined.

Important: The board can raise regular assessments by up to 20% per year without a vote from the membership (Civil Code §5601(b)). Anything higher typically requires majority approval.

Types of HOA Fees and What They Cover

Not all HOA fees are the same. Here’s a breakdown of the different kinds of fees you might encounter:

1. Regular Assessments

These are your standard monthly, quarterly, or annual dues. They cover:

• Common area maintenance (landscaping, sidewalks, lighting)

• Insurance premiums for shared structures

• Staff salaries or management fees

• Utility bills for shared spaces

• Amenities like pools, gyms, or clubhouses

2. Special Assessments

These are one-time charges for unexpected expenses like emergency repairs or capital improvement projects. Boards must follow specific rules to impose special assessments, including homeowner votes if the assessment exceeds 5% of the annual budget.

3. Fines and Penalties

If you violate the HOA’s rules (like noise ordinances or landscaping violations), the board can issue fines after a due process hearing.

4. User Fees

These are optional charges for reserving amenities, renting clubhouse space, or getting pool passes.

Budgeting for HOA Dues

HOA dues are non-negotiable, so it’s important to plan ahead. Here are a few budgeting tips:

• Review the Budget Packet: Your HOA is required to provide a budget summary every year (Civil Code §5300). Use it to see where your money’s going.

• Set Aside Funds Monthly: Even if dues are quarterly or annual, treat them like a monthly bill and set money aside.

• Expect Increases: While dues can only be raised by 20% without a vote, many associations raise them annually to keep up with inflation or rising costs.

• Plan for Special Assessments: Keep a small emergency fund in case your HOA calls for one-time contributions. In California many HOAs have underfunded Reserve Accounts!

What Happens If You Don’t Pay Your HOA Dues?

Falling behind on HOA dues can lead to serious consequences, especially in California where the laws empower HOAs to enforce collections.

1. Late Fees and Interest

If you miss a payment, expect a late fee (usually $10 or 10% of the overdue amount) and monthly interest (up to 12% annually).

2. Loss of Privileges

HOAs may restrict access to amenities or voting rights if your account is delinquent.

3. Collection Action

Your HOA can send your account to collections or hire an attorney to pursue the debt.

4. Lien and Foreclosure

Yes, in California, HOAs can place a lien on your home and initiate foreclosure after a delinquency of $1,800 or more, or if the payment is more than 12 months overdue (Civil Code §5672). This is typically a last resort but it’s legally allowed.

Struggling to Pay Your HOA Dues? Here’s What to Do

If you’re falling behind, don’t panic—you have options:

• Communicate Early: Reach out to the board or management company to discuss payment plans. Many HOAs are willing to work with homeowners who are proactive.Payment Plan: Under Civil Code §5666, you can request a payment plan of at least 12 months with no penalties, but late fees may still apply.

• Financial Hardship: Some HOAs have hardship programs or can waive late fees in certain situations.

• Housing Counselor: HUD-approved housing counselors can help if you’re struggling financially.

HOA Dues Help

Here are some places to turn:

• California Department of Real Estate (DRE): Educational resources and consumer assistance.

• CCHAL: Nonprofit that helps homeowners understand their rights.

• HUD Housing Counseling Services: Personalized help with budgeting and financial planning.

• HOALAWS.com: Stay up to date on current laws and tips to protect your rights as a homeowner in an HOA.

Stay Informed, Stay Empowered

Knowing how HOA dues work can help you plan better, avoid penalties and advocate for yourself in your community. Whether you’re new to HOA living or a seasoned homeowner, being financially prepared is key to your home and your sanity.

Visit HOALAWS.com for more homeowner tips and legal updates. We’ve got you covered.