United States | HOA Fees
HOA Fees: How They Are Set, Raised and Collected
Every owner in an HOA or condo association pays fees to the association. The board sets them from a yearly budget, state law limits some increases and fees, and unpaid fees can end in a lien. Florida and Texas statutes give the detail below.
The short answer
- HOA fees, also called dues or assessments, are what each owner pays the association to run and repair the shared property. The board sets them from the yearly budget.
- Each owner's share is set by the governing documents. In Florida it must be "the member's proportional share of expenses as described in the governing document".
- Some states limit increases. Florida condo owners can vote on a substitute budget when assessments would pass 115 percent of last year's.
- Late payment brings interest and fees. Florida sets 18 percent simple interest a year when the documents name no rate, and caps the late fee at $25 or 5 percent, whichever is greater.
- If you do not pay, the association can place a lien on the home and, after the notices the state requires, foreclose.
How the fees are set
The board prepares a budget for the year. A Florida HOA must prepare an annual budget showing estimated revenue and expenses, and give each member a copy or a notice that one is free on request (s. 720.303(6)). A Florida condo board must adopt its budget at least 14 days before the fiscal year starts, after sending owners the proposed budget at least 14 days before the budget meeting (s. 718.112(2)). A Texas condo's assessments "must be based on a budget adopted at least annually" (82.112), and a Texas HOA board may approve its budget only in an open meeting (209.0051(h)).
Each owner then pays the share the governing documents give their home. Florida requires HOA assessments to be "in the member's proportional share of expenses as described in the governing document" (s. 720.308(1)(a)).
Reserves for big repairs
Part of the fee may go to reserves, money set aside for large costs later. A Florida condo budget must include reserves for capital spending and deferred maintenance, including roof replacement, building painting, pavement resurfacing and any other item above $25,000 or the state's inflation-adjusted amount (s. 718.112(2)(f)). Owners can vote to fund less, except for items in a structural integrity reserve study in budgets adopted on or after December 31, 2024. That study does not apply to two to four family dwellings of three or fewer stories.
A Florida HOA budget "may include reserve accounts". If it has none, its financial report must say in large type that the budget "DOES NOT PROVIDE FOR FULLY FUNDED RESERVE ACCOUNTS" (s. 720.303(6)). In Texas, the HOA resale certificate must state "the amount of reserves, if any" (207.003).
Limits on increases
Florida condos. If a proposed budget needs assessments that "exceed 115 percent of assessments for the preceding fiscal year", the board must also propose a substitute budget without discretionary spending, and owners may adopt it by a majority of all voting interests. Reserves, structural study items and insurance premiums are left out of the 115 percent test (s. 718.112(2)(e)).
Florida HOAs and Texas HOAs. We found no percentage cap on increases in Florida s. 720.308 or in the Texas Chapter 209 sections we read. The governing documents may set one.
California. The Department of Real Estate's booklet, revised June 2016, says a board "may not increase the regular assessment more than 20 percent per year, without the approval of the owners", and that special assessments above 5 percent of budgeted expenses in a year need member approval (Civil Code 5605 and 5610). We could not open the current code to confirm those figures.
Late fees, interest, liens and foreclosure
Scroll the table sideways on a phone.
| Step | Florida | Texas |
|---|---|---|
| Interest | 18% simple a year if the declaration or bylaws name no rate; no compound interest (HOA s. 720.3085(3); condo s. 718.116(3)) | Condo: "a lawful rate established by the association" (82.112(c)). HOA default rate: none found in Chapter 209. |
| Late fee | If the documents allow, no more than the greater of $25 or 5% of each late installment | None found in the sections we read |
| Before attorney or agency fees | HOA: a "Notice of Late Assessment" giving 30 days to pay (s. 720.3085(3)(d)) | HOA: certified-mail notice with at least 45 days to cure before collection agent fees (209.0064) |
| Payment plan | Not set in the sections we read | HOAs of more than 14 lots must offer payment plan guidelines, 3 to 18 months (209.0062) |
| Lien | HOA: 45 days' notice by certified or registered and first-class mail before recording (s. 720.3085(4)). Condo: 45 days after a notice of intent (s. 718.121(4)). | HOA: two notices, the second by certified mail at least 30 days after the first, then no lien before the 90th day (209.0094) |
| Foreclosure | HOA: 45 more days after notice of intent to foreclose (s. 720.3085(5)). Condo: no judgment until 45 days after written notice (s. 718.116(6)). | HOA: court order for expedited foreclosure needed, and no foreclosure for a debt of only fines (209.0092, 209.009). Owner may redeem within 180 days (209.011). |
Florida: 2026 Florida Statutes. Texas: Property Code Chapters 82 and 209. In Florida, a first mortgage lender that takes the home owes at most 12 months of unpaid assessments or 1 percent of the original mortgage, whichever is less, when the conditions in those sections are met (s. 720.3085(2)(c); s. 718.116(1)(b)).
Fees when a home is sold
A buyer needs to know what is owed. In Florida, HOAs and condos must issue an estoppel certificate within 10 business days of a request; the fee is capped at $250 when nothing is overdue, with $100 more for delivery within 3 business days and up to $150 more when an amount is overdue (s. 720.30851; s. 718.116(8)). The statute adjusts these caps every 5 years by the consumer price index.
In Texas, an HOA delivers a resale certificate within 10 business days, listing regular and special assessments, amounts owed, reserves, the budget and the balance sheet. The fee is capped at $375, with $75 for an update (207.003). A condo resale certificate is due within 10 days, also capped at $375 from September 1, 2025 (82.157).
Common questions
What are HOA fees? +
Regular payments every owner makes to the homeowners or condo association. They pay for upkeep of the common property, the association's insurance where it has it, and its running costs, and may build reserves for large repairs. They are also called HOA dues or assessments.
What do HOA fees cover? +
Whatever the association's budget includes. In a Florida condo the budget must include reserves for items such as roof replacement, building painting and pavement resurfacing (s. 718.112(2)(f)). The IRS, in its Form 1120-H instructions, gives examples of assessments owners pay: for principal, interest and real estate taxes on association property, for upkeep of association property, and for snow and trash removal.
How are HOA fees set? +
The board prepares a budget each year and the fees are worked out from it. Each owner pays the share the governing documents give their home. In Florida, assessments "must be in the member's proportional share of expenses as described in the governing document" (s. 720.308(1)(a)).
How much are HOA fees? +
There is no standard amount: each association's fees come from its own budget. Before you buy, ask for the budget and the resale or estoppel paperwork, which in Florida and Texas states the current assessments and anything owed.
Can an HOA raise fees whenever it wants? +
It depends on the state and the documents. In a Florida condo, if the proposed budget needs assessments above 115 percent of the year before, the board must also propose a substitute budget and owners may adopt it by a majority of all voting interests; reserves and insurance are left out of that test. Florida's HOA statute sets no percentage cap. California's Department of Real Estate said in 2016 that boards could not raise regular assessments more than 20 percent a year without owner approval.
What is a special assessment? +
An extra charge for a cost outside the regular budget, such as a large repair. In Florida, notice of an HOA board meeting where special assessments will be considered must go out at least 14 days before. The California Department of Real Estate said in 2016 that special assessments above 5 percent of budgeted expenses in a year need member approval.
What happens if you do not pay HOA fees? +
Interest and late fees are added, the association can charge collection costs after the notices the state requires, it can record a lien on the home, and it can foreclose under the state's rules. Florida requires 45 days' notice before an HOA lien and another 45 days before foreclosure; Texas requires two notices and 90 days before an HOA lien.
Can an HOA foreclose for unpaid fines? +
In Texas, no. An HOA may not foreclose if the debt "consists solely of" fines or attorney fees tied only to fines (209.009), and a condo may not foreclose a lien made only of fines (82.113).
What does a buyer learn about HOA fees? +
Fees belong to the home. The buyer gets a statement of what is owed: in Florida an estoppel certificate within 10 business days, and in Texas a resale certificate within 10 business days, with fees capped by statute ($375 for the Texas certificate package).
Can I pay HOA fees in installments? +
Florida condo assessments must be made at least quarterly (s. 718.112(2)(i)). Texas HOAs of more than 14 lots must offer payment plans for delinquent amounts, for at least 3 months (209.0062).
Are HOA fees tax deductible? +
Not on a home you live in: the IRS lists HOA fees among nondeductible payments in Publication 530. They are deductible on a rented condo for upkeep of the common elements (Publication 527). The tax guide has the detail.
In what order are HOA payments applied? +
Florida: interest first, then late fees, then collection costs and attorney fees, then the delinquent assessment (s. 720.3085(3)(b)). Texas HOAs: delinquent assessments first, then current assessments, then collection costs for assessments, then other attorney fees, then fines (209.0063).
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