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Monday, March 07, 2016

Consider Association Fees Carefully When Buying a Home

While some folks do not desire any of the restrictions or benefits of living in a neighborhood with a home owner association in some areas it is a necessary condition of purchase.   One of these areas is the Rockledge or Viera areas of central Brevard County, Florida.

And with mandatory home owner associations come mandatory fees.  

I have never worked with a home buyer who wanted to include "high homeowner association fees" in their "must have" characteristics when shopping for their new home and neighborhood.

So, while not a primary screening tool when reviewing homes, the association fees (and rules) must be considered before making a purchase decision.

But homeowner association fees need to be looked at in the "right way" and not just as an additional cost.

What is the "right way?"    Of course the first necessity is budget.  

Assuming the fees charged are not a budget buster then consider what these monthly fees cover or provide.

In some communities such as Indian River Colony Club in Viera the fees are quite high (nearing a thousand a month or more).  In communities like Heritage Isle fees are in the range of $300 a month.  Then some communities such as Phillips Landing or Chelsea Park in Rockledge have fees around or under under $500 a year.

What is included in these fees?  
In IRCC fees includes all maintenance, facilities, landscaping, etc.  In most developments association fees include far less than Indian River Colony Club.

Heritage Isle and Grand Isle in Viera have gated entries, clubhouse, pools, etc as well as lawn/landscaping thus higher fees.   The Phillips Landing has a community pool and playground area while Chelsea Park has a park and playground but no pool thus Phillips Landing fees are higher.

Put in simple terms....
Fees reflect the old saying you got to pay to play...the more you play, the more you pay!

But do not forget the cost of the included services if you must pay separately for them.  For example,
  • Lawn or landscaping service in the area can easily be $75-$100 a month.  
  • If there is a gym or clubhouse, what does a membership cost?  What is the cost of your time if you must drive five miles or so to the gym instead of just down the street?  
  • If roof replacement is covered, amortized over the years, how much would you be required to put away to have the money set aside when the roof needs replacement?   
  • What about the painting of your home?
Whether or not the fees are worth the services provided is a decision each buyer must make.   Sometimes the location is more important than the fees, regardless of amenities provided.

And, while a reasonable fee structure is necessary, do not disregard the sufficiency of the fees. 

This is where the association financials need to be considered.

Are there adequate reserves for necessary association maintenance and other obligations?  
If not, associations may need to pass along a special assessment to owners when the need arises.  These special assessments will be in addition to the association fees.

Are there any already approved or planned fee increases? 
Like taxes and insurance premiums, homeowner fees can go up.

Finally, one word about associations...
Be an involved homeowner.  Involvement in your home owner association is key.  

Ready to buy a home in Viera or Melbourne, Florida? 
Call or text me at 321-693-3850 if I can help in anyway.

Image courtesy of Stuart Miles at

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