Depending on the type of home you purchase, you might have to pay extra fees in addition to your local property taxes. Much like taxes, these extra fees go to pay for various services and amenities for the neighborhood in which you live.

These extra fees could come from a condo association or a homeowners association, depending on the type of residence you have purchased and where you live. While both of these associations are similar, and the fees that they charge help to fund similar things, there are differences between Condo Fees and HOA Fees.

Below, we’ll dive deeper into what the two fees are so you can understand the similarities and differences.

Ownership Type

The differences between Condo Associations and HOAs begins at what you own and what you don’t own with each type of property. 

With a condominium, every member will individually own their own unit. However, all of the members of the association will have joint ownership on all common areas. This includes not just the pool and gym, for instance, but also the front and back yards, if there are any.

In an HOA, each member will own the unit that they live in, just like a Condo Association. The difference is that the HOA will own all of the different common areas. So, for example, if there is a community pool or park, that will be owned by the HOA rather than the individual homeowners as a joint entity.

The Fees

The ownership breakdown determines what the fees for each property type pay for. In a Condo, the fees will help support the ongoing maintenance and improvement of all common property. HOA fees, by contrast, support the ongoing maintenance of common property that another entity actually owns.

Condo fees are typically more expensive than their HOA counterparts. The reason for this is that all owners in the Condo association need to pay their fair share for repairing the common areas as well as the entire condo building. 

This is not the case with an HOA. Each individual homeowner is responsible for repairing their own unit, so their fees only cover the maintenance of the common areas.

If the Condo building needs a new roof, for instance, the Condo fees must pay to have it replaced. If one homeowner in the neighborhood needs a new roof, that individual homeowner is responsible for paying that. The HOA fee doesn’t factor in at all.

The Assessments

Another major difference between Condo Fees and HOA Fees is how assessments are conducted.

In HOAs, each homeowner will end up paying an equal amount in fees. It doesn’t matter how big their home is, how much it’s worth or what their property taxes are. The HOA fees will be a set amount that will be paid on a regular basis — monthly, quarterly or annually.

There are some Condo Associations that will assess fees differently based on the size of the condo. People who own larger units will be forced to pay higher condo fees and, as a result, have a larger ownership of the property’s common areas. 

The Fines

Both a Condo Association and HOA have the ability to assess fines if individual owners violate the rules of the neighborhood or property. Fines can only be given out, though, if the association’s written rules are cleairly violated. They are punitive in nature and are therefore only assessed based on the actions — or lack thereof — homeowners take.

In most cases, HOAs are stricter than Condo Associations are. Part of this is simply because people who are in HOAs have more freedom to make choices on how their homes look. For example, owners in an HOA can choose the type of roof, siding and walkway, while others may be more restricted in the color and material type.

This isn’t even possible in a condo building, which doesn’t provide individual owners with the ability to make those changes to their individual units.

What Do Condo Fees Cover?

While we mentioned some of the items that Condo Fees cover above, it’s important to dive a little deeper into them so you can see what you will, and will not, be responsible for if you purchase a condo.

As mentioned before, they cover all common amenities at the property, including community pools, parks and other common areas. They also cover parking, landscaping and general cosmetic maintenance, the collection of recycling and garbage, and security of the building and property.

Since the Condo Association owns the building jointly, Condo Fees will also go toward obtaining homeowners insurance. This insurance will cover the overall building, but may not cover some aspects of the individual units within. 

What Do HOA Fees Cover?

Some of the items that HOA Fees cover are similar to what Condo Fees cover. However, due to the simple nature of the two types of properties, these fees go toward different things.

For instance, HOA fees will also cover the common neighborhood amenities such as a common pool, parks, gyms and other common spaces. It’ll also usually cover recycling and garbage collection, if that’s not covered by the local government. It also covers overall landscaping and ongoing cosmetic maintenance of the neighborhood.

In addition, HOA fees usually will cover road maintenance and snow removal, if these services are provided by the local government. And it’ll also pay for the maintenance and repairs to all shared spaces.

HOA fees will not pay for any insurance coverage, though, as that will be the responsibility of each individual homeowner.

Work with a Trusted Insurance Company

Condo Fees and HOA Fees are similar in nature, but there are also many differences between them. It’s important to know what they will cover, how much they will be and what you’re responsible for as you’re shopping for a home so you can work it into your budget.

At the same time, it’s also important to work with a trusted insurance company that has experience providing insurance for properties located in Condo Associations and HOAs.

Signature Insurance is that company in Michigan. Our agents have long and diverse resumes so we can help you get the insurance you need no matter what type of property you own.

Contact us today to find out more. 

Get insurance today!

At Signature Insurance we want to help you understand your insurance coverage options so you make the best decision.

Contact us at (586) 274-9600 and we’ll be happy to get quote for you from many of the top auto insurance companies or home insurance companies in Metro Detroit.