HOA is short for “homeowners association,” though given the frequency of their fees, you might think it stands for “Hold On, Again?”
Most condo owners from anywhere will be familiar with the monthly bite of bill of these HOA fees. But renters and private homeowners are sometimes puzzled by the concept of having to pay a hefty new bill that they never had to pay before.
The concept in Costa Rica is basically the same as anywhere else: All the owners in a condominium development must pay a monthly fee for the upkeep of the common property. This might include swimming pool maintenance, gardening, landscaping, perimeter fencing, road repair, pest control, elevators, painting, insurance, cleaning, and even 24/7 guards at the gate. Sometimes money is set aside for capital replacement or major projects, or as a reserve fund.
There is no single “owner” who is responsible for all of these costs — everyone is an owner. So the costs have to be shared equally, and an HOA is necessary both to manage the workload and to distribute the bill.
Are there any HOAs that manage their properties badly? Our noses would start growing like Pinocchio if we said there weren’t. But good, bad or ugly, HOAs and their fees are a reality that every condo owner will face. In smaller communities, HOA fees tend to be higher because there are fewer owners to share the cost. But in some cases, maintenance expenses might be subsidized by the developer.
If you’re looking into buying a condo, be sure you know exactly how much the HOA fees are, and exactly what they pay for. Weigh this expense against what it would cost if you had to cover gardening, pool maintenance and security on your own in a private home.
Work with your real estate agent or attorney to obtain financial information on the HOA, including budget and reserves. Talk to the neighbors about their impressions of how the HOA is managed. You might even want to obtain and review minutes of past meetings.
Your due diligence will pay off when you find a property you love with an HOA that is organized, responsible and reliable. With that combination you can hardly go wrong, and the icing on the cake is that your investment will be in good hands even in your absence.