When purchasing a property, you may come across two types of fees associated with it: Homeowners Association (HOA) fees and Regime fees. While both are common in real estate, they are different from one another in terms of their purpose and what they cover. In this article, we’ll explain the differences between HOAs and Regime fees and what they typically cover.
Homeowners Association (HOA) Fees
A Homeowners Association (HOA) is an organization that manages and maintains a community or subdivision. The HOA is typically made up of residents in the community and is responsible for maintaining shared amenities such as swimming pools, fitness centers, and common areas such as parks or playgrounds. In exchange for these services, residents pay a monthly fee known as the HOA fee.
The HOA fee is usually determined by the HOA board and can vary depending on the amenities provided and the size of the community. HOA fees can range from a few hundred dollars to several thousand dollars per year.
HOA fees typically cover the following:
- Maintenance and repairs of common areas: This includes things like landscaping, snow removal, and repairs to shared amenities such as swimming pools and fitness centers.
- Insurance: The HOA is responsible for maintaining insurance on common areas and shared amenities.
- Utilities: The HOA may cover the cost of utilities for common areas such as streetlights and the community’s water supply.
- Reserve fund: The HOA may set aside a portion of the HOA fees to build up a reserve fund for future repairs or maintenance.
Regime Fees
Regime fees are similar to HOA fees, but they are typically associated with condominiums or townhomes. Regime fees are paid by residents to cover the maintenance and repairs of the exterior of the building and shared spaces within the community. Unlike HOA fees, which are paid by residents of a single-family home community, regime fees are typically paid by residents of a shared building.
Regime fees typically cover the following:
- Exterior maintenance: This includes things like painting, roof repairs, and window replacements.
- Common area maintenance: This includes things like landscaping and repairs to shared amenities such as swimming pools and fitness centers.
- Insurance: The regime is responsible for maintaining insurance on the exterior of the building and shared spaces within the community.
- Reserve fund: Similar to HOAs, regime fees may also include a portion set aside for a reserve fund for future repairs or maintenance.
Key Differences between HOA and Regime Fees
The key difference between HOA and Regime fees is that HOA fees are generally associated with single-family homes, while regime fees are associated with shared buildings such as condominiums or townhomes. HOA fees typically cover the maintenance and repairs of common areas and shared amenities within a community, while regime fees cover the exterior maintenance and repairs of the building and shared spaces within a community.
HOA and Regime fees are common in real estate, but they are different in terms of their purpose and what they cover. Before purchasing a property that requires HOA or regime fees, it’s important to understand what you’re paying for and what services are covered by these fees. Working with a knowledgeable real estate agent can help you navigate these fees and make informed decisions about your purchase.