Most Community Associations have a handful of utilities that are paid for by the Association fees collected from each homeowner in the community. These “community utilities” include expenses like common area utility lighting, water running to pools and community bathrooms, trash pickup, etc. These community-wide expenses are crucial in maintaining the look and expectations of the Association as a whole. All homeowners within the community share in the benefit from the payment of these expenses.
When potential buyers consider buying in a community governed by a HOA, a very important question to ask should be “What does the HOA fee cover?” or “What utilities are covered in the HOA fee?” In some instances (more often in condominium and townhome communities) there can be utilities that are also covered for individual homes, so it’s obviously important to know what you are paying for!The answers to these questions vary depending on the individual community. In communities that consist of single-family homes, you generally do not see any individual utilities covered through the Association. However, that does not mean it cannot happen. Each community is unique, so make sure to research before any purchase.
As stated before, it is much more common to see the inclusion of one or more utilities within HOA fees in townhome and condominium communities. For example - water, sewer, trash, cable, internet, landscaping, etc can all be incorporated in the monthly HOA fee. These items can create a big benefit to potential buyers when contemplating a purchase (i.e. the potential money savings by having these utilities included vs. paying separately). Depending on the amount of utilities covered and the general cost, the assessments vary widely from one community to the next - regardless of size.
In addition to knowing what the Association fee covers, it is also important to understand what happens if the community experiences a high delinquency rate on collecting assessments. Defaults in Association payments may delay or even prevent the payment of day-to-day bills that keep the community running. Even a 10% delinquency rate may result in the inability to pay a power bill, resulting in a loss of lighting in a common area.
Delinquencies do not just impact utilities in common areas. Another important question to consider is what can happen to an individual homeowner’s utilities when he/she has become delinquent? Some Associations actually have the right to cut utilities for a single residence in the event of nonpayment. The Georgia courts have been clear that this action is permissible, and it is not considered to create hazardous conditions if water or power is cut. Rather than face such an inconvenience, owners usually quickly pay when faced with this reality. It isn’t fair to force neighbors to cover the utility bills of a delinquent owner.
As a homeowner, don’t be afraid to ask questions about where your money is going because it is, in fact, your money. You have every right to know how it’s being applied. It is important that you understand where these dollars go, so no one gets left in the dark asking, “Who turned off the lights?”