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?”
Can individual homeowner utilities only be cut if the association doesn't have the funds to pay common utilities? Referring to:
ReplyDelete"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."
If the Association is in a situation where the funds are no longer available to cover the cost of utilities to individual homeowners, then it is a definite possibility that all homeowners may lose one or more of their utilities. Generally, though, in Associations that allow this type of collections efforts, you only see utilities cut to individual homeowners who have failed to pay the Association fees that fund this service.
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