JW Baelly  /  Journal  /  HOA dues, explained

Guide · No. 03

HOA: what your dues actually cover

My Korean-American clients usually come from single-family homes where HOAs don't exist. They are caught off guard by what HOAs do and don't cover. Here is the short course.

8 min readUpdated 2026By JW Baelly

01 What an HOA actually is

An HOA — Homeowners Association — is a private organization that governs a shared property: a condo building, a townhome complex, or sometimes a single-family neighborhood with shared amenities. Owners are members. Members pay monthly dues. The HOA uses the dues to maintain the shared property and enforce its rules.

In LA, you'll encounter HOAs most often in condos (almost always), townhomes (usually), and gated single-family communities (sometimes). They are governed by three documents you must read before buying: the CC&Rs (Covenants, Conditions & Restrictions — the rules), the bylaws (how the HOA operates), and the budget plus reserve study (the money).

02 What dues typically cover

In a typical LA condo HOA, your monthly dues usually cover: building exterior maintenance, roof, common-area landscaping, hallway and lobby utilities, master insurance for the building shell, trash, water (sometimes), and reserves for big future expenses like the roof and elevators.

What dues usually do NOT cover: your unit's interior, your contents insurance (you need an HO-6 policy), utilities inside your unit, and anything inside your walls. The dividing line varies by building — read the CC&Rs.

03 The reserve study: the most important document

The reserve study is a financial document that lists every major component of the building (roof, plumbing, elevator, etc.), its expected lifespan, and the estimated cost to replace it. It also says how much money the HOA currently has saved for that replacement.

Look for the 'percent funded' number. Above 70% is healthy. 30-70% means deferred maintenance is likely. Below 30% means a special assessment is coming. Special assessments are when the HOA bills owners for tens of thousands of dollars at once because they don't have enough in reserves. You don't want to inherit one of those.

Also look at the trend. Has reserve funding been improving year over year, or declining? An HOA that's catching up is recoverable. One that's slowly going broke is a warning sign.

04 The seven questions to ask

Every buyer touring an HOA-governed property should ask their agent these seven questions before writing an offer:

• What are the monthly dues? And have they gone up in the last three years? If yes, by how much?
• Has there been a special assessment in the last five years? What was it for, and how much?
• What's the percent funded on reserves? If they don't know, ask for the reserve study.
• Are there any pending lawsuits against the HOA? Pending litigation can scare away buyers' lenders.
• What's the rental policy? Some HOAs ban short-term rentals or cap how many units can be rented. If you ever want to rent the unit out, you need to know.
• What are the pet restrictions? Even if you don't have pets now.
• What renovations require HOA approval? In some buildings, even changing your floors requires permission.

05 When an HOA is worth it

HOAs get a bad reputation, often deserved. But a well-run HOA can be a real asset. You don't deal with the roof. You don't deal with the landscaping. You don't deal with painting the building exterior every seven years. For some owners — especially older buyers or busy professionals — that's worth a lot.

The trick is finding a well-run one. The signs: reserves above 70%, no recent special assessments, dues that have grown modestly (not in big jumps), and a board that meets regularly with published minutes. Those signs are visible in the documents — you just have to read them.

I review HOA documents with every condo or townhome buyer I represent. It's the most boring part of the process and the most likely place to catch an expensive surprise. Boring is good here.