Homeowners associations charge regular dues as a way to pay for the common expenses of the community. But, how much can residents expect to pay in Tennessee national HOA fees? Find out below.
Understanding Tennessee National HOA Fees
Like other states, Tennessee is home to many homeowners associations. These associations are known for the role they play in preserving curb appeal as well as property values. Members of an association, though, must usually pay a regular fee as part of their contribution to the operating fund. The HOA uses this fund to pay for various common expenses in the community.
HOA fees, also known as HOA dues, are typically determined by the HOA board. Every year, the board anticipates upcoming expenses and divides the total among the members of the community. Some HOAs, particularly condos, calculate fees on a percentage basis.
As no two homeowners associations are exactly alike, fees can vary from one HOA to another. Some of the factors that can influence these fees are as follows:
- The location of the homeowners association, as those in more affluent neighborhoods, tend to command higher dues;
- The nature of the association’s common elements or amenities; and/or,
- Reserve fund status.
Average HOA Fees in Tennessee
Homeowners association fees can vary greatly from state to state, even from city to city. In the United States, New York ranks first among states with the most expenses HOA fees, with a median monthly fee of $570. Hawaii follows in a close second, with a median monthly fee of $520. The state with the cheapest HOA dues is Wyoming, with a median monthly fee of $100.
In Tennessee, the median monthly HOA fee is $150, making it the state with the fifth-lowest dues. To put it into perspective, HOA dues account for 12.4 percent of total monthly housing costs in the Volunteer State.
In comparison, the median monthly HOA fee nationwide is $290. That means Tennessee boasts monthly HOA dues that are lower than the national median.
Of course, as detailed above, a handful of factors can affect Tennessee national HOA fees. For instance, while there are communities that charge $150 a month in dues in Nashville, dues can also go as high as $500 a month.
Can HOAs Raise Fees in Tennessee?
When purchasing a home in Tennessee, buyers consider a wide variety of things — one of them being monthly HOA dues. After all, the cost is a primary concern among most buyers.
But, Tennessee HOA fees will not stay the same forever. For many homeowners associations, it is normal to raise dues every so often. And there are several reasons why an HOA may feel the need to do so, such as:
- The rising cost of goods and services
- Insufficient reserve funds
- Unanticipated repairs or events
One question many homeowners ask, though, is whether or not an HOA can even raise fees in Tennessee. And, if they can, is there a limit?
Generally, homeowners associations in Tennessee can increase fees even without getting approval from the membership. It is usually within the discretion of the board to raise fees or not depending on the needs of the budget. There are currently no state laws that limit how much an HOA can raise the fees.
It is important to check your governing documents, though, for any provisions concerning HOA fees. Some associations have it written within their bylaws or CC&Rs that increases of more than a certain percentage will require approval from the membership. Others set a dollar amount.
Imposing Special Assessments
On some occasions, homeowners associations will need to collect special assessments from members. Special assessments are not part of owners’ regular dues. Instead, they are one-time fees that HOAs charge for a number of possible reasons.
More often than not, an HOA will impose a special assessment because of unexpected costs such as emergency repairs. Other times, an HOA will charge the assessment due to a budget deficit as a result of a high delinquency rate. This simply means that too many members have stopped paying their fees, leading to a shortfall in the operating fund.
As with regular dues, Tennessee has no laws that regulate how much an association may charge in special assessments. But, individual HOAs may have their own provisions within their governing documents.
What About HOA Fines?
In addition to suspending member privileges, many homeowners associations impose monetary fines as a way to deter rule violations. Fines can range from as little as $50 to a few hundred dollars, depending on the severity of the breach.
But, associations can also charge a fine for the late payment of fees. According to the Tennessee Condominium Act of 2008, condos created after January 1, 2009, may charge fines, but they must be reasonable. No laws currently exist, though, when it comes to fines charged by single-family communities and older condo associations.
Liens and Foreclosures as a Result of Nonpayment
It is not uncommon for homeowners associations to attach a lien to the property of a member who has defaulted on their dues. In Tennessee, condo associations bear the power to place a lien. The lien automatically attaches to the property when the fees become due. The COA can then perfect the lien by recording it with the county recorder’s office.
Condo associations may also choose to initiate foreclosure proceedings after perfecting the lien. They may take the judicial or non-judicial route to foreclosure. Keep in mind that liens only remain in effect for 6 years before they expire. As such, COAs must make sure to foreclose within the given timeframe.
However, when it comes to single-family HOA communities, state statutes are silent. Thus, homeowners associations should look to their governing documents for guidance. Your bylaws or CC&Rs will typically let you know whether or not it is within your authority to use liens and foreclose.
A Word of Caution
Given that Tennessee national HOA fees are pretty low, the housing market in this state is definitely attractive. But, HOA fees can increase over time, and associations can also charge special assessments. As such, owners must be prepared to always fulfill their financial obligations to the association. Otherwise, they risk incurring fines or, worse yet, facing foreclosure.
Cedar Management Group can help your homeowners association with many things, including HOA fees calculation and collection. Call us today at (877) 252-3327) or contact us online to learn more about our services.