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I am currently in the process of buying a home at a new community. My home is part of phase 1 out of 4 phases and will be ready for move-in prior to the completion of the entire community. But the developer will require me to start paying the HOA fees when I move in.

Is it typical to start charging HOA fees before a community is fully built? By the time I am ready to move in, the common areas the HOA takes care of still will not be ready and there will be a great of noise and dust.

Edit: Thanks to all who responded! I am surprised this post attracted so many comments and answers.

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    Why do you think it is illegal? If you have that little faith in the builder perhaps you should buy a different home. This is a common situation in many states.
    – Pete B.
    Commented Feb 8, 2022 at 18:12
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    My comment was rhetorical. What you want or think is "fair" is not how an HOA operates. Good luck as you discover more fun things that HOAs do...
    – MonkeyZeus
    Commented Feb 8, 2022 at 18:48
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    Here are some of those fun things: law.stackexchange.com/q/71149
    – MonkeyZeus
    Commented Feb 8, 2022 at 18:50
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    @Concerned_Citizen As a member of our HOA board I'd have to warn that you often have precious little agency and control over anything unless there are like minds on the board with you. Sometimes not even then; changing many of our bylaws, for instance, requires 90% of community members to sign...none of those have ever changed. In two years I have accomplished nothing on my board and wasted countless hours. In the end the easiest solution (and the one many HOA members chose after experiencing an HOA first hand) is to sell and build a new house outside of an HOA.
    – Nicholas
    Commented Feb 9, 2022 at 13:55
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    @Nicholas From my comment on the law.stackexchange question: "You don't join an HOA because you wish to be controlled; you join because you wish to control your neighbors."
    – MonkeyZeus
    Commented Feb 9, 2022 at 14:08

5 Answers 5

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Yes, it is typical and usual to pay HOA fees after moving in because you will be part of the community and will be consuming services (trash pickup, for example) immediately. When the new phases are completed, those new homeowners will join the HOA as they move in, too. You're being treated fairly.

Keep in mind you can always join the HOA board if you want to be more involved in how your dues are spent.

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    Don’t you pay the county or city for trash pickup?
    – RonJohn
    Commented Feb 8, 2022 at 22:23
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    @RonJohn depending on the building, someone needs to collect all the trash containers form their respective trash rooms and take them out to the street/truck accessible location for the city service to collect.
    – littleadv
    Commented Feb 8, 2022 at 22:34
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    @RonJohn In a lot of places, communities in unincorporated areas form HOAs because there isn't a municipal government to handle those sorts of things. The HOA pays for trash, road maintenance, etc. from dues the same way a house in city limits would pay for those things via taxes.
    – bta
    Commented Feb 9, 2022 at 4:06
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    If the HOA board is controlled by the developer (which could potentially be for many years if the community is still in the early phases of development), joining the board may not be an option or may not provide significant involvement in how dues are spent until control is transferred.
    – Zach Lipton
    Commented Feb 9, 2022 at 7:06
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    "you're being treated fairly" well, at least as fair as HOAs are in the first place...
    – corsiKa
    Commented Feb 10, 2022 at 23:21
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It is normal to be required to start paying the HOA fees even though the community isn't fully completed. As others have stated there are some things that start day one, and others that phase in over the years.

You might find that the HOA fee jumps after the builder no longer has most of the seats on the board. The builder wants to keep the HOA fees low as long as possible, so they neglect building the emergency fund, and the capital replacement fund. That fund it to replace the roof on the clubhouse in 20 years, or to pave the parking lot next decade.

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  • Perhaps not universal. There are places in the world where builder hires connected companies for maintenance and tries to keep fees as high as possible.
    – akostadinov
    Commented Feb 11, 2022 at 11:15
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Don't forget that a new neighborhood can take a very long time to build out. One near me built a handful of phases, lost their developer, took several years to find another, and finally finished building over 10 years after they broke ground on the first home. If they waited to collect dues until everything was finished, the HOA wouldn't have been able to maintain any of the amenities and would have gone bankrupt. Not to mention, many HOAs carry debt from the loans that were used to run utility lines, build roads, etc. No lender would have lent them money if it was going to be years before they had any ability to start repayment.

A lot of these HOA expenses are essentially invisible, especially during the early stages of a neighborhood buildout, so I completely understand how it feels like you're paying for nothing. If you're curious about what exactly is going on, get a copy of the previous year's budget from your HOA board (most locales require them to be available to members on request). You'll be able to see all sorts of expenses that you probably haven't thought about before.

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HOA fees cover a multitude of services depending on the features of the development as well as the contents of the by-laws Some of the many possibilities include:

  • Swimming pool
  • Clubhouse
  • Tennis courts
  • Landscaping
  • Common Area between homes
  • Elevators
  • Utilities (street lights, garbage disposal, electricity, water/sewer, Internet and/or TV contract, home alarm)
  • Insurance
  • Irrigation
  • Security
  • Property Management Company
  • Accountant, Lawyer
  • Etc.

Once you move in, you will be utilizing many of these services. They aren't free.

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    Thanks for the response. I am not questioning the legitimacy of the HOA fees nor do I expect to have those services for free. All I want to confirm is whether it's typical to start charging the full HOA amount when the community is not even completed.
    – Concerned_Citizen
    Commented Feb 8, 2022 at 19:30
  • What services won’t you receive when it first opens?
    – RonJohn
    Commented Feb 8, 2022 at 22:25
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    @RonJohn Depending on the community, there may be a clubhouse or other shared amenities that are not completed by the time the first homes are ready for move-in.
    – manassehkatz-Moving 2 Codidact
    Commented Feb 9, 2022 at 14:03
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    Social facilities are less likely to be completed in the early phase (swimming pool, tennis courts, clubhouse, golf course).
    – Bob Baerker
    Commented Feb 9, 2022 at 15:25
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Since it sounds like you are in the process of drafting your offer, you have negotiating power to create an addendum to your offer for consideration such as

  • a lump sum credit from the seller at closing (e.g. calculate the net present value of the fee for however long you think is fair to you to not be responsible for it) and then you pay on schedule after closing;
  • or given that it sounds like the selling developer is also running the HOA for now, the seller agrees to waive or pay the fee for a defined period of time or until a specific condition is met, such as your desired specific amenities are completed and open for use, or the developer no longer controls the HOA.

This can be done in a way that the seller's asking price will show up without a discount in comps (while effectively giving you a discount) should that be their sticking point.

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