Are HOA fees making you second-guess a Scottsdale home you love? You are not alone. With so many condos, townhomes, and resort-style communities across the city, it can be hard to tell what you are really paying for and whether the numbers make sense. In this guide, you will learn what HOA fees typically cover, how they affect your mortgage and budget, which documents to review, and the red flags to watch for in Scottsdale. Let’s dive in.
What HOA fees cover in Scottsdale
In Scottsdale, HOAs fund the shared services that keep communities running and looking their best. Typical line items include landscaping and irrigation, pool and spa care, exterior maintenance for buildings and gates, and common-area lighting and sidewalks. Many associations also pay for master insurance on common elements and sometimes exterior building coverage.
Some communities include utilities such as water, sewer, trash, or cable under monthly dues. Others fund on-site staff, security, or a community center. In a desert climate, irrigation systems and pool operations are recurring cost drivers, so it is important to see how your HOA manages water use and maintenance.
Why fees vary across communities
Fees depend on property type and amenities. Condominiums often have higher monthly dues because owners share utilities, building systems, and exterior upkeep. Townhomes and single-family homes may have lower dues if the HOA maintains only common areas and a gated entry.
Master-planned and resort-style neighborhoods sometimes command higher dues because of expanded amenities, from fitness centers to multiple pools. Always compare the fee to the services provided. A higher fee that includes water, trash, and roof maintenance might be more predictable than a lower fee with frequent add-ons.
Arizona HOA rules that affect you
In Arizona, HOAs operate under state statutes and their governing documents, including CC&Rs, bylaws, and rules. These documents define what the association can enforce and how it collects assessments. Associations can levy fines and place liens for unpaid dues, subject to legal procedures.
Before you close, expect a resale packet or estoppel certificate from the HOA or its management company. This package outlines current assessments, any special assessments, budgets, insurance coverage, and whether the specific home has outstanding fines or liens. Review it carefully and note that the information is time sensitive.
If you are using FHA or VA financing for a condominium, the project must meet specific eligibility standards. Conventional loans also follow project guidelines. Ask your lender early about condo project approval to avoid surprises.
How fees affect your budget and loan
Lenders include monthly HOA dues in your debt-to-income ratio. That means the fee can influence how much you can borrow. Build dues into your monthly budget along with taxes, insurance, and utilities.
Know what the master insurance policy covers. Many condo policies protect common areas and sometimes building exteriors, but not the interior of your unit or your belongings. Plan for an HO-6 or appropriate homeowner policy to cover interior finishes and personal property. HOA dues are generally not tax-deductible for primary residences, so talk with a tax professional about your situation.
Reserves, special assessments, and your risk
Healthy reserve funds protect owners from big one-time bills. Reserves are savings for major repairs and replacements, such as roofs, paving, or pool equipment. The best practice is to complete routine reserve studies and fund reserves according to the findings.
If reserves and the annual budget fall short, the board can levy a special assessment. These charges can be significant and may come with short payment timelines. Ask for the current reserve study, reserve balance, and any planned capital projects in the next one to five years.
Due diligence checklist for buyers
The right documents will tell you whether fees are reasonable and sustainable. Request these as early as possible in escrow.
Documents to request
- CC&Rs, bylaws, and rules
- Current annual budget and recent financial statements
- Reserve study and schedule of planned projects
- Board meeting minutes from the past 12 to 24 months
- Master insurance certificates and deductibles
- Resale packet or estoppel certificate, including all one-time transfer or capital contribution fees
- List of any pending litigation and the management contract
Key questions to ask
- What do monthly dues cover exactly, including utilities and insurance?
- How often have special assessments occurred in the past 5 to 10 years and why?
- What is the reserve balance and funding level, and is there a current reserve study?
- What is the delinquency rate on dues and how does the HOA handle collections?
- Are there rental, pet, or short-term rental restrictions, and are any changes pending?
- Is the community approved for FHA or VA financing, and are there known lender issues?
Red flags to watch
- No reserve study or very low reserves relative to expected needs
- Frequent or recent large special assessments
- High owner delinquency or ongoing collections litigation
- Repeated board turnover or disputes with management
- Opaque financial statements or missing meeting minutes
- Construction defect or other lawsuits involving the HOA
Scottsdale considerations and lifestyle trade-offs
Scottsdale’s mix of condos, townhomes, and gated subdivisions means HOAs are common. Amenities like pools, gyms, and community centers support a lock-and-leave lifestyle that many second-home and seasonal owners value. Higher dues can make life easier if they reduce surprise costs and exterior maintenance on your end.
Short-term rentals are a hot topic. The City of Scottsdale has adopted local rules for short-term rentals that include registration, safety, occupancy, and tax requirements. Your HOA may also restrict or prohibit short-term rentals. If you plan to rent, confirm both the HOA’s rules and the city’s requirements before you buy.
Pools, irrigation, and exterior projects may require both HOA approval and city permits. Build some lead time into any renovation plan that touches exteriors or common areas.
Offer strategy when HOA factors matter
If HOA documents reveal an upcoming special assessment, you can ask the seller to pay it at closing, request an escrow holdback, negotiate a price reduction, or walk away if it no longer fits your risk tolerance. Clarify whether the assessment will be invoiced before or after closing.
If a major capital project is scheduled, confirm the funding source. A fully funded reserve is a good sign. A project that depends on a future assessment may affect your timeline and budget.
How Those Callaways can help
You deserve a clear picture before you commit. Our specialist team helps you request the right documents early, interpret budgets and reserve studies, and coordinate with your lender about condo project eligibility. We can also connect you with insurance professionals to align your HO-6 or homeowner policy with the master policy.
With decades of Scottsdale experience, we know the local nuances, from water-wise landscaping to community rules that affect rentals and renovations. Our Clients First approach means we move at your pace, explain your options, and help you choose the home and HOA that fit your goals.
Ready to buy with confidence? Reach out to Those Callaways to start the conversation.
FAQs
Why Scottsdale HOA fees vary so much
- Fees depend on property type, amenities, what utilities and insurance are included, and how well reserves are funded.
What a resale packet includes and why it matters
- Expect the current assessment amount, special assessments, financials, insurance details, rules, and any outstanding fines or liens. It is your snapshot of risk.
Whether an HOA can levy a special assessment
- Yes. Boards can levy one-time assessments per governing documents when reserves or budgets cannot cover major repairs or unexpected costs.
How HOA fees affect mortgage approval
- Lenders include dues in your debt-to-income ratio, and condo project eligibility can influence FHA, VA, and conventional loan options.
If you plan short-term rentals in Scottsdale
- Check both your HOA’s rules and the City of Scottsdale’s short-term rental requirements. Either one can limit or prohibit STRs.
Whether HOA dues are tax-deductible for buyers
- Dues are generally not tax-deductible for primary residences. Consult a tax professional for guidance on your situation.
