Master Association Fees in Property Management: A Complete Guide
Master association fees are regular payments made by property owners to a parent-level homeowners association—a master association that oversees multiple smaller associations, or sub-associations, within a large development
Managing properties in large planned communities involves more than just regular HOA dues. One often-overlooked piece of the puzzle? Master association fees. These fees can significantly impact property budgets, homeowner satisfaction, and even the legal standing of an association. In this guide, we’ll unpack what master association fees are, how they work, the legal framework that supports them, and the best practices for keeping them manageable.
You’ll learn: what master association fees are, how they apply in practice, legal risks, and actionable strategies.
What Are Master Association Fees?
Master association fees are regular payments made by property owners to a parent-level homeowners association—a master association that oversees multiple smaller associations, or sub-associations, within a large development. These fees are distinct from regular HOA dues paid to neighborhood-level associations.
In essence, a master association manages community-wide amenities and infrastructure that serve all sub-associations: main roads, clubhouses, large parks, or commercial spaces. Think of it as the HOA for your HOA.
Master vs. Sub-Association Responsibilities
Community Governance Framework
Key Variants and Terms
- Sub-association: Your immediate neighborhood's HOA
- Dedicatory instruments: Legal documents that outline the authority of the master association
- Initiation fee: One-time payment when a new owner joins the association
You can read more about how these fees contribute to shared costs in our guide to Common Area Maintenance (CAM) fees.
According to Texas Property Code Chapter 215, a master mixed-use property owners' association includes multiple residential and commercial properties under unified oversight. Definitions vary by state, but the role of the master association remains consistently central.
Why It Matters: Operational Impact and Real-World Use
Financial & Operational Impact
Master association fees often make up 5% to 10% of total community budgets, with fees ranging from $100 to $500 per unit per month. Failing to properly budget for these expenses can lead to special assessments that frustrate owners, underfunded reserves, and legal action due to missed obligations (source).
Missing this detail could cost you thousands in back charges.
Reserve funds and management company fees also get wrapped into these dues, making them a crucial piece of financial planning for property managers. If you're unsure how long-term projects fit into this budget, our article on capital improvement funding offers helpful insights.
Where Your Master Association Fee Goes
Example: Two Layers, One Confused Owner
- Challenge: A condo owner in a mixed-use development was surprised by a $1,000 "special assessment" from the master HOA, on top of their regular $300 sub-association dues.
- Solution: The property manager clarified which amenities each fee covered and improved fee transparency with a quarterly newsletter.
- Outcome: Reduced owner complaints and avoided future disputes.
- Takeaway: Clear communication about fee layers can prevent costly confusion.
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Legal & Compliance Essentials
Master associations are governed by a mix of federal and state laws.
Key Legal Pitfalls
- Late fees and interest can accrue rapidly
- Unpaid fees may result in liens and foreclosure
- Associations must disclose budgets and contact information per state law
Do/Don't List
- DO: Review governing documents regularly
- DON'T: Assume your sub-association controls master-level decisions
- DO: Understand how fee increases are approved
- DON'T: Ignore open meeting requirements such as those outlined in Texas HOA laws
HUD guidelines (HUD Mortgagee Letter 2013-18) also clarify how master association fees are treated during foreclosure proceedings, reinforcing the importance of proper fee handling.
Best Practices for Managing Master Association Fees
1. Build Reserve Funds Early
What: Start saving for large capital repairs from Day 1.
Why: Avoid special assessments.
How: Use a reserve study every 3-5 years.
2. Clarify Responsibilities in Governing Documents
What: Define what the master handles vs. sub-associations.
Why: Prevent confusion and duplication.
How: Include a visual chart in owner packets.
3. Communicate Proactively
What: Send fee breakdowns and usage reports.
Why: Increases transparency and trust.
How: Use newsletters and online portals. For help communicating with renters, visit our resource on tenant responsibilities in HOA communities.
For further reading, the Community Associations Institute provides education and certification programs that reinforce these best practices.
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Key Questions Answered
What's the difference between a master association and a sub-association?
A master association handles shared amenities and infrastructure across the entire community, while sub-associations focus on neighborhood-level maintenance and rules.
Can a master association fee increase without owner approval?
Sometimes. It depends on your governing documents and state law. In Texas, some fee increases must be discussed in open meetings.
Are master association fees tax-deductible?
Usually not. For residential properties, these are considered personal expenses. You can review IRS Section 528 for more information about how HOA dues are treated.
Conclusion & Resources
Key Takeaways:
- Master association fees are separate from neighborhood HOA dues
- Misunderstanding them can lead to legal and financial trouble
- Clear documents, good communication, and strong reserves = success
If you manage or invest in properties within a master-planned community, understanding these fees isn't optional—it's essential.
For more definitions and context, check out our property management terminology glossary. Learn how to maximize property value through amenity planning, or dive deeper into large-scale community management.
Legal Disclaimer: The information on this website is sourced from publicly available materials and is provided for general informational purposes only. It is not intended as legal, financial, or accounting advice. LandlordDoc.com makes no guarantees about the accuracy or completeness of the information and assumes no liability for any errors, omissions, or outcomes related to its use.
