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'Quiet' fee irks homeowners group

Started by GeorgerwilliamsW • 4 replies • 1126 views

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GeorgerwilliamsW (Indiana)
Posts: 975
Posted:
From the Arizona Daily Star:

'Quiet' fee irks homeowners group
Says management firms don't disclose they make money during property sale

http://www.azstarnet.com/business/254102

    A Northwest Side homeowners association discovered its old community-management company was quietly making money off the area's home sales during the housing boom without the HOA board's knowledge.
    Now, after hammering out a contract with a new management company, the board wants other associations to look at their own contracts so they know who is paid when homes are sold in their communities.


First rogue boards, now rogue management companies.

MaryA1 (Arizona)
Posts: 7,043
Posted:
Probably a case of the mgmt co running the assn w/o BOD participation. Sadly, this happens in a very large % of HOAs.
KirkW1 (Texas)
Posts: 1,665
Posted:
While I have issues with the HOA not knowing, the fact is that charging seperately for transfers is standard business practice. And there are real additional costs associated with the transfer process. There is also a liability in taking care of it because the management company pays should they disclose the wrong amount to the title company.

I wouldn't bet that they simply didn't read their contract well enough.
MaryA1 (Arizona)
Posts: 7,043
Posted:
Quote:
Posted By KirkW1 on 08/25/2008 12:19 PM
While I have issues with the HOA not knowing, the fact is that charging seperately for transfers is standard business practice. And there are real additional costs associated with the transfer process. There is also a liability in taking care of it because the management company pays should they disclose the wrong amount to the title company.

I wouldn't bet that they simply didn't read their contract well enough.

Kirk,

True! The fee is generally listed in the contract (I say generally only because I haven't seen EVERY contract and George says I shouldn't make blanket statements! ) I don't know if this reporter was trying to allude that additional fees were being charged -- meaning fees not shown in their contract. As we all know, reporters don't always get the whole story nor do they always tell the story correctly!
KirkW1 (Texas)
Posts: 1,665
Posted:
Well in our contract the fees are disclosed in an addendum. But there are two addendums mentioned specifically in the contract.

I do think that many HOAs are run by the management association. Most developers likely prefer to let the management company run the show. And then many others don't really bother to get involved.

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