JimN (North Carolina)
Posts: 1
Posts: 1
Posted:
The President of our association has asked me to explore the viability of the use of an impact fee when any home in our comunity changes hands.
Jim
Jim
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Impact Fees
Started by JimN • 10 replies • 4137 views
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LisaS (Illinois)
Posts: 341
Posts: 341
Posted:
Our association has an "Initial Capital Assessment Fee" built into the Covenants document. We, in essence, charge $100 with every transfer of title. We do exempt refinance from it. It is explained as a buy-in to our association.
Lisa
Lisa
DianeW (Maryland)
Posts: 147
Posts: 147
Posted:
I'm new to this HOA stuff, but forgive me for asking, but why would a $100 transfer fee be necessary? Are there expenses for the HOA that the $100 covers?
Please don't get angry, just asking!
Please don't get angry, just asking!
LarryV (Arizona)
Posts: 4
Posts: 4
Posted:
Some of the expenses that might be involved with a purchase is providing copies of the CC&Rs, ByLaws, calendar of events and other association information, and recording new owner and mailing and other contact information. Some associations may include some additional materials to help welcome and educate them with their new community.
AudreyB (Florida)
Posts: 104
Posts: 104
Posted:
Okay, I've haven't heard of this impact fee either.
Let's say this impact fee is in writing somewhere within the documents. So, what happens if the SELLER refuses to pay the Association the $100 impact fee when the buyer requests their copy of the Association's documents prior to buying said house?
Thank you very much,
Audrey
Let's say this impact fee is in writing somewhere within the documents. So, what happens if the SELLER refuses to pay the Association the $100 impact fee when the buyer requests their copy of the Association's documents prior to buying said house?
Thank you very much,
Audrey
LisaS (Illinois)
Posts: 341
Posts: 341
Posted:
Our $100 fee is basically a 'buy in' to the association. It is written into our Covenants (which existed before our development was even built). It exists because before the Homeowner controlled Board is elected at 80%+ completed construction out of 300 homes, the developer controlled the Board and paid all expenses (about 3 years worth). No yearly assessment was charged until a HOA Board was elected. So the fee funded the original reserves.
Because we are an HOA controlled Board less than 1 year old, we don't have a lot of money in reserve for improvements to landscaping ,lights, etc. This 'fee' to the buyer at closing with the title transfer helps to fund inprovements. We also have to provide covenants copies, update files, provide approval for improvements, etc. We don't charge for any of those things, or anything else business related.
Rather than charge a large amount for yearly assessments (we pay $100 per year currently), the fee remains. The buyer for the house is not responsible for any other yearly assesment in the year they buy their home.
For the person who asked....the buyer cannot refuse to pay. It is written into the Recorded Covenants and is part of the deed/title and if they don't to pay, they should't buy the house. If we do not get a check from closing we send a letter. if we still don't get payment it remains outstanding on their account. Unpaid accounts do not have voting rights in our association. And if balance remains unpaid, ultimately it can be placed into a lien on the property. It may seem a little militant, but we have found in our short time that once people know the consequences they are less likely to 'let things go'.
As a volunteer association, we just don't have time to chase everyone. Most people are happy to have us run a tight ship rather than have to double their fees (or more) by hirig a management. company
Because we are an HOA controlled Board less than 1 year old, we don't have a lot of money in reserve for improvements to landscaping ,lights, etc. This 'fee' to the buyer at closing with the title transfer helps to fund inprovements. We also have to provide covenants copies, update files, provide approval for improvements, etc. We don't charge for any of those things, or anything else business related.
Rather than charge a large amount for yearly assessments (we pay $100 per year currently), the fee remains. The buyer for the house is not responsible for any other yearly assesment in the year they buy their home.
For the person who asked....the buyer cannot refuse to pay. It is written into the Recorded Covenants and is part of the deed/title and if they don't to pay, they should't buy the house. If we do not get a check from closing we send a letter. if we still don't get payment it remains outstanding on their account. Unpaid accounts do not have voting rights in our association. And if balance remains unpaid, ultimately it can be placed into a lien on the property. It may seem a little militant, but we have found in our short time that once people know the consequences they are less likely to 'let things go'.
As a volunteer association, we just don't have time to chase everyone. Most people are happy to have us run a tight ship rather than have to double their fees (or more) by hirig a management. company
KathyS (California)
Posts: 145
Posts: 145
Posted:
Our association doesn't have an impact fee. Our management company charges $300 in order for the seller of the property to transfer the title for the management companies (and association) records. The association doesn't get a penny of that money.
If the previous owner doesn't give the new owner a copy of the governing documents, one year of newsletters and any other applicable paperwork, pool key, pool tag and gate remote the new owner has to pay the management company $50 for the governing documents, $60 for the newsletters, $5 for each page of other paperwork, $25 for a pool key, $25 for a pool id tag and $50 for a gate remote. Again, the association doen't get a penny of the money.
If the previous owner doesn't give the new owner a copy of the governing documents, one year of newsletters and any other applicable paperwork, pool key, pool tag and gate remote the new owner has to pay the management company $50 for the governing documents, $60 for the newsletters, $5 for each page of other paperwork, $25 for a pool key, $25 for a pool id tag and $50 for a gate remote. Again, the association doen't get a penny of the money.
LisaS (Illinois)
Posts: 341
Posts: 341
Posted:
I will keep Kathy's fees in mind the next time someone complains about our $100 fee. It seems criminal that this management company is allowed to charge that much for each of those items. Although the Association may not get a penny of the money, it still YOUR HOA.
Just curious- is the monthly/yearly management fee for the HOA low because of these high transfer fees and other miscellaneous? (ie are they subsidized by this agreement)
Just curious- is the monthly/yearly management fee for the HOA low because of these high transfer fees and other miscellaneous? (ie are they subsidized by this agreement)
JamesK (California)
Posts: 4
Posts: 4
Posted:
I read up on this recently and discovered, in California at least, that the "transfer fee" is only supposed to cover ACTUAL COSTS (copies of CC&Rs, Rules and Regulations, Minutes of Board Meeting reports for past 12 months, etc.). Time involved in copying and distribution, etc., is not to be taken into account and not to be compensated. As it is easy to "pad" the expenses in providing these materials, HOAs have routinely exploited this fee charging sometimes as much as three-hundred dollars, as a means of easy income -- but they do so illegally and unethically. Again, at least in California.
HaroldS (Arizona)
Posts: 906
Posts: 906
Posted:
Welcome to the HOA management company "fees". How dare you question them. Arizona does not allow transfer fees to be collected thru escrow. Demand a detailed listing of the HOA charges before signing. Harold
JulieS (Georgia)
Posts: 412
Posts: 412
Posted:
When new homes in our subdivision were purchased from the builder, each homeowner was required to pay a $100 initiation fee. Each home sale after did not have this requirement.
As our neighborhood is reaching it's 8th year and we are looking at some major repairs and expenses. The only way to pay for these is with increased annual dues, special assessments or a loan. Yes, these would typically be paid through the reserve funds but since the first 5 years years of existance were without a reserve study or fund, the money isn't there. We have increased the annual assessments the past 3 years to build the reserve (with homeowners becoming angry over the increases).
Last year, we decided to amend our covenants to allow for an initiation fee of $150. The first attempt failed due to some angry homeowners trying to remove board members, call of special meeting, etc.
This year, we are trying again but with the initiation fee in the amount of the current year's dues. We only need a few more votes to get the 2/3 vote required to amend the covenants/by-laws.
The board is very excited in that we will have the additional revenue to help build the reserve and to hold the annual assessment increases to a minimum.
On a side note, we were having a hard time getting people to return their consent forms....so when the homeowners come to pick up the new pool keys and sign off on pool rules, we ask them to sign a consent form approving/disapproving the initiation fee amendment. This seems to be working very well.
As our neighborhood is reaching it's 8th year and we are looking at some major repairs and expenses. The only way to pay for these is with increased annual dues, special assessments or a loan. Yes, these would typically be paid through the reserve funds but since the first 5 years years of existance were without a reserve study or fund, the money isn't there. We have increased the annual assessments the past 3 years to build the reserve (with homeowners becoming angry over the increases).
Last year, we decided to amend our covenants to allow for an initiation fee of $150. The first attempt failed due to some angry homeowners trying to remove board members, call of special meeting, etc.
This year, we are trying again but with the initiation fee in the amount of the current year's dues. We only need a few more votes to get the 2/3 vote required to amend the covenants/by-laws.
The board is very excited in that we will have the additional revenue to help build the reserve and to hold the annual assessment increases to a minimum.
On a side note, we were having a hard time getting people to return their consent forms....so when the homeowners come to pick up the new pool keys and sign off on pool rules, we ask them to sign a consent form approving/disapproving the initiation fee amendment. This seems to be working very well.
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