HB2119
This following clause regarding transfer fees is included in the mgmt agent contract. Does this mean transfer fees can still be charged or does the new law prevail and neither the mgmt agent or the association can charge a transfer fee?
5.6 Transfer of Ownership. Managing Agent shall charge lot/unit owner transfer related fees (transfer/refinance/statement of account/resale certificate/disclosure package) when a transfer of ownership occurs or when an owner, title company, or owner’s agent requests such service. If Managing Agent’s transfer related fees are paid to Association, or if such fees are no longer permitted to be charged by Managing Agent directly to owner, for any reason, Association shall promptly pay such amounts directly to Managing Agent. If such fees are not paid at closing, Association shall collect such fees from the owner and pay such fees to Managing Agent.
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Kathy
There are two types of fees that an association can charge relative to sale and title transfers. The resale disclosure fee which is maxed by law at $400 address the normal disclosure and services association with the sale of a property in these communities. The second fee is related to title transfers and pertains to fees association with contributions to reserve accounts if authorized in the declaration. The is no limit to this later fee and I’ve seen some as large as $10,000. The new legislation applies only to the latter and simply states that those fees cannot be charges to simple title transfers between related parties.
The earlier fee is authorized to the association, but most management company contracts have this fee go to the management company. The language you cite is very typical. I personally don’t like the concept because traceability of the fee is lost if it is paid directly to the management company. If the fee is paid to the association, then the record of that transaction is an association record subject to record request, if the fee is paid directly to the management company, then the record of that transaction is private and not subject to records request by homeowners. The law applies very strict penalties for violation of this fee but if the record of that transaction is not available to homeowners, then they lack the evidence to present in court to assess violations of the law.
Dennis