Fees

Started by ChristineC5 • 15 replies • 813 views

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ChristineC5
Posts: 6

Posted:

Do you charge HOA initiation fees? We are an older small community (41 units) and have never charged an initiation fee for new owners - is 2 months of the regular HOA fee a good starting point? Also do you charge owners a rental fee if they have the capability to rent out their unit, what about charging the same rental fee to people that get approved for hardship renting?

GenoS
Posts: 4,262

Posted:

We don't. The answers to your questions are in your governing documents. Do those documents give the board the authority to charge an initiation fee? If not then you shouldn't do it, in my opinion.

TimB4
Posts: 20,986

Posted:

Christine,

As others have said, the Board can't simply do this on their own without proper authority.
This authority needs to be within the covenants (not any other document).

If the authority isn't there, then you need to amend the covenants to allow such a fee or not charge one.

ChristineC5
Posts: 6

Posted:

My apologies, we are working on redoing our governing documents and adding some additional fees to offset raising our monthly dues and I am wondering what other associations do!

ChristineC5
Posts: 6

Posted:

My apologies, we are working on redoing our governing documents and adding some additional fees to offset raising our monthly dues and I am wondering what other associations do!

ChristineC5
Posts: 6

Posted:

Thanks Tim, we are working on redoing our documents and want to add these items!

DouglasK1
Posts: 2,038

Posted:

I am against fees that have no basis in corresponding HOA expenses. If the association needs more money to operate, set the dues accordingly.

Escaped former treasurer and director of a self managed association.

JohnC46
Posts: 14,230

Posted:

Can fees be added? Yes.

There are associations that have "charges". I have seen 1.5% of sales price. Implementing such if not in the original docs will take a Covenant change which will probably require at least 2/3rds of all owners approving.

ChristineC5
Posts: 6

Posted:

Thanks John - we are currently working on redoing our docs which will require the 2/3 vote so we want to make sure we have everything covered. Our documents are as old as our property and other than charging a special assessment or raising monthly fees we are looking at a few small ways to add some $$ to our reserves.

TimB4
Posts: 20,986

Posted:

Christine,

You will likely have to raise assessments. When my Association did it's first Reserve Study, it was determined that we needed a 20% increase to properly fund the Reserves. It took a year of education and two votes (to meet quorum), but the membership supported the increase.

I believe the increase had the support because the Association took the time to educate.

MelissaP1
Posts: 13,734

Posted:

Bad idea... Consider your HOA's selling rate? Are you getting enough buyers to make a difference? It's much better to raise the dues or have a special assessment than pass it onto potential buyers. Raised dues/special assessments are more of a sure thing than potential sales.

Plus your HOA's purpose is to ATTRACT potential homebuyers. I am sure some will reconsider hearing there is an additional fee of some sort. Plus it may be hard to collect. Would need to check your state laws if such fees are collectible.

Former HOA President

LetA
Posts: 2,670

Posted:

I think an initiation fee is silly and will turn away potential buyers. Why do you THINK it is even necessary to charge an invitation fee? When the HOA was established,
the builder funded the association, so your "need" for more fees are out the window.

TimM11
Posts: 354

Posted:

We don't have these fees and I would oppose adding them in my HOA. Everyone is going to end up paying them at some point anyway in the long run, so why break them out separately? If assessments need to be raised, they need to be raised.

CjC
Posts: 207

Posted:

Also don't shoot yourself in the foot. We have a mandatory "community improvement fee" of $1000 per house sale. But if you move within the community (we have 3000 homes and it happens frequently), you still have to pay. There is no way to waive the fee, that is not allowed in the covenants. Use specific language for what you need - ie- new member set up fee etc so existing members don't double pay.

ChristineC5
Posts: 6

Posted:

We survived some neighboring HOA's and they all charge new owners a HOA initiation fee (2 months the monthly fee) and about 70% of them charge rental fees of $750 a year to homeowners who have rental permits within the community. Numerous realtors have commented to our HOA staff that they are totally surprised we don't do that!

JanetB2
Posts: 4,213

Posted:

Check with your HOA attorney or research your State Statutes. In my state I would contend that could be potentially illegal. However, if other HOA’s in your state are doing so, then you need to just make sure via your own attorney they are not violating any statutes. I have seen some HOA’s play follow the leader and then later find out they followed the wrong leader and end up paying for their wrong decision.

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