HOA Home Sale Transfer Fees: income enhancement

Stan,
I agree that these fees are excessive. I always point to the charges for Document transfer which was a charge many many years ago when coping the files and the CC&Rs were done and then overnighted or delivered to the Title company. As anyone that has ever used a computer knows this is now emailed and the cost is zero. This is just a profit item for the PMC.

The only way to get these fees reduced is at contract time with the MC. Don't think it is going to be easy because these profit centers really add up if you have a community that has many homes sales annually.

Mark--

The fees may be excessive in some instances. Lets be clear what we are talking about:

1. Some Associations charge a transfer fee when a property changes hands. None of our clients have this requirement so I don't know what it is for. A previous client charged an "Initiation Fee" when the property changed hands, it was made clear the fee could be paid by the buyer, the seller, they could split it, the RE agents could split paying for it, whatever. The Association only required it be collected by the title company and remitted to the association following closing. The MC did not receive any of the initiation fee.

2. Resale Certificate Package Preparation Fee. We do charge for preparation of the resale package and inform the seller of the amount when we become aware the property is listed. This fee is not in our contract as it is not under the purview of the association in any way. The fee is purely and simply to compensate for the activities and time required to produce the package, complete forms from the mortgage company, address issues identified during the property inspection, make changes in the association billing and other systems, and deal with the RE agents, mostly the seller's agent.

We will not back away from or back down on this fee. One recent sale of a very high six figure property eventually required 2.5 hours just to complete documents desired by the mortgage company and respond to their questions, field 35 telephone calls from the RE agents, the mortgage company, and the inspector, and attend two on property meetings with the listing agent. We estimate we spent close to six hours on this, not including the time required to make changes in the accounting and other systems, archive records, etc.

As a result we are changing our fee structure: a flat fee which includes some number of hours, and an hourly rate billed in 15 minute increments if the initial hours are included. In this way, the sales which amount to mainly electronic document transfers and some interactions will pay a fair amount and scenarios such as I described will pay for the time and services rendered.