Lease processing fees

Started by EvaM1 • 12 replies • 2547 views

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EvaM1 (Florida)
Posts: 190

Posted:

Does your HOA charge unit owners with ‘lease processing fees’ and if so what do these fees include? Is it better to include the exact amount in the documents or can we refer to it as ‘reasonable fee’? We charge $50.00 and that amount was approved by the BOD years and years ago and can be only found in the minutes.

AnnaD2 (Florida)
Posts: 960

Posted:

Eva, ours is called an "Application Fee". Our documents state we cannot charge more than $50.00 so that is what we've stuck with.....for years and years and years.

EvaM1 (Florida)
Posts: 190

Posted:

Anna, thank you. Do you do any background checks? Or 'interviews'? Not sure what 'interview' means, may be just a 'review of the Assn rules' with a perspective tenant would be sufficient.

TracieS (Colorado)
Posts: 460

Posted:

Does this mean that your HOA has final approval authority before an owner can rent to whomever they choose? In our association, the association doesn't do anything with renters, as it's all between the owner and the renter. Our docs state that the owner must notify the renter of all association rules...

EvaM1 (Florida)
Posts: 190

Posted:

Tracie,

Technically speaking, we do not rent. We can only lease our units. Our Association does not have the right to reject any lease or sales applications (well there are a couple of exceptions). The intent here is for the Association to be informed about all changes in occupancy. It is spelled out in the covenants under ‘Conveyances’.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Eva,

What is the reason for the processing fee?

EvaM1 (Florida)
Posts: 190

Posted:

Mary,

the minute we moved in secretary showed up and asked us for $50. Ha. And this is how I found out about it. We were new in the community I did not want to even ask what this is all about. Now, I understand the $50.00 is to cover the Association administrative expenses.

Our covenants describe the association and owners responsibilities when the unit is sold or leased and there is nothing about charging fees. So, I even question if the Board has the right to charge owners anything or, if we have to amend the covenants to state that a fee can be charged. What do you think?

But almost all huge condo communities here charge $100/per lease application. They make good money doing it, believe it or not.

AnnaD2 (Florida)
Posts: 960

Posted:

Our documents read in part:

Transfers Subject to Approval: Sale. No unit owner may dispose of a unit or any interest in a unit by sale without approval of the Association.
Lease. No unit owner may lease a unit, without approval of the Association.

Screening Fees. ....for the purpose of defraying the Association's credit and character report expenses in determining whether to approve or disapprove the transaction.

We do "interview" prospective renters, and yes, we do background checks on them. One prospective renter had a rap sheet a mile long with some very serious felony charges. The owner didn't do their homework and when we informed him of this person's background agreed to not rent to him.

"Interviewing" a prospective owner is another story. According to our documents, if we were to do that and decided to turn them down then we are required to buy the unit. We could run a credit check on a prospective buyer to see if they've had foreclosures or bankruptcies but that is what the lender/bank/mortgage company will do anyway.

We've changed our "interview committee" to a "welcoming committee". We meet with the owner and whomever may also be living with them. We tell them about the complex, give them a copy of all the rules and regulations and also copies of all the mass mailing letters residents have received explaining things in the community.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Eva,

I thought this processing fee was only for rentals. In AZ, HOAs and/or mgmt co's charge a transfer fee and a disclosure fee which are paid at closing. My CCRs state the assn may charge a transfer fee. We only charge a disclosure fee, the transfer fee is charged by the mgmt co.

EvaM1 (Florida)
Posts: 190

Posted:

Ann, thank you. Do you have a PI running the background checks?

EvaM1 (Florida)
Posts: 190

Posted:

I thought this processing fee was only for rentals.
_____
Mary,

My fault, sorry. I am trying to untangle the Article: Conveyances. Both Sales and Lease provisions are not only spelled out under the same Article but also in the same paragraph(s). Not sure what the ‘disclosure fee’ is. Is not the Disclosure Summary a responsibility of an owner?

AnnaD2 (Florida)
Posts: 960

Posted:

Eva, thanks to computers most people can obtain a LOT of information that is available to the public. Our county's website lets one look up all official records. They include, adult felony charges, civil cases, traffic tickets, judgements, liens, bankruptcies, mortgage and deed records and tons of other things. Our county sheriff's department has very easy links to look up a person simply by name. One can also look up an address to see if anyone there has an arrest record. The use of a P.I. isn't always necessary these days.

KirkW1 (Texas)
Posts: 1,665

Posted:

I would say that an interview is an invitation for a lawsuit. It just opens the door for someone to say that they were not approved because they are a member of a protected class of citizens. Then the expenses begin.

I would also shy away from right of first refusals in sales. Then again, this right has its roots in working around discrimination laws. Though it didn't pass, there was a bill in Texas to eradicate this right.

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