Spotlight is on sale transfer fees

The HOA, or homeowners association, home sale transfer fee costs homeowners upwards of $10 million a year and can range from $200 to more than $1,000 per sale.

There are a few issues you should be aware of regarding these home sale transfer fees: • The fee doesn’t benefit HOAs; •Theamountissetbythe HOA’s property management company, which retains the fee; • The fee is not required by law; • The fee can prevent FHA loan financing; and

• The fee isn’t documented on a receipt to the payee — unlike other invoices you pay, there is no line item provided explaining what you are paying for. It’s just “pay it or your home will not be sold.”

Worse yet, these transfer fee services have already been paid for with HOA dues, resulting in duplicate billing to the home seller.

The fee has been protested as being an unfair and deceptive business practice for years, but the Colorado legislature has failed to react. In fact, bills introduced by the Colorado HOA Forum, a homeowner’s advocacy organization, to require a detailed receipt to support the $350 transfer fee charged were killed by lobbyists from the property management company industry.

What does this tell you about transparency and fees justification?

Now, and finally, there are private companies that can offer transfer fee services for $45-$50, or one-seventh the cost, thus saving homeowners hundreds of dollars on a home sale.

These same companies also address the HOA condominium questionnaire for loan approval, reducing that cost from an average of $75 to $125 (or even more) to $25 or less.

Due to the way HOAs are managed through property management companies, homeowners have been prevented from pursuing alternative sources for transfer fee services.

The 2020 legislative session will see bills introduced on licensing property management companies and the role of the State’s HOA Office.

Through these bills and with no cost to the taxpayer, businesses, HOAs or homeowners, transfer fee services offered by private firms can be made available to homeowners.

Will 2020 be the year of the homeowner, or another year in which our legislature ignores the nearly 60% of the state’s population that lives under HOA governance?

To learn more about HOA Home Sale Transfer Fees visit the Colorado HOA Forum’s website and/or attend the upcoming free seminar in Aurora on this topic (request more information at coloradohoaforum@gmail.com).