Am I Responsible for HOA Transfer Fees If I Sell My Home?

Are there extra fees associated with selling my home in the HOA?

As you probably know, every Homeowner Association is different and each has their own governing documents detailing what fees are collected at the closing of a home sale and who is responsible for paying them.

That having been said, there are several fees that will most likely need to be paid to the association by either you or the buyer at escrow. Because so many details can vary from community to community, it is important that your HOA be completely transparent about the fees that are assessed at any time, as has been discussed in a previous blogpost.

Common Closing Fees:

Working Capital/Initial Capital Contribution/Community Enhancement Fee:

These fees are usually paid for at the time of closing by the buyer. They are fees that get deposited into the operating account of the association and can be used at the discretion of the HOA Board and the association’s rules and regulations. In those HOAs where the bylaws and other regulations do not call for a Reserve Fund Fee (see below), the Board will often use the Working Capital Fee to subsidize the Reserve Fund.

Reserve Fund Fee:

Usually paid by the buyer of the home, this fee is held in the Reserve Fund that enables the HOA to make capital improvements to the community and to complete routine maintenance as dictated by the written guidelines of the association. The Reserve Fund can also be used for necessary repairs that are not covered by the community’s insurance in the event of a natural disaster that results in damage. In most HOAs, the Board has third-party vendors identify the community assets and provide funding plans in order to provide for a safe, well-maintained, fully accoutred community.

Transfer Fee:

The Transfer Fee is most often paid by the buyer at the time of sale. In some cases, it is utilized by the association to cover the expenses of setting up the new owner as an association member. It can also be used by the Board, in accordance with the governing documents of the HOA, as a contribution to the Reserve Fund or to supplement the association’s operating budget.

Resale Disclosure Fee/Statement of Account Fee/Certificate of Assessment:

Paid by the seller in most instances, this is a fee that is paid to the HOAs managing agent. The amount of the fee is based on the contract that has been negotiated between the HOA Board and the management company. Some states also have laws that govern the amount of the fee.

It is important to remember that these are fees that are tied to the sale/purchase of the home and they are not tied to any future assessments or fees associated with the HOA nor can they be refunded if the buyer sells the home at a later date.

 Negotiation is always an option.

In the end, your HOA does not particularly care who pays which fees, so long as they get collected when escrow closes. Both buyers and sellers are free to negotiate who will pay which fees and can detail those arrangements in the purchase agreement. The fees themselves are non-negotiable, but who pays them can definitely be adapted to meet the needs of both parties.