Homeowners want changes to HOA transfer fees

Posted at 6:31 PM, Mar 31, 2016

If you live in a condominium or planned community, you likely pay a monthly fee to a homeowner's association (HOA), but did you know they could charge you hundreds of dollars at closing if you sell your home? 

It's called an HOA transfer fee and some homeowners say the cost is getting out of control.

"This is just unreasonable in my opinion," said homeowner Joseph Pizzie.

Pizzie said he first noticed the fee when he went to close on his home last August.

"A charge by the HOA management company, Hammersmith, for $305," he said, showing the receipt to Denver7's Jennifer Kovaleski.

The transfer fee covers the cost of clearing a home's title for sale and is non-negotiable.

"I was taken by surprise. I didn't imagine in my wildest dreams there would be a fee for exiting a community," said Pizzie.

Here's how it works: A property management company prepares a status letter that lets the new owner know if the seller owes any fines or dues.

"I think that's outrageous for basically doing no work whatsoever," said Pizzie.

"If they don't pay -- their home sale will be stopped and they can get a lien put on the house," said Stan Hrincevich, president of the Colorado HOA Forum, an advocacy group for HOA homeowners.

Hrincevich is leading an effort to require property management companies to provide an invoice that breaks down the costs.

He has tried to get lawmakers to pass a bill for the last three years, but each year the bills have died. Hrincevich said he plans to try again next year.

"If there's nothing to hide, why won't they provide an invoice?" he asked.

Jerry Orten is with the Rocky Mountain chapter of the Community Association Institute, which represents property management companies and HOA's.

He said transfer fees represent a necessary service.

"When a home sells and is closing, various reporting needs to be done so the transfer fee is to pay for the reporting," said Orten.

When asked if there needs to be more transparency about transfer fees, Orten argues most homeowners don't know the type of fees their assocation needs to keep on going. 

"I think most homeowners are not as aware of what their association does and how it operates and what fees it needs to operate," he said.

But homeowners like Pizzie are not buying it.

"I definitely think it should change, and I think legislators should go after them," said Pizzie.

If you're charged an HOA transfer fee -- the Colorado HOA forum recommends you dispute the charge with your HOA and have your realtor ask for a detailed receipt, that way you can make sure they're only charging for costs associated with the sale of your home. 


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