HOA Transfer Fees/Disclosure fees- a small rant!

These Fees from HOAs are completely out of line, and charge money for absolutely no reason. Its 100% pure profit lining the pockets of HOA owners who, well...probably dont even keep up the common areas very good.

The fee that realy gets me is the disclosure fee...its completely insane. Title does all the work, how can they charge a fee for working with title, when they already charge a transfer fee?

We can thank our incompetent government for doing nothing about this open in your face FRAUD.

Fraud includes charging someone for something of value while giving them nothing of value in return.

Couldn't agree with you more. I just googled to find this post after looking around for what exactly "HOA Disclosure" entails.

To be more accurate though, please make sure to specify that it is the management company that makes all the profits, not the actual HOA. Since the HOA board bases it's choice of management company on how much it charges per month, the management company jacks up all the fees that aren't paid by the actual community.

My community is in the process of shopping around a management company and I'm surprised at how prominantly featured all the low fees that are charged to the community are and how hidden the ones that go to home buyers/sellers.

I can't believe how rediculous some of the fees are. $150 dollars transfer fee? That's so they can replace the name of the old home owner with the new home owner on their spreadsheet.

$300 disclosure fee? To print a form that is already filled out and add in the outstanding dues the seller has? Just makes me angry.

It's turning to be as much of a ripoff as title insurance itself (separate tangent).

Allow me to comment from an HOA's perspective.  We are a small Assoc., and do not use a property manager. 

In every sale transaction, as President of the Assoc., I have to deal with questions from dozens and dozens of agents; some of them professional, some of them not.  I have to supply docs that number well over 300 pages.  I have to either have those docs commercially reproduced or use my own paper and ink to print them.  Copying, assembling the docs takes at least 3 to 4 hours of my time, plus my time, gas and postage to mail or deliver them.  And, frankly, just like any R.E. agent, my time has value.  Why do R.E. agents always think that only THEIR time has any value?  By law, I am not allowed to be compensated in any manner, only reimbursed for expenses.  I am serving as a volunteer and do this work out of a sense of duty to my HOA and because I feel that I am good at it.  Once a property goes into contract, I then have to respond to both Title and Escrow officers and sometimes attorneys, home inspectors (where's the water heater?  How old is the roof?) and City officials.  I also have to fill out HOA lender disclosures and sometimes FHA forms.  I have to fill out, disclose and provide insurance disclosures and answer new-buyer questions from insurance agents.  I get approached and called during Open Houses to answer questions that the listing agent either doesn't know the answer to (or, in the case of some agents, has been too lazy to ask).  Very often, I also have to directly respond to prospective buyers (who either don't have the time, or are too lazy to read the disclosure docs and call the HOA officer instead of asking their buyer's agent for help).  You can just about double all that amount of work if the transaction is a short-sale or foreclosure.  I do all this with a helpful, friendly attitude and fast turn-around despite the abuse that some agents feel it is their right to dispense.

And, frankly, all that service is provided by our HOA for a transer fee of $150.00; a fee that goes to my HOA and not to me personally.  R.E. agents are famous for believing that "time is money."  For the amount of time, effort, and grief that an HOA officer has to put in for each and every transaction.....add it up, before you start beating us up, and then try and tell me that a transfer fee is unreasonable.  Thank you.

John,

I was about to write a long post about how this isn't about the HOA, but about the HOA management companies, but after reading the original blog post I can see why it is misunderstood. The rant is really directed not at the communities, but their management companies.

The HOA community doesn't make any of the money when it comes to transfers of ownership (at least in my case). Fees for Disclosure/Transfer/Lender Questionnaire all go directly into the pocket of the management company, not the HOA. For example, I paid $325 for disclosure, $150 for transfer, $125 for lender questionnaire. That's $575 dollars that my community will never see a dime of.  This is of course on top of monthly management fee.

Also, it doesn't take them 3-4 hours to produce this paperwork. It takes them maybe 20 minutes (less if they are more automated). There is a huge different between doing it as a volunteer for your community and a management company who does these day in, day out, for many communities. They have all the paperwork necessary at their fingertips, software that automatically fills it out that's connected to their accounting program, websites that agents have to order these items through, and hourly employees that take phone calls for any questions.

In the end, their cost, in terms of time/money, is significantly less than it would be for you. Furthermore, they charge more than you do, and they keep the money for themselves instead of passing it down to the HOA.

The worst property management company in AZ is Snow Property Services.  It is like a curse because half of my friends live in communities he manages.  He is literally a slum lord when it comes to maintaining the communities.  He hires the lowest bidder and it shows.  Dead grass, trees that fall over and take 2 months to clean up, graffiti that sits on the walls for 2-3 months, etc.  All he does is send threatening violation letters and letters to collect fees and fines.  If you are going to buy a home ask if the HOA uses Snow Property Services.  If they do then RUN the other way and don't look back.

I know I'm late to the game here but I just found out that the HOA for the house I'm trying to purchase is demanding a $2500 HOA Transfer Fee PLUS a $425 Disclosure Fee to the Management Company.  I literally cannot believe the abuse of power here.  This is on a $260K house on an 8000sq ft lot.  Montelena HOA in Queen Creek.  My realtor and lender are both stunned.  I am fighting this.  It's immoral and unethical...not to mention likely illegal since it in no way can be considered "reasonable."