The Maryland Land Title Association and the Maryland Association of Realtors strongly supports this bill which seeks to limit the fees charged to unit owners/homeowners for resale packages and statements of account.
For some time Homeowner's Associations and Condominium Associations in Maryland have been charging their seller not only for the re-sale packages, but also for the delivery of a statement of account to title agents and attorneys who are handling the settlement transaction on these units.
While most seller are aware of the fact that a resale package is to be delivered to the buyer in advance of closing they are ofen stunned by the extortionist fees that are being charged for these resale packages, most of which are delivered electronically to either the seller or to their Realtor. The fees for these resale packages are due in advance of delivery to seller and are non-refundable in the event the transacton falls apart. I have no problem with the non-refundable requirement at all, but the costs for these resale packages run anywhere from 125-500 dollars, depending on the community association and the company servicing their association.
We in the title industry have also have to pay large fees to acquire a statement of account for unit being transferred. Again, these fees are paid by the title agent, in advance of closing and are non-refundable. The statement of account is critical to our being able to transfer the unit and offer assurances that there are no past due HOA/CONDO fees due and to enable us to advise the buyer of his/her responsibilities toward monthly/annual fees upon transfer to them. In addition we have to advisethe HOA/CONDO Association that the property has been transferred and the HOA/CONDO Association then charges the buyer a fee for updating their records. While the title agent does get reimbursement on the HUD at closing for the cost of the statement of account (if the deal does not fall apart) we take issue with having to pay upwards of $150.00 to obtain informaiton that is critical to our being able to assist the HOA/CONDO with their record keeping.
The Bill seeks to limit the amount of fees that can be charged for these resale packages and statements of account; the bill reads, in part, as follows:
(c) (1) The council of unit owners, within 20 days after a written request 1 by a unit owner and receipt of a reasonable fee therefor, not to exceed the LESSER OF 2 $50 OR THE ACTUAL cost to the council of unit owners, if any, shall furnish a 3 certificate containing the information necessary to enable the unit owner to comply 4 with subsection (a) of this section. A unit owner providing a certificate under 5 subsection (a) of this section is not liable to the purchaser for any erroneous 6 information provided by the council of unit owners and included in the certificate.
As you might imagine the Community Association Institute (CAI) has taken issue with the limit on fees that these companies can collect.
When asked , during hearings, to explain their fee structure, they admitted that the fees were outrageous, but that it was an "anomoly" and not the "norm", They stated that the $50.00 fee is less than their real costs. When asked to explain they essentially described tasks that are normal for any business. Clearly the excessive fees have become a profit center for these companies that they do not want to lose.
If you are aRealtor or title agent doing business in Maryland please reach out to your representative to support this bill. Maryland is already among one of the most expensive states when it comes to closing costs.