HOA Transfer Fees: Definitions, Costs & More

By Home Bay

Posted on May 13th, 2016

If you live in an area with a homeowner’s association, you may notice an HOA transfer fee listed in the closing cost ledger. This post will explain what an HOA transfer fee is, what it covers, who pays for it and how to learn more about transfer fees in your community.


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What is an HOA Transfer Fee For?

This fee covers costs of printing HOA documents for the new homeowner, changing names in community databases and other administrative and billing costs. It also may cover the cost of creating new security cards for common areas or changing security codes.

What to Expect

HOA transfer fees vary based on the homeowner’s association involved, but they range from $100 to $1,000. The fee varies based on what services the seller and buyer are being provided by the HOA. They can also be affected by state laws or local regulations.

California, in particular, only allows HOAs to charge transfer fees that are directly tied to the cost of services rendered. Specifically, the state only allows HOAs to charge for costs related to procuring, preparing, copying and delivering documents.

Who Pays the Fees

In many states, including California and Colorado, HOA transfer fees are added to the seller’s final closing costs. However, in other cases, the buyer pays these fees. In either case, it is important to assess transfer fees before you sell your property so that you can anticipate how they are going to affect the final sale and your budget.

Investigating Fees in Your Community

In some cases, your HOA is required by law to disclose the fees to you before the sale. In particular, in California,HOAs are required to provide certain disclosures to people who want to buy properties in their communities and by law, these associations must provide you with an estimate of your transfer fees within 10 days after you request the disclosure documents. To avoid surprise fees, contact the president of your HOA to learn about the fees charged by your association.

Understanding HOA Disclosures

As explained, HOA fees typically cover administrative and material costs related to saying goodbye to one member of the HOA and welcoming in a new member. However, HOA transfer fees can also be used to cover the cost of a range of disclosures. These disclosures may include the governing documents of the HOA, a statement explaining the HOA financials and any special age or occupancy restrictions. They may also include minutes from recent HOA meetings and rules about renting out properties in the community.

In some cases, disclosure documents include information related to the seller’s relationship with the HOA, such as outstanding violations, assessments and unpaid fees or fines. Before selling your home, find out which disclosures the HOA is required to give your seller and make sure everything is in order. You don’t want disclosures to create a poor impression of you or your property.

Don’t let HOA transfer fees surprise you or your buyer. Do your homework before you put your home on the market so you know what to expect.

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Posted in Costs