What are HOA fees? | What are HOA transfer fees? | HOA transfer fee costs | Who pays? | FAQs
If you’re selling a house or condo with a homeowners association (HOA), you’ll likely have to pay an HOA transfer fee. This one-time administrative charge, typically $100 to $400, covers the cost of transferring ownership documents from the seller to the buyer and may include additional expenses such as issuing new security cards or rekeying locks.
Unlike regular HOA dues, paid monthly or annually, the transfer fee is only paid at the time of sale. HOA transfer fees also vary widely as they’re set by the governing HOA and aren’t regulated in many states. This lack of regulation can sometimes lead to significantly high fees depending on the HOA’s policies.
What is an HOA fee?
HOA fees are dues paid to an HOA – a private entity that manages and maintains a residential community. These fees fund common services such as landscaping, facility upkeep, and sometimes utilities, contributing to the overall maintenance of the neighborhood or building.
HOAs also set rules about what you can (and can’t) do with your property. This may include restrictions on property appearance, from the height of the lawn to the color of exterior paint.
One of the main benefits is that no house can become garish overnight or display possibly controversial items (like political signs or flags). Breaking the rules can result in a fine — and unpaid fines or dues can result in a lien against the property, potentially complicating future sales.
What Is an HOA transfer fee?
An HOA transfer fee, also called an HOA certification fee, covers the administrative costs of transitioning HOA documentation from one homeowner to the next. For example, this fee covers the costs of compiling important documents such as community rules, financial statements, and property disclosures and transferring them to the new owner.
The fee also includes property inspections for any rule violations and updates to security measures like creating new security cards or changing locks to ensure the new homeowner’s safety and compliance within the community.
How much do HOA transfer fees cost?
HOA transfer fees typically cost $100–$400. However, costs and regulations often vary by state.
Some states cap the amount an HOA can charge for these fees. For example, Texas caps these fees, known there as HOA resale certificates, at $375. In contrast, California requires that these fees be “reasonable,” though it doesn’t specify what constitutes reasonable.
However, in California, HOAs can only charge costs related to procuring, preparing, copying, and delivering documents. California HOAs also must provide a transfer fee estimate within 10 days after the buyer requests disclosure documents.
In Utah, HOAs with less than 500 housing units are allowed to charge a reinvestment fee of up to 0.5% of the sales price, which is usually paid by the buyer.
Other states may have additional regulations for HOA transfer fees. A good agent can tell you what kind of HOA transfer fee you can expect when buying or selling a home.
Who pays HOA transfer fees?
The seller usually pays for HOA transfer fees. However, that’s not a guarantee. A seller could negotiate with the buyer to pay for them, or a buyer could offer to cover the costs to sweeten their deal.
HOA transfer fees are usually due at closing. But if the HOA transfer fee doesn’t show up as a line item on the closing document, these fees could be due after closing — if that’s the case, the buyer is on the hook to pay for it.
Buyer tip: Learn the cost of HOA fees before making an offer
HOA fees are worth it for planned community homeowners who want a semblance of uniformity in their neighborhood. For homeowners of condos, HOA fees are necessary because they cover maintenance costs.
HOA fees can range from $100 to more than $1,000 per month, varying by neighborhood, building, or subdivision. Generally, the more expensive the area, the higher the HOA fees will be.
HOA fees typically cover:
| 🕵 Neighborhood signage |
| 🏡 Ground maintenance of certain areas (between property lines, grass near the entrance) |
| 👫 Sidewalk upkeep |
| 🏈 Shared recreational area upkeep (like swimming pools, clubhouses and playgrounds) |
| 🚛 Common utilities like garbage disposal |
| 🔒 Security (like gate guards and cameras) |
| 🏦 Shared space maintenance (like elevators and lobbies for condos) |
| 🔧 Shared structures upkeep (like roofs for condos and townhomes) |
Some HOAs are voluntary, while others are mandatory. HOA fees are due directly to the HOA itself and are not included in your monthly mortgage payment.
Some buyers like HOAs because they help make the neighborhood look good. Other buyers may not like the extra rules and costs that HOAs add to homeownership.
If you’re selling a home in an HOA community, you’ll want to highlight the positive aspects of your HOA that increase property value to justify the dues and inform the buyer of any HOA transfer fees due at closing.
FAQ
What is an HOA transfer fee?
An HOA transfer fee is what an HOA charges to transfer all HOA-related documents over to the new owner. The HOA transfer fee can also include extra duties, like issuing security passes. Learn more about HOA transfer fees.
What is an HOA fee?
HOA fees dues issued by an HOA can cost anywhere from $100 to over $1,000 per month. Those dues cover things like lawn maintenance, security and the upkeep of shared areas. Learn more what HOA fees cover.
Who pays HOA fees?
The property owner pays for HOA fees up until the home is sold. HOA transfer fees are usually paid for by the seller, although that’s negotiable. Learn more about who pays HOA transfer fees.