HOAleader.com - Tip of the Week - October 29, 2010
Published: Tue, 10/26/10
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Threats to HOA Transfer Fees: What You Must Know
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This week's tip is a heads up that if you rely on transfer fees
to boost your homeowners association budget, you may have to
rethink that practice.
Private transfer fees, which have many other names, are fees
included in governing documents that require that a developer or
an association receive a payment each time a unit or lot is
transferred to a new owner.
"Right now, there are a lot of developers who, because there's
such a strain on development, have imposed transfer fees so that
every time the property transfers hands, it sends money back to
the developer," explains Donna DiMaggio Berger, managing partner
at Katzman Garfinkel Rosenbaum in Ft. Lauderdale, Fla., who
advises associations.
Some associations have imposed such fees, too, though their use
is more common in some states than others. There's nothing that
prohibits associations from imposing such fees in Massachusetts,
but Robert Galvin, a partner at Davis, Malm & D'Agostine PC in
Boston who specializes in representing condos and co-ops, has
never seen condos or HOAs impose them. Transfer fees are also
permissible but rare in California, says James R. McCormick, Jr.,
a partner at Peters & Freedman LLP in Encinitas, Calif., who
represents associations.
However, they're prevalent in Virginia. "Here in Virginia, just
about every association we work with has some form of transfer
fee written into its declaration," says Elizabeth White, a
shareholder and head of the community associations practice at
the law firm of LeClairRyan in Williamsburg, Va.
The problem with the fees is that often they're buried deep in
documents that buyers seldom read, and they can make
homeownership more expensive. As a result, 17 states have banned
or restricted transfer fees, according to The New York Times. "In
Florida, we've banned them," says Berger. "Our statute
specifically prohibits it. Other states haven't banned it, which
is why the FHFA has proposed banning it."
Berger is referring to the Federal Housing Finance Agency, the
regulator and conservator of Fannie Mae and Freddie Mac and the
regulator of the 12 Federal Home Loan banks. It's now taking
comments on a proposed rule that would ban such fees on mortgages
guaranteed Fannie Mae, Freddie Mac, and Federal Home Loan banks.
To find out how FHFA's change would affect your current and
future use of transfer fees, see our new article,
http://www.hoaleader.com/members/497.cfm.
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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HOA Transfer Fees: Changes May be in Store for Unit and Lot
Transfer Fees
Keep your eyes open if your homeowner association gets a fee each
time a unit or lot changes hands--or you're thinking of
implementing such a fee. They're under attack, and it may not be
wise to rely on them as a revenue-generating tool for much longer.
Click here to read full article:
< http://www.hoaleader.com/members/497.cfm >
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HOA Insurance Increases Getting You Down? 2 Tips To Help Cut
Costs
In this week's tip, we aim to put a smile on your face by giving
you two ways to fight back against insurance rate increases:
Click here to read full article:
< http://www.hoaleader.com/public/496.cfm >
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HOA Insurance: 5 Tips for Saving Money on Insurance for Your
Condo of Homeowners Association
Are the insurance costs of your condo or homeowners association
going up and up? Here, we provide five tips for keeping insurance
costs down, including raising your deductible and reducing your
policy limits, and explain the benefits and risks of each.
Click here to read full article:
< http://www.hoaleader.com/members/495.cfm >
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If Pot's Legal in Your State, Can Your Homeowners Association
Regulate It?
Fourteen states and the District of Columbia permit the use of
medical marijuana. So far, association attorneys haven't seen pot
use become a heated issue at the associations they manage--but
they anticipate that it will.
Click here to read full article:
< http://www.hoaleader.com/public/494.cfm >
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Medical Marijuana and HOAs: Get In Front of Medical Marijuana Use
in Your Homeowners Association
Fourteen states and the District of Columbia permit the use of
medical marijuana. If you're in a state that permits medical
marijuana use, what if you receive a complaint about marijuana
use in your association? Can you require the owner to provide
evidence of a prescription? Can you demand the use stop?
Click here to read full article:
< http://www.hoaleader.com/members/493.cfm >
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