HOA Transfer/Reserve Fees???? $2000+???? (Mesa, Gilbert: short sale, foreclosures, HOA fees)

[ajf7279]

I don't understand how these HOA's are getting away with this. We were looking to purchase a short sale in Montelena in Queen Creek. Our offer was accepted but we pulled out when we found out that there was a $2500 HOA transfer fee to be paid! For what?!?!? They said it was to help make up for all of the foreclosures and such but we thought that almost 3 years in dues was a little much to buy the house.

So we decided to go new build and liked the new Fulton Homes at Victoria Estates the best. Guess what.. (And I would be willing to bet that no one who has bought there knows this because it was pulling teeth to get the info..) We went in there to write a check and start building but there is a $2000 HOA transfer fee! (And that's in addition to a $400 "transfer fee" to be paid to the property management company! On a brand new community that has no need to make up for foreclosures! How is this okay? So if I want to sell my house, I have to either pony up 2K of my profit or ask the buyers to do it and likely kill the sale? In that case, it's almost 2 years of HOA dues. WTF?!?! They said that it was to "keep the monthly dues down" but there is a single park in this community and that's it and the monthly fees are $119 (I believe...I may be wrong there.)

So I figure this is a Queen Creek thing. I called over to Fulton's Geneva Estates in Gilbert....They have it too! How are people putting up with this?

When did it become okay for an HOA to siphon off so much of your home sale? I would bet that most people in these communities have no idea they are signing up for this. I am seriously pissed and trying to find a community without this crap.

Am I crazy??? Does this go on everywhere? We last bought in 2007 and we have never encountered anything like this. In fact, the AZ legislature just passed a bill prohibiting "transfer fees" over $400 so I guess now they are renaming them "Reserve Fees".

-Amanda

[Captain Bill]

HOA transfer and disclosure fees are limited to $400 after Jan 1, 2012. The disclosure and transfer fee go to the management company; not the HOA.

However, if the HOA has in in their CC&R's then they can charge more. I would challenge the HOA management company to produce the covenant in the CC&R's that allow $2,500 fee to be assessed to a buyer.

[sh9730]

Our HOA approved this at the last meeting - although since our development is only 50% complete, the landowner is still in essence the entire HOA (until 75% buildout). Ours however is only 500.00 extra on top of the normal fee.

Im hoping this is a temporary situation. The IDEA is that since all of the "common areas" are already done, and we dont have enough monthly paying homeowners to cover all those costs, this will help to mitigate some of those costs until buildout. In real terms though it is the landowner/developer who is covering the majority of these costs now, and they dont like it...so this is a way to help them.

Its just a cost potential homebuyers should ask about until this mess is completely behind us so they can include it in their decision on how much to offer on a home.

As an existing homeowner I understand the need, as the developer is likely to only do as little as possible to keep the property in usable condition. We already have no winter grass planted etc..
But I can also understand how this may actually continue to contribute to decline in actual home "values" since these additional transfer fees can be as much as 1% or more of a home purchase..which isnt nothing!

[matyoka]

I had a smooth transition to our Mesa home in October. HOA transfer fee paid by the seller, nothing extra for us... I hope you work your issues out and purchase your new home.

[Zippyman]

It definitely pays to have an astute agent write your offer - If I remember correctly there's a "box" on the standard armls contract for "transfer fees" - just darken the one that says "paid by seller" and the short-sale lender is on the hook.

I agree, the fees are insane, and renaming them doesn't make them fair or legal, for that matter. Clearly the legislature's intent was to limit "gotcha's" like these fees that appear shortly before closing.

[DellNec]

Which proves the point that HOA's are completely out of control here in Arizona. They are charging these insane fees in order to feed the machine they created. $2,500 is beyond ludicrous.

[ajf7279]

Here's the kicker for me, though.... While, in the case of the above poster, the transfer fees may have been paid by the seller in that case, I assume a point will come where you will be the seller and not super happy to have to take 2k out of your already picked over profit to pay the HOA. Or have to wait for a buyer to come along who is so dying to buy your home that another $2000 cash is a non-issue.

That's my problem. Apparently, just for us to buy the house, only $600-ish goes to the HOA upon our close. $400 "transfer fee" and "$200-ish" to Reserve. The problem arises when I decide to sell someday and am forced to, after paying my HOA fees all those months, contribute a mandatory $2000 upon the sale of the home. So I either have to pay it out of my (hopefully) profits, or ask the buyers to pay it which, since they have to bring it in cash, could scare people away. I think it's crap that anyone, let alone an HOA, should get a bite out of my property....and get to take that same bite everytime a homeowner decides to sell.

We talked and will not be buying in one of these communities. We think it oversteps the bounds of the purpose of an HOA and is a needless and overreaching component to the CC&Rs. We also want to make sure that other homeowners are aware that this is happening so, unless they want to be surprised and have to pay up when the time comes, perhaps they can vote to change it in their own communities.

Obviously I was fired up in my first post so I apologize for sounding so spastic but in an age where everyone is upset about the perception of their liberties being infringed upon, I would say this is a HUGE infringment on the right of someone to do what they please with their own property. The HOA doesn't own my house and isn't owed anything when I sell. They need to stick to what they were designed to do, which is keep the neighborhood tidy and well-preserved...not to become a giant, money-hungry, legislating leech.

Thanks for the replies. They are much appreciated and I will definitely keep checking back for continuing replies...All additional input would be great.

[sh9730]

Again, my BELIEF is (although you didnt say in your initial post) is that this situation mainly arises in unfinished developments where the HOA - IS in fact the developer. I havent heard of too any communities that have an actual homeowner HOA board that are implementing this fee.

As I said in my post above....its a tough call because in incomplete developments, there are costs that are just not being covered by the small amount of dues paying homeowners. But, also as I said, I completely understand your frustration as a buyer.

I guess I just have to say its a tough choice as to whether my HOA dues increase, or this type of fee is implemented.....

[Zippyman]

That's actually a bit of a false choice in the situation you've outlined, though.
If the builder is controlling the hoa, as is normal until all properties have sold- this fee is simply a way of masking the true price of a property.

Which is exactly why the legislature made it illegal.

I'd expect these fees to end up in court, eventually, but that doesn't help the op now.

Originally Posted by sh9730

Again, my BELIEF is (although you didnt say in your initial post) is that this situation mainly arises in unfinished developments where the HOA - IS in fact the developer. I havent heard of too any communities that have an actual homeowner HOA board that are implementing this fee.

As I said in my post above....its a tough call because in incomplete developments, there are costs that are just not being covered by the small amount of dues paying homeowners. But, also as I said, I completely understand your frustration as a buyer.

I guess I just have to say its a tough choice as to whether my HOA dues increase, or this type of fee is implemented.....

[sh9730]

Zippy -

Yep - agree this likely will be challenged...at a minimum it should be fully disclosed at as an expense, just like approximate property taxes etc.