HOA Transfer Fees

Homeowner advocates take aim at HOA boards, management companies

By John Mossman
The Denver Postdenverpost.com Posted: 02/24/2013

Jim Phillips was prepared for many of the costs associated with selling his Aurora home in July.

What he was not expecting was a $500 “transfer fee” for HOA documents required to complete the sale of the property in the Tallyn’s Reach development.

Phillips reluctantly signed the closing documents, then disputed the charge from his HOA’s property management company. After failing to reach a resolution, he took his case to small-claims court in Arapahoe County, where he recovered much of the cost.

Though Phillips says his case proves that the little guy can prevail, homeowners advocates say his victory is rare and are pursuing legislation they say will increase oversight of HOAs and better protect homeowners.

House Bill 1134 would expand the authority and responsibilities of the Colorado HOA Information Office and Resource Center.  The office, created in 2010, has been primarily responsible for recording and reporting on complaints of HOA homeowners, registering HOAs and providing advice to homeowners.  In response to what advocates claim is a high number of complaints and weak enforcement of current HOA laws, the bill would expand the office’s reporting and educational duties, and allow the office to become more involved in the dispute resolution process and monitoring of irregularities.

The Community Associations Institute, which represents HOAs and property management companies, opposes the bill as it was originally written on the grounds it is not necessary and would be too costly.  However a homeowner advocate counters that 600 formal complaints were filed with the largely unknown HOA Office in its first year of operation alone, and that any fee increase would be “no more than $1 per homeowner per year.”  That group also is supporting two pending bills: to license and regulate property management companies, and to reform HOA foreclosure laws so a home can’t be foreclosed on unless the debt reaches a certain threshold.

“I could never get the property management company to break down the costs,” Phillips said. “Then it got referred to a law firm, which didn’t explain the costs either. I also argued that you’re already paying a monthly fee for management. So when you sell your home, why are you paying an outside fee?”  In small-claims court, he asked for $400 back. On Feb. 14, a judge awarded him $300.  “It pays to fight back,” Phillips said. “I feel vindicated.”