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Attyadvisor
Attyadvisor, Attorney
Category: Real Estate Law
Satisfied Customers: 3423
Experience:  25 years of experience in general practice, real estate law and estate law.
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I am purchasing a condo in Fort Collins for my granddaughter,

Resolved Question:

I am purchasing a condo in Fort Collins for my granddaughter, her husband and my two great-grandsons to live in while my grandson-in-law attends CSU. One of the closing costs has been identified as $300 as a "transfer fee" being charged by the HOA management company. When asked what this fee covers, they said it is for preparation of documentation for the lender. When I pointed out that this is a cash deal and no lender, they said that, no, it was for the title company. When asked to identify just exactly what this documentation consisted of, they said closing documents and refused to identify them further. They said that it takes a lot of effort to prepare these documents and that the fee cannot be waived because they always charge $300 (not a very good answer). I am the treasurer of my own HOA in Evergreen and we provide, as closing documents, the most recent financials, the annual meeting minutes and several board meeting minutes. If there are any HOA dues arrears or liens on a property held by the HOA, we provide a letter identifying them (for payment at closing). I believe that the purpose of these documents is to show that the HOA is solvant. We do this for FREE because all of the documents are available on our website for homeowners to download and should not require "preparation" by any HOA if they are doing their job right. We also provide cookies for the new buyer plus a welcome letter identifying the HOA and where they can find the HOA governing documents on our website (plus a password). I feel that the associated HOA management company is stiffing people for this service (this is NOT the state defined transfer tax and this management ment company is not getting very good direction from the actual HOA). Not only am I being stiffed, they seem to get by with always doing this and there may be reason for a class action against them. Am I right to be concerned about this? Is there legal precedence to fight something like this or do we just wave our hands saying, "There appears to be nothing we can do!" and get stiffed because nobody wants to take the time to argue (which, I believe this management company depends on). Any help on this would be appreciated.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Attyadvisor replied 1 year ago.

Attorney2 :

Hello and thank you for your question. Is there in anything in Bylaws that states why this fee is charged or what it actually covers?

Customer:

I have a copy of the ByLaws from the HOA - hold a few minutes please

Customer:

No - the ByLaws were signed in the year 2000 and probably have not been reviewed by the HOA board.

Customer:

Are you familiar with Colorado Law and the standard Buy/Sell contract? In the "offer" I made it states that certain documents "will be provided by the Seller - I have agreed with the seller to pay half of her expenses - I'm looking into this for both of us. She has authorized the release of these documents and has already provided me with most of the documents

Attorney2 :


Yes I am familiar with the laws and the contract. The association cannot create costs that are not stated in the Bylaws or approved by the board and added as amendments to the bylaws. The Attorney General for Colorado is tasked with consumer protection for the state. They will take complaints and open an investigation with regard to Homeowners Associations


 



 


http://www.coloradoattorneygeneral.gov/initiatives/consumer_resource_guide/general_consumer_issues/complaints#associations


 



File a consumer complaint calling 1-800-222-4444 or sending an e-mail to stop.fraud@state.co.us.

Attorney2 :

Associations can charge for these closing packets and most of them do charge. That being said the authorization to charge must be contain in the declaration and bylaws.

Customer:

Our realtor (working for both because it was a "for sale by owner") had anticipated a possible fee of $15 to $30 by the management company.

Customer:

I believe that you have already earned your $72! Do you have any more to say on this?

Customer:

Have I worded the complaint to you well enough to use?

Attorney2 :

I don't make $72.00 on your question. The site handles the charges and we do not know how much yo pay them. That being said I understand your frustration with the association. If they have nothing to back up the charge I would file the complaint.

Attorney2 :

You worded your question perfectly.

Customer:

Thank You ... I believe that you have really helped me and, actually, my HOA. Much appreciated!!

Customer:

Are We done or do you have anything further to say?

Attorney2 :

My pleasure. Will you let me know what happens? You can return to your question at anytime to ask me any follow up questions that you may have for me.

Customer:

OK, I'll do that ... thanks!

Attorney2 :

Thank you. If you would be kind enough to rate my service I would be most appreciative.

Customer:

Will do - Excellent and I will click on that emoticon upon exit ...

Attyadvisor, Attorney
Category: Real Estate Law
Satisfied Customers: 3423
Experience: 25 years of experience in general practice, real estate law and estate law.
Attyadvisor and 7 other Real Estate Law Specialists are ready to help you
Expert:  Attyadvisor replied 1 year ago.
Thank you.
Customer: replied 1 year ago.

I have further problems with this. It it going to cost me more to ask further questions?

Expert:  Attyadvisor replied 1 year ago.
Please feel free to ask me ask me any follow up questions that you may have with regard to this matter. My understanding is that you can ask follow up questions at no additional charge.


You would need to contact customer for billing inquiries.
Customer: replied 1 year ago.

In discussing this with my realtor, he told me that all the Title company was requesting of the Mgt Company was a letter about possible dues arrears. Today, he said this:


 


"I spoke with Land Title just now for your inquiry. They had requested to receive the information from Faith Property Management by tomorrow, so they do not have anything yet.

"I called Faith again as well and did find out that the Transfer Fee is a property management fee billed to each sale transaction, regardless of which HOA the property is a part of. It is a not a fee created by or voted on by the HOA board or homeowners. By contracting with Faith, the HOAs who do so are subject to their fees."


 


Note that the HOA pays the mgt company about $400 a month for their services. Here's what I sent back to my realtor: The current homeowner is "Jan" and the mgt company is "Faith Mgt Co."


 


"I am not happy with the Faith answer. In my opinion, Faith is NOT managing Jan's property. They are responsible only for common areas in the HOA. Simply because they are under contract to the HOA does not give them the right to take money out of the closing of the private property owned by the homeowners. The request for dues information (which, as I understand it) is an HOA responsibility and, under Colorado law, any charges for that service must be in the bylaws, so I am told. I still see what Faith is doing is taking advantage of a situation which has never been questioned before. They are gouging people simply because nobody has stopped them. I'll get to the bottom of this yet! Further, Faith is being paid for their management services so why are they extracting further fees."

Expert:  Attyadvisor replied 1 year ago.
Yes, when there is a closing on a property, under an association, the association prepares a "closing" letter providing information on the account for the unit being purchased. If this is the fee to prepare the letter that is outrageous.

I will be curious to know how they will justify $400.00 for a letter.
Customer: replied 1 year ago.

Wish I knew your first name, Attorney2 just doesn't hack it! I'm goung to call you Butch. Butch, the fee is $300 and still outrageous. I realize that it is the HOA's responsibility but the HOA is not charging that fee, the mgt company is and separate from their HOA duties as I understand them. Are they or are they not acting on behalf of the HOA by providing a "dues" letter, not acting independently? That's the legal question. What gives them the right to create charges at the closing? Their statement, "the Transfer Fee is a property management fee billed to each sale transaction, regardless of which HOA the property is a part of." What gives them the right to charge a fee independently of the HOA? Am I correct in saying that the mgt company is only responsible for "common" property" management? They are not managing the personal homeowner owned condo properties, are they?


 


Butch, you have stated before that you would like me to keep you informed about what happens and again, above, that you will be curious to know how they justify their charges. Do I give you that information by coming back online through these question/answer chats?

Expert:  Attyadvisor replied 1 year ago.
What would be the female equivalent of butch?

What do the bylaws state with regard to the fees that a management company can charge?

You can come back to this question with additional questions or information at anytime.
Customer: replied 1 year ago.

Please excuse the delay. I have been reading through a) the ByLaws, b) the Rules and Regs and c) the covenants (61 pages) also referred to as the Declaration(s). None of these documents have been amended or modified in any way since the year 2000.


 


"What would be the female equivalent of butch?" ... you really do not want to know! (joke Joke

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) ... but I will be polite and call you Suzy-Q ...


 


Suzy-Q, There is no place in the documents mentioned above where a any fee (board or management company generated) is identified for the process of providing a "closing" or "dues" letter. Fees are mentioned in in the covenants stating that the HOA can charge a fee for, 1) homeowner use of Common Elements, 2) late assessment (dues) payments and 3) "... a reasonable charge for the preparation and recordation of supplements or amendments to the covenants." Also in the covenants is a section which provides the board the right to contract for property management. I do not know what the actual contract says with respect to the management company. Finally, the standard Colorado Contract to Buy and Sell Real Estate (Residential) has a section identifying "Association" fees to be paid at closing but there is nothing saying that the association management company can charge independent fees. It mentions Status Letter and Record Change Feesand even Private Trans Fees but they are all called Association Fees. This association does not appear to be aware of how to operate and appears to be "managed" by the property management company. When I mentioned this fee to the president of the association, he emailed the property manager and cc:'d me saying to the property manager, "Jim Bernier (cc'd on this email) is asking about the $300 transfer fee imposed by the HOA. I have never been involved in this process as the previous account manager always handled this. Can you explain what this is for?" ... I'd say that this association and board is a bit lax in management.


 


I believe that nothing I have done so far will keep the management company from making the $300 charge at closing. I'm going to write a letter of protest to be delivered at the closing for the record and possibly have the seller, Jan, also sign it. Can you think of any specific wording I should use? I will also be taking your advice about addressing this to the Attorney General/consumer protection people.


 


Thanks, Suzy-Q ... be well. I will look for a further reply from you in the morning, no need to work on it any more tonight. I will be signing off after sending this. - JEB

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