Because Home Owners Associations have in the past been caught by dues deficiencies due to vacancies and foreclosures. They have been forced into attempting to recover fees and adjusting fees upwards to make up for it. As usual abuse occurs so it is then time for legislation to institute new rules and laws. These changes are the result of the most recent version.
1. HOAs can only charge up to $400 for preparation of documents for resale (CC&Rs, By Laws, etc.).
2. If the HOA is currently charging less than $400, they can only raise the fee up to 20% per year to reach $400.
3. The $400 preparation fee does not include any transfer fee, community enhancement fee or other fees charged by an HOA for resale.
4. The $400 fee can only be collected at the close of escrow, and not before (HOAs can no longer hold the documents hostage and require up-front payment).
5. If no close of escrow occurs, the HOA can’t collect their fee. If a transaction cancels, they can’t charge another fee on the next transaction.
The rumor mill believes that #5 may be challenged by some HOA lawyers. At least one HOA law firm in particular feels that an HOA can charge the seller (at COE) for as many times they prepared the documents for different buyers even if those buyers cancelled.….Time will tell
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