Transfer fees are among the biggest scams in the housing business. North Carolina residents tried to get them outlawed. Colorado is trying. New Mexico is trying. Transfer fees are a ‘little’ item on your paperwork that pops up when you try to sell your home. If you live in a Homeowners Association of any kind you’re likely to learn that you have to pay the fee before you can sell to a buyer. Transfer fee. That means some property manager had to photocopy the HOA covenants, probably a hundred or so pages. But you don’t photocopy them one page at a time. No, they’re on his computer. Push one button and the printer spits them all out in a couple of minutes.
So, what do transfer fees cost? Well they can cost the buyer anywhere from 150 to 4000 bucks. For photocopies! And many a house sale has fallen through because someone in the transaction has to come up with that extra money.
Where does the money go? Simple. It’s a transfer, remember? A transfer directly into the pockets of some board officer or the property manager. That’s why HOA giants like Associa and CAI fight like the dickens when state legislators start getting wise and drafting proposals to reign these crooks in. With those two phony organizations constantly lying about how they “represent homeowners,” it’s blatantly obvious they don’t represent the interests of homeowners. No, they just represent the dollars they can sneak out of a homeowner’s pockets.
(link to Albuquerque article on transfer fees)
After Ghernter was removed from our Bent Creek HOA in Nolensville, TN during a Federal investigation, Associa took over. They sent a statement with the new “dues coupons” that it will begin assessing a transfer and settlement fee. It noted:
“Attention Residents: Upon the sale of property in your community, your management company may charge fees in exchange for services that it performs in connection with the sale: a processing fee and a post settlement fee. The processing fee reimburses your management company for information that it provides to title agents, buyers and sellers upon request prior to settlement, including the current balance of any fees and/or assessments due to the association, general fee/assessment information , information regarding utilities, and disclosure of any pending litigation involving the association. Additional information may also be provided upon request, such as the association’s governing documents, its budget and annual financial report, its insurance information, and other general information requested and the turnaround time for the order. The post-settlement fee reimburses your management company for the services that it provides after the settlement, including closing the seller’s account, updating its records to reflect new ownership, preparing and providing a welcome package for the new owner, and providing keys, passcodes, and/or other devices for access to common areas, where applicable.”
I went back and forth in emails with no reply from Associa on what exactly these fees are going to be when we sell. To date, we have no answer, even after calling an 800 number.
As a side note, the National Realtor Association is against Private Transfer Fees. Some large number of states already have laws against them.
http://www.realtor.org/sites/default/files/reports/2008/private-transfer-fees-potential-for-trouble-problems-for-future-2008-05-white-paper.pdf
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From: Barnes Sent: Monday, December 28, 2015 4:23 PM
To: Juanita Clancy
Subject: Asocia Payment for January
Associa
Ms. Clancy –
We received a coupon booklet showing we still owe for January. Our bank shows this has been paid already. Can you please confirm that the account balance is zero?
12/22/2015 Payment 1222Bent Creek HOA Associa Nolensville TN 3-N-1151222 $65.00
1. Can you please confirm that our check has been noted in our account?
2. This booklet states that Associa will charge two settlement fees in exchange for “services”. These two fees were not previously charged in relation to the sale of any home in Bent Creek.
Could you please note where in our HOA contract we agreed to these fees? Many of these documents are already online, and if not, should be posted for both the homeowners of Bent Creek to review, and for the general public to view before purchasing a home here.
Will Associa be removing those files (that were accessed for free) from the Internet and now charge for them? Must homeowners pay Associa to obtain records pertaining to their own community?
New homeowners previously paid for their own key pool key fobs, “passcode” and account setups.
3. How much are these fees for these “services”. We’d like that fee schedule sent via email. It should be posted online for all homeowners to view.
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On Dec 28, 2015, at 5:03 PM,
Juanita Clancy > wrote:
Good afternoon Ms. Barnes,
Your check has not posted to your account with us. Did you send it to our address or to Ghertner? If to Ghertner, they will provide us with ending balances in January and your payment should be reflected at that time.
Could you possible send a photo of the section in the coupon book you are referring to? I don’t know what it says and I don’t want to give you any wrong information.
Thank you,
Juanita Clancy
Director of Management Services, CMCA
Associa® Tennessee, AAMC
Associa® – Delivering unsurpassed management and lifestyle services to communities worldwide.
278 Franklin Road, Suite 140, Brentwood, TN 37027
Phone 615-775-9050
Fax 615-775-9028
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From: A ba [ Sent: Tuesday, December 29, 2015 11:41 AM
To: Juanita Clancy
Subject: Associa payment January
Ms. Clancy –
Our bank sent a check direct to the Franklin, TN address (listed under your signature below) as requested in the email by the Association and you. It has been cleared by Associa.
Are you also aware that there is a Federal Fair Housing investigation concerning a denial of an accommodation – for my family?
Attached is photo of text.
Andrea
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From: Juanita Clancy <
To: A ba <
Sent: Tuesday, December 29, 2015 12:58 PM Subject:
RE: Associa payment January
Good afternoon Ms. Barnes,
I am not aware of a fair housing issue involving your family. I’m sorry to hear about that.
Regarding the charges, a third party gathers all the required information for the sale of a home (new & resale) that title companies require. This service includes an exterior inspection of the home for sale to ensure the new owners will not receive any violation notices regarding the state of the home and/or lawn. Ghertner uses a similar service but owners may not have been aware of it. Most management companies use a third party in this manner. We choose to disclose this up front so owners aren’t surprised during the sale of their home.
If the funds for your account have been received and cashed, they will be posted to your account in January when we officially take over management of your community.
Thank you,
Juanita Clancy
Director of Management Services, CMCA
Associa® Tennessee, AAMC
Associa® – Delivering unsurpassed management and lifestyle services to communities worldwide.
278 Franklin Road, Suite 140, Brentwood, TN 37027
Phone 615-775-9050
Fax 615-775-9028
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From: Barnes [ Sent: Tuesday, December 29, 2015 3:16 PM
To: Juanita Clancy
Subject: Re: Associa payment January
Ms. Clancy – I left this out but realized you didn't answer: where in our governing documents did we authorize any 3rd party to charge homeowners "settlement fees" in relation to closing a sale? If such a fee exists, there should be language in our governing documents that provide for these fees. Specifically, what paragraph gives you authority?
How much are these fees associated with these two "settlement" fees? We are hopeful that we will move soon. We'd like a schedule of fees.
Andrea
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On Dec 29, 2015, at 4:13 PM,
Juanita Clancy <wrote:
Hi Ms. Barnes,
The management agreement states:
Information Processing: Agent shall work directly with parties associated with resale processing, and other resale related services. Agent may charge parties a fee for its work related thereto, and such fees will be the direct income of the Agent. The Association shall have no right to such fees.
This service includes an exterior inspection of the home for sale to ensure the new owners will not receive any violation notices regarding the state of the home and/or lawn.
The fees vary depending on the items requested and the time frame needed.
Thank you,
Juanita Clancy
Director of Management Services, CMCA
Associa® Tennessee, AAMC
Associa® – Delivering unsurpassed management and lifestyle services to communities worldwide.
278 Franklin Road, Suite 140, Brentwood, TN 37027
Phone 615-775-9050
Fax 615-775-9028
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From: A ba [ Sent: Tuesday, December 29, 2015 5:01 PM
To: Juanita Clancy Subject:
Re: Associa payment January
Ms. Clancy –
Assuming Associa has plenty of time to prepare these documents, and the homeowner is paid up, what would the average fees be to "settle" these two items? An estimate is fine. We assume since Associa has been in business for awhile that these fees are well known.
How long is enough time to prepare these documents? And will our governing documents now be password protected so you can charge a fee, whereas before they were available to the public?
One other question: do you personally keep these fees as a form of commission?
We'd like to know as we hope to sell.
Andrea
On Dec 29, 2015, at 5:05 PM,
Juanita Clancy wrote:
The only fees I know for sure are the transfer fees. If it’s a brand new home the fee is $150, resale is $160. If your documents are online through the association’s website, we would not password protect it as we do not have access to the site.
I do not keep the fees as a commission. Those fees are collected by Community Archives.
I hope that helps some.
Thank you,
Juanita Clancy
Director of Management Services, CMCA
Associa® Tennessee, AAMC
Associa® – Delivering unsurpassed management and lifestyle services to communities worldwide.
278 Franklin Road, Suite 140, Brentwood, TN 37027
Phone 615-775-9050
Fax 615-775-9028
***********************************************************
From: A ba [ Sent: Tuesday, December 29, 2015 10:59 PM
To: Juanita Clancy Subject:
Re: Associa payment January
Ms. Clancy –
I am still unclear why these fees can't be revealed. You mentioned one part of the fee. Associa has long been in business and no doubt has a schedule of fees listed. How do you know what to charge homeowners? Surely you don't make it up at closing? That would seem arbitrary and possibly punitive, if a homeowner doesn't meet unknown requirements. I don't buy my groceries, place them in the counter and say, "charge me whatever you want!"
Our documents are currently available, for free, to the general public online through Ghertner.com. Will Associa now password protect our documents through Associa's website and turn around and charge us so that you make copies, whereas before they were available at no cost to the homeowner?
Last, where in the homeowner's contract, the HOA contract (Declaration, Bylaws, etc.)) is there authority that notes homeowners must pay these fees at closing?
Andrea
*****************************************************************
From: Juanita Clancy
Date: December 30, 2015 at 8:08:40 AM CST
To: A ba <
Subject: RE: Associa payment January
Good morning Ms. Barnes,
Those fees are dictated by Community Archives. I don’t have a price list and the fees are based on what is requested. I can provide you with their number and hopefully they can shed some light on this for you. I don’t want to give you any wrong information. Their number is: 800-995-0682
Regarding the documents, homeowners can call anytime and request a digital copy. There is no charge for those to be emailed. If a hard copy is requested there will be a fee for the copies and postage for mailing the documents.
Your documents state the Board has the authority to hire a manager/contractor, which they did when they contracted with Associa and the charges are a part of the contract between the HOA and Associa. (Item (e) from document excerpt below)
(e) employ a manager, an independent contractor or such other employees as they deem necessary, and to prescribe their duties. (see bentcreekhoa.org and click on documents)
Respectfully,
Juanita Clancy
Director of Management Services, CMCA
Associa® Tennessee, AAMC
Associa® – Delivering unsurpassed management and lifestyle services to communities worldwide.
278 Franklin Road, Suite 140, Brentwood, TN 37027
Phone 615-775-9050
Fax 615-775-9028
Please refer to the link below for full text:
http://www.abouthoas.org/?p=2742
“There are some HOAs and management companies that will say that the Transfer Fee is allowed by the restrictive covenants. However, the management company is not a party to nor a beneficiary of the restrictive covenant and has no right to point to the restrictive covenant as the rationale for demanding that the homeowner pay a fee to the management company. Again, the fees demanded by the management companies are not “expenses” or “costs” ever incurred by the HOA. These fees do not benefit the owner’s property, nor the owner.
In some states where regulations have put limits on the transfer fees, such as Nevada, management companies are now going around these laws by renaming and creating new fees such as the “Asset Enhancement Fee” to collect their money.”
Shaking head, Andrea. Sounds a lot like the property management company I have to deal with with. I can never get a real or sensical answer—to anything. I don’t even try anymore. It seems wasting homeowners’ time is normal operating procedure. It’s not surprising, though. Everything they touch seems to come out half-baked.
The ill-equipped Board in my community has tasked the HOA attorney to craft a a special assessment and simultaneously amend our CCRs to impose a new, additional fee of 1/2 to 1% of units’ sales prices. I guess thinking past the present, doing math, planning, and communicating openly with honesty is just too hard for some. Shaking head.
Sounds like my property management company too. Residents cannot address our board directly–they must go through the property manager, meaning it is difficult if not impossible to complain about the property manager. How convenient. Whenever I email our property manager, I’m either ignored or given a rude or cryptic response. Most every communication that comes from our property manager is full of confusing typos, bad grammar, and spelling mistakes–either she doesn’t proofread or didn’t graduate high school or both. She also treats residents like she is our boss. She doesn’t seem to realize that she works for us.
Andrea, COMMUNITY ARCHIVES is owned by ASSOCIA. It’s an “affiliated business arrangement” that should be disclosed to the owners–as well as full disclosure of any and all costs. The Consumer Financial Protection Bureau (CFPB) in DC needs to be alerted to your situation. It should fall under the recently released “Know Before You Owe” program. Write them, call them. It’s definitely a consumer financial issue.
Theresa, I am reeling. 1/2 to 1% of the unit’s sales price? That is extortion. Why not charge a million dollars? There MUST be a stop to this practice. I spoke with a title agent last week who reported these runaway fees are growing at a unprecedented rate.
Great article, Ward! Provocative.
Update: the 800 “Community Archives” company routed me back to my “local” Associa. Community Archives noted that they did not have the amounts I will pay. They noted they are more or less of a processing center and that I needed to call my local branch to find that out (which I assumed anyway, as Associa has already noted that they’re in essence, going to inspect your property before allowing you to move out now). I informed Archives that my local branch had in fact directed me to call them, and this felt a bit like getting the run around. This still did not produce any numbers.
I have since emailed “local” Associa to tell them my news: you all are supposed to give me the numbers. No information has been sent to date. We hope to move soon. I’d like to know now what damage is in store for us and remedy any “outstanding” issues that we’re guessing will suddenly be noted even though they had not been noted before.
It seems apparent that you will only get this sticker shock – and obligation to rip out your fence, or restore a garden bed, whatever, at closing where you’ll feel forced to comply quickly instead of having time to contest or inexpensively address any ridiculous situations that come up last minute.
I reiterate that the National Realtor Association is lobbying against these fees or at minimum capping them.
As for Ghertner, they previously had listed the transfer fee amounts on ghertner.com (Bent Creek Cottages). Since my emails with Associa (who recently replaced Ghertner), they only have listed a “yes” now. Homeowners will no longer know what those fees are. Ghertner hid them – though I still have the screenshots before they were pulled offline. Perhaps they are updating them? More fees?