HOA Provisions Still Safe in Transfer Fee Bill
After giving stakeholders time to work through proposed amendments to Senate Bill 11-234 (“SB 234”), late last week the Senate Committee on Local Government (“Committee”) referred an amended version of the transfer fee bill to the full Senate for consideration. While SB 234 has not yet been placed on the Senate Calendar to be considered on second reading, we expect the Senate will take up the bill very soon. (For the bill to be sent to the House for consideration, the Senate must pass the bill on second and third readings.)
From the HOA perspective, the good news is the provisions we really care about have remained unchanged in SB 234. In fact, the HOA-specific provisions were not the subject of controversy during the Committee hearing. The following provisions remain excluded from the definition of “Transfer Fee Covenant” in the bill and are permitted to be charged:
● “. . . a one-time fee paid to a . . . management company for an association of unit owners . . . for services rendered in connection with the conveyance for which the fee is earned . . .” In other words, management companies are permitted to charge a fee related to work performed by the management company in relation to the conveyance of a unit.
● “Any provision in a recorded document, regardless of whether the document is recorded before, on or after July 1, 2011, requiring payment of a fee, charge, assessment, fine, or other amount only to the extent payable to or collected by an association of unit owners, homeowners, property owners, condominium owners, or similar mandatory membership organization, including a cooperative, mobile home, time share unit, or common interest community association.” Simply put, community associations may charge a transfer fee as long as it is included in a document that is recorded.
We will continue to provide you with important updates on SB 234 as it proceeds through the legislative process. Also, for more information on the transfer fee bill - check out our April 7th blog posting.