Who pays owner association “transfer fees?”
QUESTION: I’m representing a buyer who is closing on a property that has an owner’s association. I am trying to figure out who is responsible for the payment of a “transfer fee” that’s being charged by the association’s management company. I’ve reviewed the Offer to Purchase and Contract (form 2-T) and I don’t see any reference to transfer fees on the Contract anymore. Who is supposed to pay it, my buyer or the seller?
ANSWER: In answering the question, it is important to understand the way in which Form 2-T assigns responsibility for the payment of the various fees imposed by owner associations and their management companies when a property regulated by the association is bought and sold. According to Form 2-T, the buyer is responsible for the fees that are listed in paragraph 9(b) and the seller is responsible for payment of the fees listed in paragraph 9(a). Assuming that what is meant by the term “transfer fee” is a fee for updating the association’s records to reflect the transfer of the property from the seller to the buyer, the fee is the seller’s responsibility since, according to paragraph 9(a), the seller is responsible for payment of “any fees charged for transferring or updating ownership records of the association.” In addition, the seller is responsible under paragraph 9(a)(iv) for payment of “any fees other than those fees specifically required to be paid by Buyer under paragraph 9(b) below.” Since there is nothing under paragraph 9(b) that would make the buyer responsible for the payment of a “transfer fee,” it would, in our view, be payable in any event by the seller under the “catch-all” provision in paragraph 9(a)(iv).
By the way, the term “transfer fee” was taken out of Form 2-T many years ago now. This was done primarily to avoid potential confusion with the term “transfer fee” as defined in a North Carolina statute that was enacted in 2010 to prohibit the practice of including in an association’s governing documents fees that are payable in perpetuity to the association’s developer on all transfers of property in the development.
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FAQs
Assuming that what is meant by the term “transfer fee” is a fee for updating the association's records to reflect the transfer of the property from the seller to the buyer, the fee is the seller's responsibility since, according to paragraph 9(a), the seller is responsible for payment of “any fees charged for ...
Who should pay the transfer fee? ›
While it's standard for sellers to cover the cost of transfer fees, as with most closing costs, this can depend on the nature and structure of the deal. (In certain special circ*mstances, such as a short sale, it's also possible for the bank to cover the cost of the fee.)
What happens if you don't pay HOA fees in NC? ›
In North Carolina, Homeowners' Associations (“HOAs”) can foreclose on properties in their communities to obtain unpaid assessments, dues, fines, and fees. Foreclosure may seem like a drastic step to obtain debts ranging between $200-$500.
Who pays for the HOA transfer fee in Texas? ›
Who pays HOA fees? The property owner pays for HOA fees up until the home is sold. HOA transfer fees are usually paid for by the seller, although that's negotiable.
Who pays property transfer tax in NC? ›
The tax is paid by the seller, although some or all of the tax could be passed on to the buyer, depending on economic conditions (question 4 below discusses this issue). County commissioners determine how the proceeds of the tax are used.
When a realty transfer fee is involved who of the following is responsible for the payment? ›
Understanding Realty Transfer Fees
Upon the transfer of the deed to the buyers the seller pays the RTF, which is based on their property's sales price.
How can I avoid transfer fees? ›
Check if your bank or provider offers fee discounts
Some US banks and transfer providers do offer fee discounts — or could even waive wire fees entirely — for some customers. Ask your bank if there's an option to cut your costs, or have a look at your specific account terms and conditions to understand your options.
Who gets the money from a transfer fee? ›
A negotiated transfer fee is agreed financial compensation paid from an interested club to the club that possesses the player's exclusive contracted playing rights.
How much is a typical transfer fee? ›
Wire transfer fees generally range from $0 to about $50. The median wire transfer fee for the institutions we surveyed is $15 for incoming domestic wire transfers, $25 for outgoing domestic wire transfers, $15 for incoming international wire transfers and $45 for outgoing international wire transfers.
What is the disadvantages of HOA fees? ›
There are many benefits to HOAs, but those advantages come at a price. A home in an HOA community is subject to HOA dues and regulations. These can significantly increase the long-term cost of homeownership and restrict your ability to make independent decisions about how to decorate or maintain your home.
If you fail to pay your HOA or COA assessments in North Carolina, the association can get a lien on your property and might foreclose on your home.
How do I get rid of an HOA in NC? ›
Dissolving HOAs
A majority of the organization's members must agree to the termination of the HOA in order for it to happen. If accepted, the terminating members will need to sign the agreement, pay any outstanding obligations, and sell the HOA assets.
Are transfer fees paid by buyer or seller? ›
In many places, the seller is the one obligated to pay the transfer taxes. But again, the rules vary. “In some states, like Pennsylvania, this expense is typically split between the buyer and seller,” Popowitz says.
Can you lose your house for not paying HOA fees in Texas? ›
Can an HOA force a foreclosure in Texas? Yes. If you fail to pay your HOA or COA dues, the association can usually get a lien on your home and might foreclose.
Are HOA transfer fees legal in South Carolina? ›
In some areas of SC, public transfer fees are legally grandfathered. Currently, the SC legislature has made public transfer fees illegal unless grandfathered. Private transfer fees are often referral to by a variety of names such as owners association fees and other names.
Who oversees HOAs in North Carolina? ›
Subdivisions with homeowners' associations established after Jan. 1, 1999, are governed by the North Carolina Planned Community Act found in Chapter 47F of the North Carolina General Statutes. However, no state or federal agency oversees homeowners' associations.
Do HOAs pay taxes in NC? ›
North Carolina HOA Filing Options
It also subjects all HOA's income to taxation; any funds set aside or in excess of expenditure will be taxed. HOAs can also elect to use the second option, to be taxed under section 528 of the IRC, and to file Form 1120 – H instead of Form 1120.
Can an HOA charge a transfer fee in Florida? ›
With respect to transfer fees for condominium associations, Florida law provides that transfer fees may not exceed $100.00 per applicant. Unlike condominium associations, there is no statutory limitation on transfer fees charged by a homeowner's association.
Who typically pays HOA transfer fees in Arizona? ›
Closing cost fees are negotiable between a Buyer and a Seller including HOA transfer fees. Many times the buyer pays for an HOA transfer fee much like they would a membership fee to a health club; in other cases the transfer fee is split 50/50 or, in some cases, the seller pays.
