Whether you are purchasing or selling a home or condominium that is managed by a homeowners association (HOA), there are some additional considerations you need to make compared to an ordinary freehold home. Any kind of home you purchase or sell is subject to several closing fees that you will be required to pay.
When it comes to property governed by HOAs, there may be an HOA disclosure fee to pay in addition to the other closing fees for the house. In this article, our team of HOA managers takes a closer look at these fees.
Meaning of HOA Disclosure Fee
Homeowners association disclosure fees, also referred to as transfer fees, are standard fees that might arise when a property is transferred from one homeowner to another.
These fees are put in place to cover the expenses associated with document preparation, distributing homeowners association rules to new property owners, maintaining property inspection records, updating the owner’s names in databases, issuing new security codes and cards, and other administrative charges.
How Much Do HOA Disclosure Fees Cost?
Homeowner’s association disclosure fees vary from one development to the next and are set by the association’s management and governing documents, as outlined in the covenants, conditions, and restrictions (CC&Rs). These charges are determined based on the sort of services provided by the homeowners association to both the parties (buyers and sellers) involved in the property sale.
That being said, these kinds of charges can range from as low as $100 to as high as $1,000, with an average of about $250. Although the homeowners’ association sets the cost of disclosure fees, in some states, state laws regulate them. Buyers and sellers need to be aware that disclosure fees are sometimes excluded in real estate contracts; however, HOAs are required to disclose these fees to both parties before the sale.
Who Pays the HOA Disclosure Fee?
Either the buyer or the seller will pay the transfer fees, as specified in the homeowners association addendum that was initially signed along with the purchase contract.
It is not uncommon for people buying or selling property governed by a homeowners association to be caught by surprise by certain fees by the time their property deal is finalized.
It is crucial for all parties involved in the real estate deal to determine who will be responsible for paying the HOA disclosure fees, so they can accurately budget the total closing expenses accordingly.
HOA Management in Arizona
If you are interested in buying a home, ensure that a reliable Arizona company manages the HOA. Our professionals at City Property Management will be able to assist anyone seeking the best home environment.
