Tuesday, February 4, 2014
HOA “exit tax” will surprise home sellers
Selling your home in a homeowners association (HOA)? Open your check book to the sum of $50 to $1,150 to pay the HOA “exit tax” better known as the HOA Transfer Fee. If you don’t pay it you can’t sell your home. Sell the home yourself, you still pay the tax. The amount is not negotiable, can’t be shopped for in the market place, is not limited in amount, relates not to work performed but is mostly used as supplemental income and profiting by property management companies and doesn’t benefit the HOA. Worse yet you won’t know about the fee until you’re closing on your home, the charges will not be documented or explained, you will not have any venue to contest the fee, and your REALTOR and Title Company will just direct you to pay it or you can’t sell. Yes, this is worse than the dreaded “tax man” that so many hate but with no rules or limits. This fee costs home sellers and buyers $15 million a year. The legislature will be considering a Bill, HB 14-1254, to limit this abusive practice that was made illegal in 2011 except on residential home sales in HOAs, mobile home parks, and timeshares. It’s time fix the law, remove the exception, and end another unwarranted fee.