Wednesday, February 26, 2014

Property Managers Continue Taxing Authority in Colorado

So you think only government entities have taxing authority?  Thank the Colorado legislature and the Community Association Institute (CAI) for bestowing this authority on HOA property property management companies (PMCs).  The definition of a tax is "a compulsory contribution to state revenue, levied by the government on workers' income and business profits or added to the cost of some goods, services, and transactions".  Similarly, PMCs have the authority to levy a compulsory "exit tax", better known as a transfer fee, on the sale of homes in HOAs. for no other reason than "because they can".  Making this worse, this is a no questions asked fee, no rules or amount limits, sellers can't shop for a better rate, no means for home sellers to protest the tax because if you don't pay you can't sell, the fee is used by private companies (PMCs) to enhance profits, and no one in or out of government has oversight authority over the abusive use of the fee: worse than any tax.  This taxing authority to a private firm is unprecedented and ignored by our legislature costing home owners $15 million a year.  This year HB 14-1254 attempted to rein in this abusive practice but the CAI (trade group for PMCs) not only road blocked the Bill but re-wrote it to ensure the transfer fee continues unabated.  When will our legislators end this extraordinary and improper practice?

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