For some time now Home Owners Association management companies and some developers have abused the process of transferring ownership of real estate [mainly homes]. Holding closings “hostage” by withholding documentation until someone pays in advance became the norm. The Arizona Legislature has stepped in and placed limits on what can and can’t be done.
HOA Fee Limits go into effect on December 31, 2011, which restrict the amount that can be charged for preparing documents related to legal disclosures an HOA must deliver during the sale of a home to no more than $400. Additionally, the HOA may not collect this fee earlier than the close of escrow, nor charge the fee more than once to a homeowner for a transaction, according to the new law, ARS 33-1260 (C,D); ARS 33-1806 (C,D); SB 1149. The new law does not apply to or limit “transfer fees,” which an HOA may charge. Transfer fees are frequently a percentage of the sales price of the home and may range into the thousands of dollars. Check out these issues early on, as you prepare to list a home governed by an HOA or as part of your due diligence when assisting a Buyer.
Now, when a Buyers wants to obtain documents with a purchase contract to complete their due diligence the HOA management company can wait until closing for payment just like everyone else. A really big thank you to the Arizona Association of REALTORS and the Arizona Legislature for working to protec home owners rights.