A Closer Look at Conveyance Fees: Are They Really Out of Control?
Conveyance fees are a part of doing business. When it comes to transferring HOA fees, the amount charged can vary depending upon the HOA. Just the word "fees" tends to make consumers cringe, whether they are buying a home or a new vehicle. Learning how conveyance fees apply to real estate transactions involving an HOA can help buyers better understand the purchasing process.
HOA Fees in General
When you purchase a home or condominium that has an HOA you will inherit the membership fees that accompany the property sale. If you've never lived in a community with an HOA, it's important to learn what the fees cover. If you are familiar with HOA communities, you will want to compare the services offered in relation to your former home.
HOA assessments provide important benefits, including:
- Maintenance items not covered by the locality. The HOA/condo assessments cover such maintenance items as sidewalks, roads, and playgrounds
- Maintenance of the community swimming pool for association members
- General lawn services for every home
- City services such as trash removal, water, and sewage
- Pest control, especially preventative services
An HOA/condo association manages tasks and duties that affect all association members. By paying association assessments, residents enjoy peace-of-mind that these and other responsibilities are in the right hands.
HOA Fees Upon Sale
Understanding the assessment fee structure of an HOA/condo is important when purchasing a home. Equally important is understanding associated conveyance fees that accompany the sale. How HOA's and/or management companies structure conveyance fees depend upon several factors, including the size of the community and the amount of research and preparation needed. The fee is something that neither the buyer or the seller, have control over.
A management company sets their fees based upon the amount of work involved, which typically includes expenses such as:
- The cost of management time required for compiling and copying the property inspection records
- Preparing copies of the rules and regulations for the buyer
- Any fees associated with updating the lien for the new owner
Who pays the conveyance fee is something for the buyer and seller to decide.
The conveyance fees are separate from closing costs and realtor fees. While the associated fees with home buying are enough to confuse anyone, knowing what your HOA conveyance fees cover is fairly simple.
Documentation from the management company itself—and not the seller—is essential for buyers to understand topics like covenants, insurance, and other valuable information about the association. Gathering the necessary information takes time and the information gathered is unique to each sale.
Real estate professionals sometimes undervalue the effort HOA management companies invest in home sales. Most importantly, state regulations are in place to govern HOA conveyance fees. The regulations are a protective measure, aimed at protecting buyers from exorbitant conveyance fees.
Purchasing a home is a major financial decision that requires transparency and due diligence on behalf of everyone involved. When purchasing a home in a community with an HOA, paying conveyance fees is a necessary and important part of the process.
A properly managed HOA provides strong leadership that reflects the spirit of the community. At RealManage, we have the professional experience needed to make the home buying process smoother for new members.
HOA management requires time—something volunteer board members don't have. Investing in professional property management will reflect a positive image on the association, which, in turn, will attract new home buyers.
RealManage provides homeowners association management to a variety of community associations, including single-family associations, condominium and townhouse associations, cooperatives, luxury high-rises, and master-planned communities. Learn more about us and the services we offer by contacting us today.