Fee Disclosure Bill Introduced

David A. Firmin | Tuesday, February 4, 2014 | State Legislation

The long awaited bill relating to fees charged by managers was introduced today in the Form of HB 14-1254 by Representative Labuda.  It is co-sponsored by Senator Balmer in the Senate.  While this bill was much anticipated, as introduced, the bill does not cap or place restrictions on transfer fees.  Instead, the bill requires that during negotiations, and then every year thereafter, the management company fully disclose “all fees and charges that the manager will bill to the HOA for services performed by those employees or subcontractors.”

The bill also provides that failure to truthfully disclose all fees and charges could result in a fine being levied against the management company in an amount not to exceed Two Thousand Five Hundred Dollars ($2,500).  Fines would be imposed by the Director of the Division of Real Estate and hearings would be conducted in accordance with the State Administrative Procedures.  While not quite the anticipated bill, HB 14-1254, as introduced, will provide additional transparency to owners buying into communities.

Comments

Our firm charges transfer fees to the Seller (individual owner) not the HOA - we still disclose on our Schedule A provided to the Association as an addendum to the Management Agreement. As such, are we in compliance with the spirit of the bill?

Given that the bill is being introduced to increase transparency, my guess is that there will be an additional disclosure requirement such as an annual report to the board showing the fee schedule

the bill includes wording indicating fees charged to unit owners must be listed.

What about situations where the Association sets and collects the fees directly?

It appears that the buyer is relieved of paying the transfer fees and the management companies are shoving the charges off on to the members of the of the associations they manage. As a homeowner why should I have to pay for something that is of no benefit to me? The buyers and the management companies are the only ones who benefit.

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