HB 14-1254 Transfer Fee Bill Moves to Senate

David A. Firmin | Wednesday, February 26, 2014 | State Legislation

The Colorado Transfer fee bill has passed out of the House of Representatives and moved to the Senate un-amended.  As drafted, HB 14-1254 mandates that a manager and any management company disclose to the executive board of each HOA for which it provides or offers to provide services, during contract negotiations and thereafter on an annual basis, all fees and other amounts that the manager charges or will charge to the common interest community, unit owners, and purchasers of units in the common interest community for or as a result of any service, product, transaction, or item of value provided by the manager, any employee or contractor of the manager, or another individual or entity with whom the manager associates in the performance of community association management services. 

The bill, as passed by the House also mandates that the manager disclose all remuneration the manager or any subsidiary, affiliate, or related person or entity receives or will receive, directly or indirectly, in connection with its relationship with the common interest community.  Fees must be disclosed during both the negotiation of the contract and on an annual basis thereafter as well as any other remuneration or fees received by the management company related on an annual basis but does not set a limitation or cap on what fees may be charged.  

While not the original transfer fee bill that was rumored to be originally considered, this bill appears to reflect the hard work of stake holders to draft legislation that provides transparency to owners within common interest communities.

Comments

At what point and in what manner are these "fees" disclosed? Only when someone asks, as in an open-records request? I cannot imagine a management company's willingly disclosing all of its fees and charges. If this post is correct, the requirement applies to not-just "transfer fees," but all fees charged by a management company. If this is correct, I think homeowners will be shocked at the fees added on by management companies above and beyond their monthly contract charge. Companies get away with charging extra fees because board members may not even be aware of them or may not know their purpose. Our management company charges a fee whenever someone writes a bad check (NOT an NSF charge to compensate the association, but a fee paid to the management company), and a monthly charge to the HOA for each delinquent account that the management company "monitors." We know that companies charge an inflated fee for supplies (paper, copies, envelopes, etc., even though these have the company's name on them and not the association's), and I have even seen fees charged for each box of records stored by the management company. And then there is a charge by the management company if it has to "search" for records upon request from an owner. I have seen ancillary, added-on fees that equal the amount of the contracted fee each month. Nice work if you can get it!

Hi Joe, At first glance I think these are the types of things the bill may be trying to expose and I say this is a great way to expose these types of fees. there are companies who profit from using specific vendors and steer their Boards in the wrong direction, intentionally, so they can get a kickback OR charging $500 for a transfer fee??? (these are just two examples I am thinking this bill will cover). I don't need to preach to the quire, in my opinion, for the others out there who may think this is unfair or unclear, perhaps not nickeling and diming the Associations will help increase the respect of the company and growth in the long run. I anticipate including this information on an agenda, once a year, probably at the Annual Meeting for all the members to be aware of what our company charges. It is transparency, which will hopefully equate to honesty and integrity, and this is what we should represent as managers. We shouldn't need a law to tell us to be honest with one another.

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