What’s in a Transfer Fee-That is the Question?
Written by: David Firmin on Wednesday, January, 22nd, 2014
Last week it was reported that Rep. Jeanne Labuda indicated that she would be introducing legislation taking aim on management company transfer fees. This sparked tremendous debate on both sides of the issue and the value of a transfer fee.
In response to the debate, it is being reported that the bill may be amended prior to its introduction. The supposed changes would raise the cap on transfer fees from $50.00 per transfer to $150.00 per transfer with an option for the management company to negotiate a higher fee with the association, if it explains the need for the higher fee. This amendment would address the concerns of both sides of the issue regarding the amounts of the fee and also give justification to this fee. By justifying the fee amount, at a general meeting, the management company and the members of the association will be able to discuss the matter and arrive at a mutually acceptable transaction cost.
The Colorado Division of Real Estate is also looking at the issue and has the power to mandate management companies list their fees on its website to create further transparency. One thing seems certain, the legislation is coming and that the legislature seems willing to work to craft a bill that works for everyone.