Inherited an HOA property: Do I need to pay a new owner's fee?

Any transfer fee should bear some relation to work done by the HOA to help effect the transfer.


My brother and I inherited our father’s home, which is in a planned community governed by a homeowners' assocation. My brother wasn’t interested in it, so my husband and I bought my brother’s half from him. We’ve been living in the home and paying HOA dues for months. Now the HOA says we owe them a “new owner’s” fee of $200. Can the HOA really make us pay this?


You need more information from your homeowners' association (HOA) to answer this question. First, you need to know why the HOA is charging the fee. Did the fee arise from the inheritance, or from the transfer from your brother? You must also find out what provision in the documents governing your development the HOA is relying on to assess the fee.

To be a valid HOA charge, your development’s Declaration of Covenants, Conditions, Restrictions and Easements (CC&Rs), or the HOA’s bylaws must grant the HOA the authority to assess the fee. Ask the HOA what provisions authorize the new owner’s fee. If there are none, the fee might be invalid.

Also check the fee’s validity under your state’s laws. Some state’s laws prohibit certain types of HOA fees, or restrict the amount HOAs can charge.

Even if the HOA has the authority to charge the new owner’s fee, whether the charge is applicable in your case depends on the purpose of the fee.

HOA transfer fees are usually meant to compensate the HOA for its time and expense in assisting with the home’s purchase and sale. For example, an HOA might spend time and money to provide a buyer with copies of the development’s governing documents, HOA financial statements, or documentation of outstanding dues, fees, or HOA liens on the home.

In your case, this type of fee should not likely apply. Inheritances are usually excluded from transfer fees, because the HOA is not involved, and puts in no time or expense to assist with the transfer. The same goes for the transfer from your brother to yourself and your husband; your HOA probably did not assist, or incur any expense, in the transaction.

If the fee is for some valid purpose other than compensating the HOA for its assistance, you might still argue that since you only received one-half interest in the property during the conveyance, you should only owe one half the fee.

After researching the matter, if you believe the fee is invalid (or should be reduced), meet with the HOA’s board of directors (bring a copy of the relevant laws or provisions) and calmly present your position. Hopefully, the HOA will agree, and remove the charges.

Unfortunately, HOAs are not always swayed by logic, and your HOA might not agree to remove the fee. Refusing to pay, however, is not a good option. Most HOAs have the power to assess penalties against a nonpaying owner, and can even place a lien on the home.

Hiring an attorney to write an opinion letter or to initiate legal action might help change the position of the HOA. In your case, however, you’d probably spend more money hiring legal help than you would just forking over the fee. Sadly then, your best bet might be to just cave in and pay.

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