CONDOMINIUM ASSOCIATIONS EDUCATION

  TRANSFER FEES

This is another chapter of the Florida Condo Act that board members and management companies love to ignore. The so-called "Application Process" is in many associations only a scam to make some money.  Most of the board members dealing with these applications are ill-equipped to handle these issues. In quite a few associations the process is more harassment than a serious attempt to weed out the bad apples.  In some associations it depends on how well the seller knows the board -- or gets along with the manager.  We have seen potential buyers and renters refused for all kinds of reasons, most of them not based on financial issues -- creating litigation and/or lawsuits.

Realtors are furious if boards deny applications, because they did the work and now don't get paid for it because of the buyer being denied.  We already heard about this problem in 2003 during the hearings of the HOA Task Force.  Especially now with the real estate market as depressed as it is, all parties involved are hurt even more.   Families, forced to sell to avoid foreclosure, are getting in even deeper financial problems, if the board denies the potential buyer -- after they finally found one!

Board members, managers and attorneys seem to be very inventive when it comes to circumventing the Florida statutes, which limit the transfer fee to $150. They call them "Impact Fees", "Move-In Fees" (adding "elevator fees", if applicable) and "Application Fees."  We have even seen cases where application fees were non-refundable and boards denied the first few buyers, just to make some extra money!  Normally it hurts the seller most, since buyers have a big inventory of units for sale from which to choose.

Please read here the WARNING LETTER sent by the Fort Lauderdale Bureau of Compliance to the WaterGarden Condominium Association, Inc. (January 7, 2008). 

So far, the legislature has failed to put a stop to this useless system, especially since the fight of the purchase/lease applications is a steady source of income for some of the specialized law firms.

If somebody buys a unit at foreclosure sale, what's the board going to do? Tell the buyer you can't live in your unit because we don't like you?

Florida Statutes 718.112(2)(k)

(k) Transfer fees.-- An association may not charge a fee in connection with the sale, mortgage, lease, sublease, or other transfer of a unit unless the association is required to approve such transfer and a fee for such approval is provided for in the declaration, articles, or bylaws. Any such fee may be preset but may not exceed $150 per applicant. For the purpose of calculating the fee, spouses or a parent or parents and any dependent children are considered one applicant. However, if the lease or sublease is a renewal of a lease or sublease with the same lessee or sublessee, a charge may not be made. Such fees must be adjusted every 5 years in an amount equal to the total of the annual increases occurring in the Consumer Price Index for All Urban Consumers, U.S. City Average, All Items during that 5-year period. The Department of Business and Professional Regulation shall periodically calculate the fees, rounded to the nearest dollar, and publish the amounts, as adjusted, on its website. The foregoing notwithstanding, if the authority to do so appears in the declaration, articles, or bylaws, an association may require that a prospective lessee place a security deposit, in an amount not to exceed the equivalent of 1 month's rent, into an escrow account maintained by the association. The security deposit shall protect against damages to the common elements or association property. Payment of interest, claims against the deposit, refunds, and disputes under this paragraph shall be handled in the same fashion as provided in part II of chapter 83.

DECLARATORY STATEMENT: Schooner Village Condominium Association, Inc.