Who pays the transfer fees in a transaction involving an HOA?

Some homeowners associations charge fees for transferring the ownership of property from a seller to a buyer. Paragraph C, Fees, of the Addendum for Property Subject to Mandatory Membership in a Property Owners Association (TAR 1922, TREC 36-8) covers that cost.

It states that except for fees covered in Paragraphs A, D, and E, the buyer will pay all costs and fees associated with the property transfer. Paragraph C also contains a blank that caps the buyer’s responsibility at a certain dollar amount, after which the seller will pay the balance.

Your TAR forms library includes 126 forms available exclusively to Texas REALTORS® in addition to 32 forms approved by TREC for use by license holders. See them all at texasrealestate.com

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5 Responses to Who pays the transfer fees in a transaction involving an HOA?

  1. Ok, so what if the blank in Paragraph C is left blank, which is effectively $0. Does the Seller then pay the transfer fee for the Buyer since the cap is $0? Or is the transfer fee the Buyers unless that blank in Paragraph C actually has a number added, thereby establishing a cap?

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    • Tod Franklin says:

      Most HOA transfer fees are a few hundred bucks, far to small to warrant an attorneys time. The agents should work this out. Agents are not attorneys but they are licensed explainers. Should have been corrected or explained that blanks are interpreted as zeros. if it’s unclear to the seller, it’s potentially an E&O claim, and the selling agent should consider picking up the tab.

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  2. Tod Franklin says:

    This is a great post. Notice there is no cap for the seller. It is the sellers responsibility to understand potential transfer fees prior to contract execution. Recently I have ran across HOA’s that lable some transfer fees as buyer transfer fees. Their thought process is to create a revenue stream as some sort of “entrance tax”. My understanding is no matter what it is called, if it is only charged at time of transfer, it is a transfer fee. The language is very clear as to whom pays transfer fees. It is most important to have a clear understanding of what transfer fees will be charged at contract negotiation to avoid surprises. For example, Castle Hills in Lewisville, TX has a 1/2% transfer fee on every transaction. It is money raised for the good of the school system and a bad surprise if the parties are not aware of it until delivery of the HOA certificate.

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  3. markmcnitt says:

    Some newer communities in the Houston area such as Sienna Plantation also charge a “Foundation Fee” or “Community Amenities Fee”. Sometimes this is 1/2 of 1% of the sales price. This fee should likely be discussed and noted in the contract itself on how it will be paid. Just another reason to obtain the resale certificate for the home during the option period if at all possible.

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    • Cathy West says:

      Always a good idea to call the HOA prior to listing so Seller can be advised what costs we may have to review on potential contract offers.

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