HOMEOWNERS are discovering a slew of fees that they fear could threaten the sale of property.
For Tennessee resident Ralph Tucker, often missed HOA transfer fees can cost up to a whopping $200.
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A retired business owner, Tucker felt confident managing the sale of his home in the Hearthstone Neighborhood in Knoxville last May.
He was leaving the subdivision for another nearby neighborhood and both had HOAs, which Tucker appreciated.
When he looked at his buying and selling documents, he saw charges of $200 that he figured were just fees but was confused when he realized the money went elsewhere.
"I assumed it was going to the HOA treasury," he told ABC affiliate WATE.
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"I subsequently found out that was not the case."
The fee was listed as an "Estoppel fee" which, in real estate, essentially means extra closing costs, documents revealed.
Tucker was fine paying the costs as HOAs require money to maintain shared property like lawns and public pools.
But, he said: "I found out that it didn't go to the HOA.
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"I've been told by non-legal personnel that they don't believe it was a legal fee because it was not board-approved by the HOA."
Instead, Tucker discovered that the fee went to the Cedar Management Group, a company that manages the Hearthstone Homeowners Association.
He contacted the group to get clarification on what the money was going towards, and they confirmed that it was a normal closing cost.
“Well they told me that the fee was legitimate and that was their overhead,” said Tucker.
His daughter also recently sold a property in Hearthstone and had to pay an extra $200 fee, but hers was called an "HOA certification fee."
Cedar Management said this is an administrative fee that covers the costs of certifying the dues.
When talking to his buyer, Tucker discovered that they had to pay an additional $500 in fees which he hopes goes in part to the HOA.
"My concern is if people sell the property at some point with a high-interest rate, a buyer is going to come in and look at a $500 administrative fee and back out of the deal," he said.
HOA transfer fees can vary from home to home, but most cost around $200 to $250.
Most states do not hold guidelines on what can be charged, but there are sometimes legal guidelines depending on where you live.
It's also unclear who pays the fees, as the buyer and seller could transfer the costs depending on the deal they come up with.
It's one of the many fees that first-time home buyers should expect to add to their steep bills.
Common upfront expenses include closing costs, the title fee, an appraisal fee, a home inspection fee, and any other unexpected issues that crop up.
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It's important to research whether a property requires HOA fees as some owners learn they can't keep up with the rising costs.
