From Byron King: HOA Fees and the SCR310 Contract

//From Byron King: HOA Fees and the SCR310 Contract

From Byron King: HOA Fees and the SCR310 Contract

SCR310 section 6 states that the buyer’s transaction costs include…all costs to obtain information from or pertaining to any owners association (aka certificate of assessment).

This is interpreted as the cost to obtain documentation about the seller’s owners association issues and costs to investigate the owners association (e.g. getting the documentation on the seller’s owners association account, hiring a private investigator, lawyer, accountant to review the management of the owners association and the financial statements of the owners association and interviewing owners about their views of the owners association).

SCR310 section 6 allows the seller to pay an amount of the buyer’s transaction costs up to $ __________ or __% of the purchase price…whichever is higher.

SCR310 section uses a checkbox and blank line so the buyers and sellers can agree (e.g. by agreement, complying with local market custom) to contract who pays the transfer fees and owners association fees that operate as private transfer fees under other names (e.g. capital contributions, conservancy fees, estoppel fees, or otherwise named but similar fees paid to the owners association). The blank line can be used by the buyers and sellers to augment the checkbox and cover specialized issues with the transaction’s owners association (e.g. checkbox says seller to pay the transfer fees, blank line writing says that buyer to pay the "quality of life fee"). In some areas of SC, public transfer fees are legally grandfathered. Currently, the SC legislature has made public transfer fees illegal unless grandfathered. Private transfer fees are often referral to by a variety of names such as owners association fees and other names. The certificate of assessment documentation is a buyer transaction cost per the SCR310 agreement and is not considered a private transfer fee per the SCR310.

SCR310 section 22 covers special assessments by the owners association (e.g. pre-closing approval is a seller’s cost, post-closing approval is a buyer’s cost). Assessments (non-special assessments) are to be prorated/settled annually or as appropriate.

Posted by: Byron King on 01/18/19 (This information is only accurate as of 01/18/19. You must contact SCR for updates and changes to this information after 01/18/19 as laws and regulations may change over time. SCR 803-772-5206 or email info at screaltors.org)

By |2019-01-18T15:33:52+00:00January 18th, 2019|Legal FAQs|0 Comments

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