I live in South Florida where Home Owners Associations and Condo Owners Associations are dominant. I'm trying to get an unbiased opinion on Association Move In Fees (Non-Refundable) vs. Security Deposits (Refundable).
I have a community I have recently purchased in that wants to charge the tenants a $350 Move In/Move Out fee. It seems that some Property Management companies are going this way to reduce paperwork of sending an itemized deduction list for security deposits.
The problem I have is as a Landlord when I go to court I have to present an itemized list, documentation I followed the statutes and the judge usually reduces the amount to what is fair. The court just awards an actual cost as you are out $10 the award is $10.
The HOA and COA's aren't regulated with the Move In/Out Fee and don't charge an actual cost amount. The one CAM property manager I spoke with said the fee is for the maintenance staff to put out traffic cones for the moving truck parking, and to offset wear and tear on the asphalt from the truck. I will assume part is to cover the administrative cost of adding/changing tenants names in the access systems.
Then the catch, the CAM property manager said they are using part of the fee for reserves for the parking lot.
I'm trying to get an unbiased opinion on Association Move In Fees (Non-Refundable) vs. Security Deposits (Refundable)?
If I as a landlord charge a Fair security deposit and have to itemize and return the remaining funds to the tenant, Why can a HOA or COA charge an Unregulated fee amount and Not have to itemize actual expenses and return the remaining funds?
Should an HOA or COA be allowed to use a Move In/Out fee to fund reserves?
If the association also charges an Application Fee to the tenant to cover the credit and criminal background check, and administrative expenses does $350 sound excessive for maintenance people putting out traffic cones and any wear and tear the moving truck may cause?
Your opinion matters as I can't determine if my view is biased until the majority of society voices their view.
Unfortunately its not a matter of opinion. Its a state by state law that may be interpreted differently by some HOAs. I dont know the specifics of the Florida law but as an example, in California, the HOA can only charge a fee that is equally offset by a necessary expense. You should research the FL law. Is there really damage being done to the pavement from a moving truck? I doubt it. Where is that money going? I would think the HOA must track the expenses it incurs but again, its a state specific law that Im not familiar with.
That is tricky @Jeff B. but like like @Rob Beland mentions these things are state specific. In Oregon it is illegal to charge fees. That way we have this silly thing called pet rent which really angers tenants.
For me it isn't worth the brain damage so I'd build it into the rent and not make things complicated.
BTW your laws regarding landlord tenant laws have nothing to do with what HOA's do. There is no comparison. These are different animals.
For Florida there are no statutes or laws regarding the fees or amount of fee for applications or move in/move out. I am sure if it is egregious then it could be argued in court (but then you have to value your time, and expenses vs. return on investment)
In my internet research I became aware of the limits that California has in place and that Move In/Out fees are regulated in Illinois but I am trying to get a overall consensus from the Real Estate Investor side.
Wowsers. I have properties in 5 HOA communities and NONE of them charge a specific move/in/out fee. They do charge a crazy "application" fee for tenants though.
This is a good question. Please let us know if you find an answer!
I' ve seen a few of these, and while I don't think it's right, it is what it is. There's no justification for it, but there does't have to be, it just discouranges rentals. Yes, they can do it as they're not covered by tenant/landlord laws. But, you could charge move in/move out fee yourself, if the market would bear it.
I don't know how things work in FL, but in the DC metro area, move-in fees are charged by the vast majority of condo/coop associations. Not so much in HOAs since there is no wear and tear on the common areas. Move-in/out fees are set by the board and can really be as much as they want. Yes, in some cases, they're used or raised to fund other projects, and while this isn't technically right, there are limited ways for a not-for-profit corporation to bring money in and that's one of them. Having said that, I certainly wouldn't advertise if that were the case.
I would doubt they're really legal for the reasons mentioned. Sounds like an interesting potential class action lawsuit. But, then again, you'd be breaking the bank of your own HOA LOL.
Seems like it might be worth having a lawyer approach them about, though. Which could be taken up by the board members to either reduce the fee or possibly deal with the cost of lawsuits. Perhaps you can find out what the process is to change the HOA/COA rules?
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