Condo Media - December 2021 - 41

COVERING COSTS
What can or should the associations
do to recoup the cost in excess of the
cap? I've spoken to some attorneys who
have taken an a la carte approach, that
is, indicating that they will have their
client associations provide the buyers
with additional back up information
such as an insurance declaration page
and policy, litigation summary, and
explanation for an additional/separate
cost over and above the $125.00 cap.
The practice of condominium law is
fl uid, and I'm not above evolving and
adjusting my beliefs and practices.
As of this writing, I have not heard of
any formal push back from buyer's attorneys,
brokers, or buyers themselves
regarding this, but at this point, perhaps
it may be better to take a different tack:
Impose a special assessment against
any unit owner who wishes to sell his
or her unit as a transfer fee, much like a
working capital fee imposed by a developer
upon the sale of any new unit, or a
move-in/ move-out fee charged to unit
owners renting or selling their units to
cover damage to common areas such as
stairs, hallways and elevators.
Regarding the working capital assessment
reference, as a rule, when any new
unit comes online or is added to a condominium
and sold, the declarant takes
and deposits into the initial association
bank account a fee from the buyer
representing two months of monthly
assessments to give the association's reserve
account some seed money. While
this practice is usually just for fi rst time
sales of these units, many associations
have continued the practice of collecting
working capital assessments each
time the unit is resold.
CHANGING POSITION
Candidly, I was against this overextension
of the initial reserve funding
mechanism . I even voiced my objections
in this column several years ago.
But the practice of condominium law
is fl uid, and I'm not above evolving
and adjusting my beliefs and practices.
Accordingly, once the resale cost cap
was passed, I am revisiting the issue
of extending the two-month working
capital assessment to all unit transfers.
I'd simply call it a " transfer fee, " and
I'd submit that this amount would ultimately
cover the amount of additional
costs related to the preparation of the
resale certifi cate.
Before the cap, I had argued that
the working capital fee for
resales was wrong because
it was not rooted in the actual
transfer of the property,
like the move-in/move-out
fee, but now, I am changing
my mind and believe that
it would be a simple matter to relate
the working capital/transfer fee to
the excess costs inherent in the association's
participation to the closing
or resale process (not the actual resale
certifi cate preparation).
The working capital or transfer fee
would be just for that, a transfer in and of
itself, and not within the scope of a resale
certifi cate preparation to avoid the cap
limit. While a board could conceivably
charge this type of transfer fee via its
rule making authority, I suggest that the
best and safest way to implement this
fee would be to amend the association's
Declaration or Bylaws wherever assessments,
budgets, etc., are referenced.
I had originally intended to head back
to the legislature in an attempt to reform
this law, but again changed my mind and
instead will suggest to my clients and to
all of you concerned to amend your condominium's
governing documents with
the intent set forth above to recoup the
transaction cost to the association.
■ FRANK A. LOMBARDI, ESQ., CCAL
IS A PARTNER IN LOMBARDI
LAW GROUP.
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December 2021 CONDOMEDIA 41
Condo Media - December 2021

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