Sellers in Arizona HOAs are often blindsided at closing by “disclosure fees,” “transfer fees,” “statement fees,” and “rush fees” stacked on top of one another by the association or its management company. A.R.S. § 33-1806 both requires the association to hand over a specific disclosure package and caps what it can charge to do so — with a civil penalty for overcharging.
What the association must deliver — within 10 days
Once the association (in communities of 50+ units) or the selling member (in smaller communities) receives written notice of a pending sale with the purchaser’s name and address, it has ten days to deliver, in paper or electronic form:
- A copy of the bylaws, rules, and declaration;
- A dated statement with the association’s contact, the current and unpaid assessments, whether the unit is covered by association insurance, the total reserves held, any recorded declaration violations at the unit, and pending litigation involving the unit;
- The current operating budget;
- The most recent annual financial report (a summary is allowed if it exceeds ten pages);
- The most recent reserve study, if any; and
- A summary of pending lawsuits in which the association is a named party (excluding routine assessment-collection suits against other members).
If a lienholder, escrow agent, or member requests the assessment/lien information under § 33-1807 and the association misses the deadline, it extinguishes the lien for the unpaid assessments then due (§ 33-1806(A)(3)(b)).
The fee cap: $400 aggregate — plus two limited add-ons
“The association may charge the member a fee of not more than an aggregate of four hundred dollars … for … resale disclosure, lien estoppel and any other services related to the transfer or use of the property.” — § 33-1806(C)
On top of that $400 aggregate, the association may add only:
- A rush fee up to $100, if the services must be done within 72 hours of the request; and
- An update fee up to $50, if 30 or more days have passed since the original statement or delivery.
The same cap applies whether the documents are delivered on paper or electronically — an association can’t charge more for a PDF.
- Collected only at closing. These fees “shall be collected no earlier than at the close of escrow” and may be charged only once per transaction (§ 33-1806(D)). No demanding payment up front.
- No fees outside the statute. “An association shall not charge or collect a fee relating to services for resale disclosure, lien estoppel and any other services related to the transfer or use of a property except as specifically authorized in this section.”
- Overcharging is penalized. An association that charges or collects a fee in violation of this section “is subject to a civil penalty of not more than one thousand two hundred dollars.”
Who this covers
The rules apply to the association and to a managing agent acting on its behalf (§ 33-1806(E)). And a purchaser or seller harmed by a failure to disclose the required information may pursue all legal and equitable remedies — including reasonable attorney fees — against whichever party failed to comply (§ 33-1806(B)).
If you’re hit with excess fees
- Ask for the fee itemization. The association must make its established fee schedule available to any interested party. Separate the capped $400 aggregate from any purported extra charges.
- Flag anything beyond $400 + $100 rush + $50 update. Additional “transfer,” “processing,” or “administrative” service fees for the disclosure/transfer generally aren’t authorized by § 33-1806.
- Confirm timing. Fees can’t be collected before close of escrow, and only once per transaction.
- Escalate. Overcharges carry a civil penalty and can be raised through an ADRE petition.