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ESCROW FEES
 In
a just released case, the Court of Appeal ruled that management companies
are allowed to profit on transfer fees charged in
escrows.
Plaintiff argued that management
companies violate the law when they charge excessive document fees and
transfer fees whenever a home or condominium is sold. Plaintiff
claimed that
Civil Code §1368(c)
prohibits associations (and their
managing agents) from charging a fee greater than their actual
cost to reproduce documents or to transfer title records:
neither an association . . .
or similar entity may impose or collect any assessment, penalty, or fee in
connection with a transfer of title . . . except for . . . An amount not to
exceed the association's actual costs to change its records.
The court disagreed. It pointed
out that the statute prevents associations from charging extra fees, not managing agents. The court
commented that competitive
forces, not the statute, will constrain a vendors' fees and charges.
Berryman v. Merit Property Management, Inc.
This ruling is similar to a 2005
case involving
collection fees.
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Sincerely
yours,
Adrian Adams, Esq.
Adams Kessler PLC |
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