Complaints

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• Initial Complaint

  Date:08/08/2024

  Type:Billing Issues
  Status:

  AnsweredMore info

  Complaint statuses

  Resolved:

  The complainant verified the issue was resolved to their satisfaction.

  Unresolved:

  The business responded to the dispute but failed to make a good faith effort to resolve it.

  Answered:

  The business addressed the issues within the complaint, but the consumer either a) did not accept the response, OR b) did not notify BBB as to their satisfaction.

  Unanswered:

  The business failed to respond to the dispute.

  Unpursuable:

  BBB is unable to locate the business.

  We sold our home, *** ******* ** in Pismo Beach in July 2024. Escrow closed on 7/29/2024. When we went to sign the escrow paperwork on 7/26/2024 at Fidelity National Title Company, we were told that a HOA transfer fee of $250.00 was being charged to us by Paragon Association Management Services, that manage our HOA named Las Ventanas Del Mar Maintenance Association. We questioned this HOA transfer fee and were told to contact Paragon Association directly, contact person Donald Martin.
  My spouse emailed and called Donald Martin multiple times on 7/25/2024 without any response. Finally with an email from the title company on 7/26/2024, Donald Martin called my spouse back and told him that it was "customary" to charge a HOA transfer fee when a property is sold, that "that's what all the HOA's do in our area". Therefore he demanded payment of $250.00 transfer fee through escrow and we would not be able to close escrow without paying this.
  We reviewed all of our HOA paperwork, and no where does it mention that a transfer fee may be charged to the seller of a property and no where does it mention the cost of this transfer fee.
  The title company told me that they received the By-laws and Rules and Regulations digitally from the HOA. No paper or postage was involved.
  My spouse tried to visit the office of Paragon Association Management on 7/29/2024 before we closed escrow, to further investigate where in the by-laws or rules and regulations the transfer fees are mentioned, to find that it was a post office box and no real front office
  Because of the urgency to close escrow, otherwise our real estate agreement would have transpired, we paid the transfer fee in escrow as we had no recourse in such a short period of time. 

  Business Response

  Date: 08/09/2024

  This matter involves the sale of a home by an owner in a homeowner association and the information and documents provided to the buyer during escrow.  California Civil Code § 4525 places the obligation to provide association information and documents on the seller of the home.  Neither the association nor the management company is legally required to provide this information.  State law allows the selling owner to request the association/management company assist the owner in fulfilling their disclosure obligation for a fee.  This civil code and owner’s responsibility have been disclosed to all owners every year when the annual budget and disclosures are sent to the owners.  On June 26th I was contacted by Fidelity National Title to assist this selling owner in preparing the association disclosures and documents for the buyer.  I disclosed the $250.00 fee at that time.  A month later, just before the close of escrow, I was contacted by the selling owner about the fee and I tried to explain the legal requirements stated above and extra work this necessitates.

  Customer Answer

  Date: 08/19/2024

  
  
  
  
  Complaint: 22111781
  
  
  
  I am rejecting this response because:
  
  The transfer fee of $250.00 was never disclosed in any documents that the HOA management company has provided to the homeowners. Therefore, the homeowners of this association would NEVER know of such a charge or the amount of this charge until escrow would be open. This is NOT transparent by Paragon Association Management Services, the HOA management company.

  The latest communication, dated November 2023 (attached), from the manager of the HOA, Donald Martin, is that hard copies of certain documents, ie Articles of Incorporation, CC&R's etc, would be provided for a fee, but digital copies would have NO Charge. No "transfer fee" or the amount of such fee is ever mentioned in any documentation.

  Indeed the title company, Fidelity National Title Company, sent a demand letter on June 26, 2024 (when escrow was opened-attached) to the HOA management company, to request any outstanding fees or violations of the property and to obtain copies of the HOA documents required for close of escrow, but I as a homeowner, seller of the property, was not aware of any "transfer fee" ($250.00) that existed with selling of the property. I was aware of document fees, if hard copies were provided. The documents provided to the title company were all digital, per the title company. 

  I was made aware of the "transfer fee" that was being charged when I went to sign escrow papers at Fidelity National Title Company on July 25,2024 and that's when I questioned the so-called "transfer fee". I was not privy to the demand letter of June 26, 2024, from the title company until the close of escrow on July 25, 2024.

  Civil Code 4525 covers the cost of document fees, but DOES NOT cover so-called "transfer fee". Once again, NO Where in the documents that the homeowners receive yearly is there mention of "transfer fees" or the cost of these "transfer fee". 

  I request that the $250 be refunded to me for non disclosure of this "transfer fee" and an addendum or follow up letter be sent to all homeowners of Las Ventanas Del Mar Homeowners Association disclosing that, if these homeowners choose to sell their homes, that a so called "transfer fee" exists and what the amount is.

  
  
  Regards,
  
  
  
  T***** ********
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  

  
  

  Business Response

  Date: 08/20/2024

  As I stated before, California law places the obligation to provide the association's information and documents needed for an escrow on the selling owner.  This is not the obligation of the association or its management company.  This is disclosed every year to the owners in the disclosure packet under the section labeled, "ESCROW / SALE OF UNITS".  This section states the civil code, "requires an owner within a common interest development to provide a prospective purchaser with the Association's governing documents, financial information, and other extensive information."  It further states the owner may request assistance to provide this information for a fee.  Please be aware this notice is in the disclosure packet as a courtesy.  There is no legal requirement to provide this disclosure.

  I received a request from the Title Company to assist the owner with their legal obligation to provide escrow documents to the buyer.  At that time i disclosed the $250.00 fee about a month before the close of escrow.  There was no concern expressed about the fee during that timeframe.  Since this work is not a responsibility of the association, it is not part of my compensation with them.  I do not beleive I should be required to provide services without compensation.

   

   

  Customer Answer

  Date: 08/27/2024

  
  
  
  
  Complaint: 22111781
  
  
  
  I am rejecting this response because:
  I am aware of Civil Code 4525 and California's law placing the obligation of the seller of a property to provide to a potential buyer the association's information and documents, ie Articles of Incorporation, CC&R's etc. Civil Code 4525 does not mention that a management company or the HOA requires payment for this unless the documents provided are in hard copy form. More so, there is no mention of a so-called "transfer fee". Therefore continuing to suggest that Civil Code 4525 gives the HOA or the management company the legal right to charge a fee, for sending the documents to the escrow company digitally or filing out the escrow 1 page demand letter to disclose if the seller is up to date on HOA dues or if there are any HOA violations, is  incorrect. The so-called "transfer fee" is no where mentioned in Civil Code 4525.

  Additionally, the so-called "transfer fee" was never disclosed until the close of escrow, therefore concern could not be expressed as it was unknown to me.

  If one provides services for anything, the fact that they charge a fee and the amount of the fee should be disclosed initially. Donald Martin, manager of the HOA could have easily either picked up the phone or emailed us directly to let us know of a so-called "transfer fee"  that we would incur and the amount of that fee, if he should do any work to close an escrow.

  It is rather outrages that to fill out a 1 page demand letter-(form provided by escrow) that Donald Martin filled out, for a charge of $250.

  Escrows send demand letters to any and all parties associated in property exchange, ie mortgage companies, etc for final pay off through escrow. No where do these business' charge a fee for doing so, it it just part of doing business.

  
  
  T***** ********