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The Federal Housing Finance Agency in March issued its long awaited final rule on transfer fees, and it’s a big win for community associations.
FHFA initially proposed a regulation that would have banned federally backed mortgages for property in a community association with a deed-based transfer fee. As originally drafted, the proposed rule would have cut off nearly all mortgage funding for the 11 million housing units, roughly half of all community association housing, that have existing deed-based transfer fees. Over the past two years, CAI members worked diligently to gather data on transfer fees, submitted comments to FHFA and brought the issue to the attention of key lawmakers.
Since assessments are fees for maintenance and use of utilities and not consumer debt, many association board members wonder if their communities are subject to the Fair Debt Collection Practices Act (FDCPA). Some may be surprised to learn most state and federal courts consider assessments to be "debts" according to this definition: A debt...