Move-In/Out Fees. Associations are allowed to charge move-in, move-out fees, also called "transfer fees" (
Corp. Code §7140(g)) but no more than is necessary to defray the costs for which they are levied.
Civil Code §1366.1. This restriction does not apply to
management companies.
Fee Justification. Associations should be prepared to provide an itemized break-down to support their fees. Reasonable expenses might include the following:
Copy costs for governing documents required by Civil Code §1368(a)(1),
Copy costs for the financial documents per §1365, as required by Civil Code §1368(a)(3),
Copy costs for preliminary list of construction defects provided to members Civil Code §1368(a)(6),
Copy costs for general description of defects the association believes will be corrected or replaced and an estimate of when the defects will be corrected per §1375.1, as required by Civil Code §1368(a)(7),
Copy costs for minutes,
Document delivery fees,
Cost to close out old files,
Cost to set up new files, including emergency information and/or security cards,
Cost of attorney litigation disclosure letter (if any),
Fee to change security systems (if any),
Fee to inspect the property and/or documents for rules violations Civil Code §1368(a)(4),
Fee to answer lender forms,
Fee to answer escrow forms, and
Fee to certify assessments per Civil Code §1368(a)(4).
Reasonable Approximation. It should be noted that it is probably not possible to establish an exact incremental cost for each element of the transfer fee as it applies to each person against whom the fee is levied. While it may be theoretically possible it is practically impossible. Accordingly, what is needed is a reasonably close relationship between each fee and the cost it is intended to offset. Once a reasonable average has been established that fee can be uniformly applied to all persons who move in and move out of the development.
Burden of Proof. Persons challenging the fee have the burden of proving that the challenged fee violates state law. (
Dey v. Continental Cent. Credit (2008) 170 Cal.App.4th 721, 727, citing
Berryman v. Merit Property Management, Inc. (2007) 152 Cal.App.4th 1544, 1560 ("It is [plaintiffs] burden to demonstrate why the collection fee is illegal, rather than defendants' burden “to justify that it is legal for it to charge a fee for [the] service.”).)