What is Transfer Fee?

Transfer fees are distinct from capital contributions, though both are collected at closing and often confused. A transfer fee compensates the manager for processing the ownership change; a capital contribution (sometimes called a working capital or initiation fee) is a payment into the association's reserves or operating fund from the incoming owner.

Both must be authorized somewhere — the governing documents, the management agreement, or state statute. Many states cap transfer fees or require them to be disclosed in the resale package.

Buyers should confirm the exact amounts in the estoppel certificate before closing; surprise four-figure capital contributions are a common last-minute closing dispute.