Your Legal Questions Answered

The practice of charging transfer fees can be controversial, and the specific situation you've described does raise some questions. However, based on the information you've provided, it is important to note a few things:

First, as long as the HOA is following its established rules and bylaws, and those rules and bylaws are in accordance with state law, the HOA is likely operating within its legal rights. Colorado law does permit HOAs to impose transfer fees, and the amount and use of those fees are typically at the discretion of the HOA. In our experience, it is typical for HOAs to charge transfer fees, particularly with HOAs that have a lot of short and long term rentals among its properties.

Second, whether or not the transfer fe you describe is "deceptive" or "theft" would likely depend on how well the fees are disclosed to homeowners. If the fees are clearly disclosed and the homeowners have agreed to them (by buying into the community and accepting the HOA bylaws), it would be challenging to argue that the fees are deceptive.

That being said, it's important to understand that HOAs are governed by their members. If a significant number of homeowners feel that the transfer fees are unfair or excessive, they can work together to propose a change to the bylaws that would limit or eliminate the fees. This would typically involve a vote of the homeowners, and the specifics would depend on the bylaws of your particular HOA.

In your case, assuming that the HOA governing documents specifically do not prohibit the Board from establishing a transfer fee, a political solution will likely be your best one.