Capital contribution

A capital contribution is a one-time charge at closing, often dumped into reserves. A transfer fee pays the association to update its records — or, in some documents, is a profit-taking charge. States cap or ban the second kind. The closing statement has a line you didn't budget: "HOA capital contribution," "working-capital fee," "resale fee," "transfer fee," "start-up fee." Those words are not synonyms. One of them might be a legitimate new-owner deposit into reserves. Another might be illegal under your state's transfer-fee statute. California Civil Code section 4575, in an article literally titled "Transfer Fee": except as provided in section 4580, neither an association nor a community service organization or similar entity may impose or collect any assessment, penalty, or fee in connection with a transfer of title or any other interest except (a) an amount not to exceed the association's actual costs to change its records, and (b) an amount authorized by section 4530. That's a California prohibition on most resale/transfer add-ons. "Actual costs to change its records" is a records-update charge, not a month of dues dressed up as a contribution.

This is general information from an AI helper, not legal advice. Confirm it against your documents and your state's law. If a deadline or hearing is coming up, talk to a licensed lawyer.