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November 8, 2007

Move In - Move Out Fees - Are They Legal?

This question came in recently:

"Our board recently increased the move-in and move-out fees and the board will collect [more than $600] for every change of residents in a given unit. I question this fee as being out of line with California Civil Code requirements that fees not exceed the costs of that for which they are imposed. Is this legal?"

I get asked this question by clients and non-clients. Sometimes boards do this and really believe it is the best way to go, or claim the money is for repairs after residents (owners or tenants) move out. Some believe that tenants are the problems, and will not acknowledge that owner move-in move-outs can be just as difficult. If I ask about what repairs were needed as to the last move, or the one before that, or the one before that, I commonly get a blank look. In other words, boards cannot often identify damages that justify the fees. If a Board was challenged on them, I think there may be a need to justify them. If the CC&Rs have such a fee, it might be easier to defend, but boards who adopt these kind of fees in the rules can run into problems trying to enforce them. There are certainly cases where they are justified, such as a case where in a high rise, special security measures might need to be implemented that cost extra money for the Association. Perhaps special parking arrangements have to be made (such as in San Francisco) that result in extra costs. If there is a situation where there is an extra cost, the fee could be justified. Maybe there are extra administrative costs (but do they justify a $600 or $700 or more fee?

Now, what is a board to do about a situation where a tenant (or an owner for that matter?) damages common area when moving in or out? The answer would be found in the governing documents, and it might be in the form of a reimbursement assessment, an individual special assessment, or a damage assessment.

I would go for the "damage" reimbursement for the guilty parties, rather than a flat fee, unless there are extra costs that arise when tenants move in or move out, or have a fee for everyone if the extra costs apply to everyone.

Not all attorneys agree with me. But I think many do.

Posted by Beth Grimm at November 8, 2007 10:06 PM