Sponsor seeks cap on new‑owner HOA fees to make entry housing more affordable

Delegate Kim Ross asked the Judicial Proceedings Committee to favorably report HB1506, a measure to cap initiation or capital‑contribution fees that some homeowners associations charge buyers at resale.

Ross said these fees are often assessed at closing, can be opaque in resale documents, and in some communities have no cap — creating a potential barrier to first‑time buyers. The bill excludes new developments and master‑planned communities, requires clearer disclosure of the fee in the resale package and, as amended in negotiations, caps the fee at no more than three times the association’s monthly assessment (sponsor said she would accept reverting to a stricter one‑month cap if the committee preferred).

Members asked whether the cap would impede legitimate reserve funding and whether the fee is commonly used to shore up mismanaged budgets. Ross and supporters said the bill encourages associations to fund reserves through monthly assessments or special assessments rather than surprising a buyer at closing. The Attorney General’s consumer division said in a recent letter it prefers the one‑month cap but supported the overall goal of limiting excessive fees.

The committee heard questions about the frequency of unreasonable fees and whether additional exceptions are needed for extraordinary circumstances; the sponsor said stakeholders had negotiated the compromise text and that she would consider further adjustments.