Most of the money an HOA collects is the regular assessment set by the annual budget. The rest of it, the capital contribution at closing, the transfer fee, the estoppel fee, the fine, the late charge, sits on a different footing, and each one needs a source. Florida law gives an HOA no general power to invent a charge. Section 720.301(1) defines an assessment as a sum payable to the association by owners as authorized in the governing documents. Authorized in the governing documents is the whole test.
Every charge has to be traced to the declaration
Section 720.301(1) defines "assessment" or "amenity fee" as money payable to the association, to the developer or other owner of common areas, or to recreational facilities and other properties serving the parcels, by the owners of one or more parcels, as authorized in the governing documents, which if not paid can result in a lien against the parcel. Two things follow, and they carry most of the analysis here.
First, authority runs from the documents, not from the board. Section 720.301(8) defines the governing documents as the recorded declaration and its recorded amendments, supplements and exhibits, along with the articles, bylaws and duly adopted rules. A board resolution setting a new fee is no source of authority, and neither is a management company's fee schedule or long practice.
Second, the definition ties the charge to the lien. An authorized assessment can result in a lien; a charge that is not an authorized assessment cannot. Section 720.3085(1) says the same thing from the other direction: when authorized by the governing documents, the association has a lien on each parcel to secure payment of assessments and other amounts provided for by that section.
For communities created after October 1, 1995, section 720.308(1) adds that the governing documents must describe how expenses are shared and specify the member's proportional share, and that assessments under the annual budget or a special assessment must be in that share. Shares may differ among classes of parcels, but the classes and the shares have to be in the documents. Start every question here by opening the declaration. The order of authority between statute, declaration and board rule is covered in our overview of how Chapter 720 governs your association.
Capital contributions and working capital fees at closing
A capital contribution, sometimes called a working capital or initial contribution, is a one-time payment collected from a buyer at closing and kept by the association rather than credited against assessments. Many Southwest Florida declarations authorize one, often at a multiple of the monthly assessment or a percentage of the sale price. Many do not.
Chapter 720 neither creates the charge nor regulates it. The phrase appears only in the developer guarantee provisions, sections 720.308(4)(b) and 720.308(6), and there it is a restriction rather than a grant: any portion of the parcel assessment budgeted for designated capital contributions may not be used to pay operating expenses. That governs spending the money if it exists, not collecting it.
So the question is narrow. Does the recorded declaration authorize a contribution payable on transfer of title? If it does, read the terms: who pays, how it is calculated, when it is due, whether it is refundable, and what the association may spend it on. If it does not, there is no authority to collect one.
The consequence of getting this wrong is not only that future collections stop. Money collected without authority is money the association holds without a right to it, and an owner who paid can ask for it back. Because these are collected one closing at a time over many years, the exposure compounds quietly. If the board wants a contribution the declaration does not provide for, that is a declaration amendment under section 720.306(1)(b), not a rules project and not a budget line.
Transfer and screening fees: Chapter 720 does not cap them because it does not allow them
Boards often ask what the statutory cap is on an HOA transfer fee or tenant screening fee. There is no cap, for a reason that surprises people: Chapter 720 contains no transfer fee provision at all. There is no HOA analogue to section 718.112(2)(k), which lets a condominium association charge a transfer or lease approval fee only where the documents require approval and authorize the fee, caps it at $150 per applicant, treats spouses and dependent children as one applicant, forbids a charge on a renewal with the same lessee, and adjusts the cap every five years.
The absence of a cap is not freedom. It means the question is governed entirely by the declaration. If the declaration gives the association the right to approve a transfer or a lease and authorizes a fee for it, the association may charge what the declaration authorizes. If the declaration is silent, there is no approval right and no fee.
One related statute is worth knowing. Section 689.28 voids most private transfer fee covenants recorded after July 1, 2008 as a clog on title, and expressly excludes from the definition of a transfer fee any charge payable to a homeowners', condominium, cooperative, mobile home or property owners' association pursuant to a declaration or covenant, including estoppel letters and certificates. Read that exclusion carefully: it protects association charges that are in the declaration and does nothing for a charge the board invented.
Estoppel certificate fees, the one charge Chapter 720 does cap
Section 720.30851 is the exception. It requires the association to issue an estoppel certificate within 10 business days after a written or electronic request from a parcel owner or the owner's designee, and it sets the fees.
| Item | Cap under § 720.30851 |
|---|---|
| Certificate, no delinquency | $250 |
| Expedited, delivered within 3 business days | $100 additional |
| Parcel is delinquent on the date of issuance | $150 additional |
| Multiple parcels, 25 or fewer | $750 in the aggregate |
| Multiple parcels, 26 to 50 | $1,000 in the aggregate |
| Multiple parcels, 51 to 100 | $1,500 in the aggregate |
| Multiple parcels, more than 100 | $2,500 in the aggregate |
| Certificate not delivered within 10 business days | No fee may be charged |
Two mechanical points cause most disputes. The certificate has an effective period: 30 days if hand delivered or sent electronically, 35 days by regular mail. And the fees adjust every five years by the change in the Consumer Price Index for All Urban Consumers, so a schedule printed years ago may be wrong in either direction. The late-delivery rule has teeth as well: miss the 10 business days and no fee may be charged for preparation and delivery at all.
Fines are a charge, but a different kind of charge
A fine levied under section 720.305(2) is money owed to the association, but it does not behave like an assessment. Three differences matter to the accounting.
- It is capped. A fine may not exceed $100 per violation, and a daily fine for a continuing violation may not exceed $1,000 in the aggregate, unless the governing documents provide otherwise.
- Most fines cannot be liened. Section 720.305(2) states that a fine of less than $1,000 may not become a lien against a parcel. A $500 fine is a debt the association may sue on. It does not belong in a claim of lien for assessments.
- It requires process first. A fine is not owed until the board levies it, the owner gets at least 14 days' written notice of the right to a hearing, and a qualifying committee confirms it. The mechanics are in our guide to the section 720.305(2) fining committee.
Section 720.3085(3)(b) adds a point that is easy to miss: an administrative late fee is not a fine. It does not go through the fining committee, and the two are treated differently in the payment application order below. Keep fines in a separate column from assessments and late fees, so a claim of lien, a payoff figure or an estoppel certificate can be produced without untangling one commingled balance.
What the lien secures, and what stays outside it
Section 720.3085(1) gives the association a lien on each parcel, when authorized by the governing documents, to secure payment of assessments and other amounts provided for by that section. It relates back to the recording of the original declaration, except as to first mortgages of record, where it is effective only from the recording of a claim of lien. Section 720.3085(1)(a) says a recorded claim of lien secures unpaid assessments due and accruing after it is recorded and before entry of a certificate of title, plus interest, late charges, and reasonable costs and attorney fees incurred incident to collection.
| Charge | Secured by the § 720.3085 lien? |
|---|---|
| Regular and special assessments authorized by the declaration | Yes, where the documents authorize the lien |
| Interest and administrative late fees on those assessments | Yes, under § 720.3085(1)(a) |
| Reasonable collection costs and attorney fees incident to collection | Yes, subject to the § 720.3085(3)(d) late-assessment notice |
| A fine of less than $1,000 | No. § 720.305(2) prohibits it |
| A capital contribution or transfer fee the declaration does not authorize | No. There is no assessment to secure |
| Estoppel certificate fees | A charge to the requesting party under § 720.30851, not an assessment lien item |
Collection has its own sequence, and each step has a statutory notice form: a notice of late assessment giving 30 days before attorney fees may be charged under section 720.3085(3)(d), a 45-day notice of intent before a claim of lien may be recorded under section 720.3085(4), and a further 45-day notice before foreclosure under section 720.3085(5). We cover the sequence in our discussion of an association collection policy.
Interest, late fees and the order payments are applied
Unpaid assessments bear interest from the due date at the rate stated in the declaration or bylaws, which may not exceed the rate allowed by law. If no rate is stated, simple interest accrues at 18 percent per year, and compound interest may not accrue whatever the documents say. Section 720.3085(3)(a) allows an administrative late fee, but only if the declaration or bylaws so provide, and it may not exceed the greater of $25 or 5 percent of each installment paid past the due date.
Section 720.3085(3)(b) sets the order in which a payment is applied, in terms that override an owner's attempt to direct it. Any payment received and accepted goes first to accrued interest, then to any administrative late fee, then to costs and reasonable attorney fees incurred in collection, then to the delinquent assessment. That holds notwithstanding any restrictive endorsement, designation or instruction, and notwithstanding section 673.3111 or any purported accord and satisfaction. An owner cannot write "payment in full" on a short check and reset the balance.
One more charge is worth stating because owners ask. Section 720.303(5) lets the association charge up to 25 cents per page for copies of official records on its own photocopier, or the actual vendor cost for outside copying. Personnel costs may be charged only where retrieval and copying exceed half an hour, are capped at $20 per hour, and are never chargeable for a request of 25 or fewer pages. Those limits sit with the access rules in our page on HOA official records requirements.
Why an unauthorized fee is worse than no fee
An unauthorized charge fails in four directions at once, and boards usually discover all four in the same week. The last of them is specific to Chapter 720 and worth reading twice.
- It is not collectible. Section 720.301(1) conditions an assessment on authorization in the governing documents. No authorization, no obligation to pay.
- It cannot be liened. Section 720.3085(1) gives the lien only when the governing documents authorize it and only for amounts provided for in that section. A lien including an unauthorized charge overstates the amount due.
- It creates refund exposure. Every owner who paid has a claim to get it back, and where a capital contribution was collected at each closing that reaches back through many years and many parcels.
- It carries a fee-shifting risk. Section 720.305(1) gives the prevailing party in an action between the association and a member reasonable attorney's fees and costs, and a prevailing member may also recover an amount the court determines will reimburse his share of the assessments levied to fund the association's litigation expenses.
The review that avoids all of this is short. List every charge the association bills that is not the regular assessment or a properly adopted special assessment. For each, identify the article of the recorded declaration that authorizes it, the amount or formula it sets, and who owes it. Anything that cannot be traced should be stopped and referred to counsel, because whether to refund is a separate decision from whether to keep charging.
Frequently Asked Questions About HOA Capital Contributions and Owner Charges
Can our HOA charge a capital contribution at closing?
Only if the recorded declaration authorizes it. Chapter 720 does not create the charge. The only mention of capital contributions in the chapter is in the developer guarantee provisions at sections 720.308(4)(b) and 720.308(6), and that language restricts how such money may be spent rather than authorizing its collection.
What is the cap on an HOA transfer fee in Florida?
There is none, because Chapter 720 has no transfer fee provision. The $150 per applicant cap people have in mind is section 718.112(2)(k), which applies to condominium associations. For an HOA, whether a fee may be charged at all, and how much, depends entirely on the recorded declaration.
How much can we charge for an estoppel certificate?
Section 720.30851 caps the fee at $250 where no delinquent amounts are owed on the date of issuance, plus $100 for expedited delivery within three business days and $150 more where the parcel is delinquent. Aggregate caps apply for multiple parcels, from $750 for 25 or fewer up to $2,500 for more than 100.
What happens if we deliver an estoppel certificate late?
You may not charge for it. Section 720.30851 requires delivery within 10 business days after a written or electronic request, and provides that if the association fails to deliver within that period, a fee may not be charged for the preparation and delivery of the certificate.
Can we put a fine in our claim of lien?
Not if it is under $1,000. Section 720.305(2) provides that a fine of less than $1,000 may not become a lien against a parcel. Including one in a claim of lien for assessments overstates the secured amount and gives the owner a defect to argue in a foreclosure or a contest of lien.
An owner wrote 'paid in full' on a check for less than the balance. Does that settle the account?
No. Section 720.3085(3)(b) applies any payment received and accepted first to interest, then to the administrative late fee, then to collection costs and attorney fees, then to the delinquent assessment, and says so notwithstanding any restrictive endorsement, designation or instruction, notwithstanding section 673.3111 and any purported accord and satisfaction.
What is the most the association can charge for copies of records?
Up to 25 cents per page on the association's own photocopier, or the actual vendor cost supported by invoice for outside copying, under section 720.303(5). Personnel costs may be charged only where retrieval and copying exceed half an hour, are capped at $20 per hour, and may not be charged at all where the request results in 25 or fewer pages.
We have been charging a fee the declaration does not mention. What should we do?
Stop billing it and get counsel involved before the next closing. The charge is not collectible, it cannot be secured by the lien, and owners who already paid have a refund claim. Whether and how to refund is a separate decision from stopping the charge, and section 720.305(1) fee-shifting makes it a decision worth making deliberately.
Contact Hamilton Mikes
Hamilton Mikes reviews HOA fee schedules, capital contribution and transfer fee provisions, estoppel practices and collection ledgers against the recorded documents and Chapter 720, and handles the amendment work when a community needs authority it does not have. Call 239-594-7227 or visit our Assessment Collection page.
Statutes and authorities referenced
- § 720.301(1), Fla. Stat. (definition of assessment or amenity fee; payable as authorized in the governing documents; may result in a lien)
- § 720.301(4), (8), Fla. Stat. (definitions of declaration of covenants and governing documents)
- § 720.303(5), Fla. Stat. (records inspection and copying charges; 25 cents per page; $20 per hour personnel cost; no personnel charge for 25 or fewer pages)
- § 720.305(1), Fla. Stat. (prevailing party attorney's fees; a prevailing member may also recover his share of assessments levied to fund the association's litigation expenses)
- § 720.305(2), Fla. Stat. ($100 per violation; $1,000 aggregate; fine of less than $1,000 may not become a lien)
- § 720.306(1)(b), Fla. Stat. (amendment of governing documents)
- § 720.308(1), Fla. Stat. (communities created after October 1, 1995 must describe expense sharing and each member's proportional share; assessments in proportional share)
- § 720.308(4)(b), § 720.308(6), Fla. Stat. (assessment amounts budgeted for designated capital contributions may not be used to pay operating expenses)
- § 720.3085(1), Fla. Stat. (lien when authorized by the governing documents; relation back; first mortgages)
- § 720.3085(1)(a), Fla. Stat. (what a recorded claim of lien secures)
- § 720.3085(3), Fla. Stat. (interest at the documented rate or 18 percent simple; no compound interest)
- § 720.3085(3)(a), Fla. Stat. (administrative late fee, greater of $25 or 5 percent of the installment, if the documents so provide)
- § 720.3085(3)(b), Fla. Stat. (order of application of payments; late fee is not a fine; restrictive endorsements ineffective; § 673.3111)
- § 720.3085(3)(d), Fla. Stat. (notice of late assessment required before charging attorney fees; 30 days)
- § 720.3085(4), (5), Fla. Stat. (45-day notice of intent to record a claim of lien; 45-day notice of intent to foreclose)
- § 720.30851, Fla. Stat. (estoppel certificates; 10 business days; $250 / $100 expedited / $150 delinquent; aggregate caps of $750, $1,000, $1,500 and $2,500; 30-day and 35-day effective periods; no fee if late; 5-year CPI adjustment)
- § 718.112(2)(k), Fla. Stat. (condominium transfer fee capped at $150 per applicant — cited for contrast; there is no Chapter 720 equivalent)
- § 689.28, Fla. Stat. (transfer fee covenants void; exclusion for charges payable to an association pursuant to a declaration or covenant, including estoppel certificates)
- § 673.3111, Fla. Stat. (accord and satisfaction by use of an instrument)