Featuring real estate articles and information to help real estate buyers and sellers. The Nest features writings from Georges Benoliel and other real estate professionals. Georges is the Co-Founder of NestApple and has been working as an active real estate investor for over a decade.
I decided to write a quick blog post on this concept after we saw this new term emerging from New Construction jargon. Several buyers using NestApple asked us what exactly is a capital contribution fee, also called “HOA capital contribution fee”
A “capital contribution” is a one-time charge normally associated with the transfer of title on a property. It can be part of a condo or homeowners association. It is normally paid at settlement to the association and is usually deposited into the capital reserves to fund future maintenance items. This fee varies by building and can be paid by either the buyer or seller.
In a new development, this fee is listed as closing costs for the buyer; it typically represents a few months’ worth of the apartment’s common charges. Some developers sometimes charge buyers two separate capital contribution fees.
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