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. In fact, several buyers using NestApple asked us what exactly a capital contribution fee in NYC means. Sometimes, people also call this “capital contribution fee” an “HOA capital contribution fee”.
A “capital contribution” remains a one-time charge normally associated with the transfer of title on a property. It remains part of a condo or homeowners association. The buyer or the seller normally pays the capital contribution fee at settlement to the association. Therefore, this contribution gets usually deposited into the capital reserves to fund future maintenance items. In fact, this fee varies by building and either the buyer or seller can pay for it.
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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