Concern Over Resale Fee

Concern Over Resale Fee

A resale fee added to the draft RA governing documents draws the ire of some Restonians.

“In the last eight years, I would have paid $750 in resale fees,” said Kathy Joyner, who has moved three times within Reston in the 11 years she’s lived here.

Joyner is referring to a prospective clause that was added to the working draft of the Reston Association (RA) governing documents, which govern the homeowner’s association.

Last updated in 1984, the governing documents are again being reviewed by the RA Board for clarification and simplification. RA has been working on this revision process for more than a year. Bob Diamond, the attorney hired to help revise the governing documents and provide the working draft, completed it about three months ago. In it, Diamond included the resale fee clause, which would charge $250 to any person who buys a home within the RA deed, not to include new houses or condominiums.

“This is something that I suggested putting into the documents,” said Diamond of ReedSmith LLP. “In many new, larger-scale communities in other parts of the country, [a resale fee] is becoming a more common provision to enhance life and provide the community with additional revenue.

“It may or may not be something that is in the final draft of the documents,” said Diamond, who also said that a lot of associations have this type of provision.

IT IS KNOWN that these fees could generate a large amount of money — about 5 percent of the current RA budget. Ray Leonhard, RA’s chief financial officer, estimated that the fee would increase revenue by $500,000 based on an annual home turnover of 2,000 in Reston. In 2004 home turnover was just less than 2,500, and in 2003 it was at 2,300.

In a working session April 21, the Board expressed approval for including the new fee, however, it could not decide the amount to charge or whether the fee would go to a charitable foundation that supports RA or directly to RA. As it was written in the draft, a charity benefiting RA, which many people speculated would be the Friends of Reston, would collect a resale fee of $250 on sales of existing homes. Diamond said that the rationale for sending the fee to a nonprofit is that it makes the fee tax deductible.

At that same meeting, members of the Board suggested that the RA would be better off collecting the fee. Sending it to a nonprofit would diminish RA’s control over how the money was spent.

Some members of the community, including Joyner, had a problem with the arrangement as written in the draft. In a letter to the editor two weeks ago, Joyner said, “It seems unthinkable that the RA would commission a foundation with the determination of which improvements would receive these monies.”

“It’s forcing people to make a charitable contribution,” she said in a telephone interview.

MARINA MATTHES of Reston also had problems with the arrangement. “That was nonsense,” Matthes said of having the fee go to a foundation. “The association is not in the business of raising money for charity.”

But these same Reston residents also have a problem with the lack of explanation for the fee in the first place.

“I think Reston is a wonderful place to live. It has great amenities and it has to find ways to pay for them,” said Matthes, a 10-year resident of Reston. “The concern that I have with this fee is that it seems that it is not being done aboveboard,” said Matthes.

“There has been no explanation of why they need the money,” she said.

“I still have a problem with that $250 fee,” said Joyner. “It just seems like an easy way for the RA to raise money.

“The people we’d be charging wouldn’t even be here to vote on the issue,” Joyner said.

Regarding the insertion of this fee into the draft document, Diamond said, “That’s the only way to get feedback for these things.”