Is an HOA required to record a notice of transfer fees if the transfer fee charged is equal to the costs incurred by the HOA to update its records?

Facts: A buyer purchased a home in a common interest development (CID) managed by a homeowners’ association (HOA). In the purchase agreement for the property, the buyer agreed to pay all HOA transfer fees. The HOA charged the buyer a transfer fee equal to the costs incurred by the HOA in updating its records.

Claim: The buyer sought to prevent the HOA from collecting the transfer fee, claiming the HOA was not permitted to collect the transfer fee since it did not record a notice of transfer fees with the county recorder.

Counterclaim: The HOA sought to collect the transfer fee, claiming the HOA was not required to record a notice of transfer fees with the county recorder since recording a notice is only required if the fee exceeds the HOA’s actual costs incurred  to process the transfer of ownership within the CID.

Holding: A California court of appeals held the HOA may collect the transfer fee since the HOA is only required to record a notice if the transfer fee exceeds the HOA’s cost of updating its records and processing the change of ownership. [Fowler v. M&C Association Management Services, Inc. (2013) __ CA4th__]