Denver Fresh

Notice anything different about buying a property in the Riverfront Park neighborhood rather than other Denver city center neighborhoods?  Perhaps the property transfer assessment fees?  The property transfer fees are a major concern for property owners and buyers in Denver’s Riverfront Park neighborhood.

The transfer assessment is tacked onto properties sold in Riverfront Park.  At the moment, the transfer fees are unique to Riverfront and have many questioning why it exists.  The assessment is paid when a property in Riverfront Park  is sold and is currently one-half of one percent (.5%)  of the fair market value of the property ($2,500 on a $500,000 loft).  The fee has gone up since it’s conception and does have the ability to continue to rise to a maximum of 1% of the sales price of a property.

The transfer fee is allowable because during the neighborhood’s conception all units for sale had a Notice of Levy of Real Estate Transfer Assessment recorded against each property by the Riverfront Park Association (a.k.a. HOA).  So each time real estate is sold the fee is to be paid.  It is customary that a buyer pay this fee and has brought many a buyer to consider other neighborhoods in greater Denver that do not have the additional assessment. 

The HOA, Riverfront Park Association, is using the funds for it’s Riverfront Park Community Foundation, a non-profit, tax-exempt organization.  The Foundation funds are used to support recreation, events, activities and education as determined by the Executive Board of Riverfront Park.

A positive benefit that was born from the transfer fee and established by The Foundation is PlatteForum.  PlatteForum is a charitable organization in Riverfront Park that is a center for underserved kids that promotes arts and education.  For additional information on click out their site at www.platteforum.org.

It’s a transfer fee that raises heads because it’s new to Denver.  Buyers haven’t seen it in other neighborhoods in Denver and find it hard to see the extra benfit the transfer fee adds to a purchase price.  When I show propety in the Riverfront area I have had clients that have no objection to it and others that have simply excluded the area as a neighborhood they want to live because the fee seemed ‘unfair’.

These private transfer fees are more common in California but are becoming wide spread across the US.  The transfer fees allow for a neighborhood to have the budget to grow and improve while the financial burden of these benefits aren’t entirely out of the developer’s pocket.   

As a resident subject to the transfer fees it’s important to have an idea of what and where the money is being spent.   Since the regulations of where the funds can be spent are outlined by the non-profit organization the regulations have had a tendency be loosely defined. 

Paying attention to what’s going on with the HOA fees and transfer fees is the due diligence of any homeowner.  Don’t be caught off guard at the closing table or when  assessment  fees get hiked up.