PROPOSED AMENDMENT TO COVENANTS: A BUYER TRANSFER FEE
The Challenge:
We have historically relied upon “Developer Transfer Fees” from new construction to help fund our Reserve Accounts. With each property developed, the developer has paid a fee set forth in our Covenants. This significant revenue source, combined with leadership from previous Boards of Directors has allowed WPOA to avoid “Special Assessments”. As Wintergreen has passed 50 years old, with new development, including Crawfords Place, nearing completion, this critical revenue stream is diminishing. We are nearing full buildout, causing a loss of funding from Developer Transfer Fees. These fees have historically funded our Reserve Accounts.
The Options:
1. We could replace lost revenue from dwindling Developer Transfer Fees with implementation of a Buyer Transfer Fee.
2. Increase annual assessments until we reach our reserve funding needs. Current estimates suggest an additional 3% increase for several years.
Reserve Accounts vs. Operating Accounts
Reserve Accounts: We rely on our Reserve Accounts to budget long term to repair our roads and buildings (such as our fire/rescue and police stations), amenities (such as ponds and pools), and heavy equipment, plus any major catastrophic storm events, without the need to levy large special assessments when needs arise. With the Reserve Accounts, we plan ahead, budgeting for such expenses and building reserves steadily over the long run.
Operating Account: Our annual operating fund pays our operating expenses for the year. We rely on the annual assessments you pay to fund these operating expenses. Our Operating Account pays salaries and benefits for paramedics/firefighters, police, and road maintenance crews, routine maintenance of buildings and equipment, and for fuel and supplies. These requirements equate to an estimated annual assessment increase of 5%.
As Developer Transfer Fee payments diminish, and in order to fund our Reserve Accounts, we either need to increase annual assessments by another 3% above the estimated 5% increase for several years, or we can replace our lost Developer Transfer Fee payments with a new Buyer Transfer Fee.
A New Funding Philosophy, A Buyer Transfer Fee: This covenant amendment would allow WPOA to collect a one-time Buyer Transfer Fee upon sale of a property equal to that current year’s annual developed lot assessment, currently $2,279 for 2026. This fee is strategically designed to shift the burden of funding reserves from existing owners to a one-time fee for new buyers. At settlement, new owners would contribute a one-time fee equal to the current annual improved lot assessment. This ensures that those joining our community contribute directly to the long-term infrastructure they will enjoy. Funds collected would be placed in the Reserve Accounts to be used for long-term capital expenses, thereby helping protect the community’s infrastructure while reducing future annual assessment increases.
Other communities have adopted this model. Many similar resort communities collect a buyer transfer fee at closing. These vary widely and can be a percentage of the sales price or a flat fee. All are designed to help fund capital reserves. A few of these communities and their fees include: