The association Covenants or Bylaws dictate what amounts will be collected when a home is sold, and homeowner liability for ongoing association assessments (dues). Working capital contributions (also known as Capital Contribution) are generally used to replenish the association’s reserves and may be used for improvements within the association or to maintain common area structures.
These amounts vary by association and are most commonly collected from the first buyer of a new home in a developing community.
Ask your Closing attorney if you have questions about any charges on your HUD statement, including working capital or other fees.