Sea Pines residents consider transfer fees

Sea Pines could join a growing trend in other local communities and add a fee to a home's purchase price to help raise money to maintain aging infrastructure.

If the fee is approved by property owners this summer, Sea Pines would become the area's largest gated community to adopt a transfer fee. The fee would raise money for roads, bridges, maintenance equipment and other things to make sure the 52-year-old community stays up-to-date and competitive.

Property owners in Hilton Head Plantation, Indigo Run and Shipyard Plantation have overwhelmingly voted for similar fees over the last two years.

In Sea Pines, voters are being asked to approve adding a .25 percent charge, based on the sales price, to every real estate property sale or transfer, private or commercial.

Sea Pines is taking a different approach to its goal for raising $8 million for its reserve fund by also proposing a temporary, 10 percent annual assessment surcharge for existing property owners. The surcharge would be $88 for each developed residential property, and will expire in seven years or when the $8 million goal is reached, Sea Pines said.

"The board just felt there was a shared responsibility in this," said Cary Kelley, executive vice president of Community Services Associates, the group that oversees common properties, security and maintenance. "The existing owners have a responsibility to help get that reserve balance up to where it should be."

The transfer fee issue has so far attracted wide support in Sea Pines, officials said, though real estate agents across the island remain wary of adding more obstacles to selling property in what is already a worrisome market slump.

"I think it's the most detrimental thing they can do," said Linda Palmer, president of the Hilton Head Island Area Association of Realtors. Palmer said transfer fees have become problematic for some homeowners because the charge ends up factoring into negotiations with potential buyers, who often expect the seller to absorb the cost.

"Sellers are fooling themselves if they think buyers are going to take on this responsibility," she said.

But Sea Pines' approach of including a surcharge that existing homeowners would pay is better than relying exclusively on money from transfer fees, she said.

"I don't deny that its a necessary fund," she said. "I think people do have expectations when they do move into Sea Pines that their amenities will be kept up to standards."

Property owners understand the concerns about the real estate market, but also see the benefit in having enough money in the bank, said John Griffin, a member and former president of the Baynard Park Property Owners Association.

"I think it's more important to rebuild the reserve fund, to be prepared for an emergency," Griffin said. "Hopefully it will increase sales as people realize there's money available."

Since other communities in the area already have similar fees, Sea Pines was able to study whether the charge had an impact on real estate sales. So far, no major effects have been noticed, Kelley

said.

"The indications not only locally but nationally in communities that have done this is there is no impact," he said.

Ballots were mailed to property owners Friday and must be postmarked no later than June 30. For the referendum to pass, 75 percent of ballots must be in favor of the fee. Voting results are expected to be released in July.