What is capital contribution fee and who pays it in a real estate purchase?

A capital contribution fee is a one-time charge that may be assessed by a homeowners' association (HOA) or a condominium association during a real estate purchase. This fee typically helps cover the costs of maintaining common areas, amenities, or reserves for future repairs and improvements. Generally, the buyer of the property pays this fee at the time of closing, although it can sometimes be negotiated as part of the sale agreement.