Since the fee was on a closing document, it is not a rental expense. HOA fees are usually paid monthly and would be a rental expense, as long as the property was business use.
It's odd that they charged you the other fee at closing and not prorated throughout the year. It would have been a legitimate rental expense like the HOA was since you needed to pay it to produce the income.
Unfortunately, seller closing costs do not include HOA or social fees.
Seller closing costs are made up of several expenses. Here’s a quick breakdown of potential costs and fees:
- Agent commission
- Transfer tax
- Title insurance
- Escrow and closing fees
- Prorated property taxes
- Credits toward closing costs
- Attorney’s fees
