Bill prohibiting Third-Party transfer fee schemes on Governor Brewer’s desk
In 2008 Voters passed a constitutional amendment by a margin of 77% to 22% to prohibit the state, county or city from charging a transfer fee on the sale of a home. Unfortunately, the ballot measure did not include a prohibition on private transfer fees. Now a new property transfer fee scheme has arisen in which a third-party company enters into an agreement with a developer to record a permanent covenant and lien on each home built. Subsequently, each time that home is sold – for as long as 99 years – a percentage of the sales price is diverted back to the developer and the third-party company. This happens even though the developer and third-party company don’t own the property and don’t pay any portion of the mortgage, remodeling costs or other improvement expenses. This is an abuse of the CC&Rs that are commonly recorded on residential property, an abuse that takes a home seller’s sales proceeds and provides nothing to the homeowner in return except increases in cost. This scheme is a risk-free effort for everyone – except the homeowner.
HB 2768 prohibits this third-party transfer fee scheme from continuing in our state. It has passed both the House and the Senate and awaits Governor Brewer’s signature into law.
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Sean, we don’t currently have any online seminars/webinars available on the subject but we are working on some materials that will be out later this year. We’ll add you to our mailing list and let you know when it is available.
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