Texas Expected to Ban Real Estate Transfer Fees

Reblogger Tom Branch
Real Estate Agent with RE/MAX Dallas Suburbs TX Broker 0513551

This is actually good news for Texas homeowners. It really wasn't just HOAs that were adding fees to the CC&Rs, some sellers figured out how to do it as well.

Tom

Original content by Mike Wong 0576394

The Texas House and Senate have overwhelmingly voted for a bill that would ban private transfer fees on real estate. The new legislation bans new private transfer fees. Developers who have existing fees on properties must file a notice of the obligation in county property records by Jan. 31, 2012, and update it every three years, or the transfer fee is void. Homeowner and property owner associations are not affected by the private transfer fee bill.

These private transfer fees are written into neighborhood deed restrictions typically cost 1 percent of the home's sale price. This transfer fee goes back to the original developer each time the home changes hands over the next 99 years.

Texas is expected to soon join 33 other states that have banned or restricted private transfer fees. Private transfer fees have not been common in Texas, but they have been marketed to developers as a way to create an income stream in a down market. One Fort Bend neighborhood with a private transfer fee is the master planned community of Sienna Plantation.

Many home owners and buyers are unaware of a private transfer fee until they sell the home. Transfer fees are typically revealed in title searches, but few people read all the neighborhood covenants, restrictions, and title before signing. Home buyers agree to accept any common neighborhood restrictions according to a standard real estate contract in Texas.

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Rainmaker
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Tim Bradley
Contour Investment Properties - Jackson Hole, WY
Commercial Real Estate Expert in Jackson Hole, WY

A couple of new subdivisions here in Jackson Hole have considered tacking a real estate transfer fee on the home sale. The fee would not go to the original developer, but would have been given to the local Housing Trust for the development of new deed restricted affordable homes. The backlash was too big, and the idea failed.

May 28, 2011 04:07 AM #1
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