Bill No.: HB0025                     Drafter:  LGC

LSO No.:   12LSO-0183                 Effective Date:  July 1, 2012

Enrolled Act No.:    HEA0043

Chapter No.:         CH0088

Prime Sponsor:       Representative Stubson

Catch Title:         Private transfer fee obligations.

Subject:             Limitations on private transfer fee obligations.

Summary/Major Elements:

· Private transfer fee obligations are obligations arising under a declaration or covenant affecting real property that requires the payment of a fee upon the subsequent transfer of the property.  The act defines various fees which are not private transfer fee obligations, notably including consideration payable upon a subsequent transfer of property based on any subsequent appreciation, development or sale of a separate mineral estate.

· This act requires the payee of a private transfer fee created prior to April 1, 2012, to record a notice in the county clerk’s office where the property is located.  The act provides that a court will not have jurisdiction to enforce any private transfer fee obligation entered prior to April 1, 2012, which is not recorded as required. 

· This recording requirement also applies to any fee, charge, assessment, fine or other amount payable to a homeowners’, condominium, cooperative, mobile home or property owners’ association or to a nonprofit land trust pursuant to a declaration or covenant or law applicable to the association or nonprofit land trust.  However, the prohibition on jurisdiction to enforce this type of fee would not apply.

· This act prohibits private transfer fee obligations entered into after April 1, 2012, and before July 1, 2014.

Comments:

· Contains delayed effective/repeal date:  Private transfer fee obligations will no longer be prohibited after July 1, 2014.