NEWS

Fri, May 21

Minnesota REALTORS call for ban on Private Transfer Fees

The Minnesota Association of REALTORS and other leading real estate groups are calling on Governor Tim Pawlenty to sign the Transfer Fee Covenant Act that would ban so called “private covenant transfer fees” in home-purchase contracts.

Supporters say the legislation is a pre-emptive strike against a new rash of private covenant transfer fees popping up in real estate sales in Texas, California, Ohio and South Dakota. Under the private transfer fee practice, the seller or buyer of the property is contractually required to pay a fee 1 percent of the price of a home to the original corporate owner (E.g., the developer) of a property before the land can be legally transferred.

This fee is collected every time the property is sold for the next 99 years.

If Pawlenty signs the bill, Minnesota would join 10 states, including Arizona, that have already restricted the use of such fees.

SEND THIS PAGE TO A FRIEND