Real estate transfer fees: prohibition.

Existing law allows various fees to be included in the price of a residential real estate transfer. Existing law defines a "transfer fee" with respect to real property as a fee payment requirement imposed in any covenant, restriction, or condition contained in any deed, contract, security instrument, or other document affecting the transfer or sale of real property that requires a fee be paid upon transfer of the real property, with specified exceptions. This bill, on or after January 1, 2019, would prohibit the creation of a transfer fee, other than excepted transfer fee covenants, as defined. The bill would provide that any transfer fee created in violation of this prohibition is void as against public policy. Existing law, when a transfer fee is imposed upon real property on or after January 1, 2008, requires the person or entity imposing the transfer fee, as a condition of payment of the fee, to record a separate document meeting specified requirements. Existing law requires that document to contain, among other things, for private transfer fees created on or after February 8, 2011, absent a specified exception, a notice in at least 14-point boldface type disclosing certain information, including that federal housing agencies are prohibited from dealing in mortgages on properties encumbered by private transfer fee covenants that do not provide a direct benefit to real property encumbered, and that if a person purchases such a property that person may have difficulty obtaining financing. This bill would provide that excepted transfer fee covenants are not required to comply with the notice described above.