Private Transfer Fee (Sellers Real Property Disclosure Form)

***UPDATE*** on March 15, 2012, the Federal Govt. /Washington, DC – The Federal Housing Finance Agency (FHFA) has sent a final rule to the Federal Register on private transfer fees. The final rule limits Fannie Mae, Freddie Mac and the Federal Home Loan Banks from dealing in mortgages on properties encumbered by certain types of private transfer fee covenants and in certain related securities. Transfer fees are contractual arrangements where an owner pays a fixed amount or a percentage of the sales price at the time of transferring the property. ###

 

Private Transfer Fee (Sellers Real Property Disclosure Form)

Question #15 on the Nevada Seller’s Real Property Disclosure Form(SRPD)- “This property is subject to a Private Transfer Fee Obligation?”

What is a Private Transfer Fee?  It is an encumbrance on the property, which shows up like a mortgage deed.  It is a recurring fee paid back to the Seller, every time a sale occurs, in exchange for clear title.  The Seller maintains a financial interest in the property for decades after it’s been sold, not with a mortgage or a loan but with a private transfer fee.

As of May 2011, in Nevada they are not legal.  Per Nevada Assembly Bill 271

http://www.leg.state.nv.us/Session/76th2011/Bills/AB/AB271_EN.pdf

Nevada joined with more than half of the rest of the Country in banning private transfer fees on real estate– AB 271 makes all new private transfer fee obligations “void and unenforceable.”

If you have an “existing Private Transfer Fee” it remain legal, but the beneficiaries of currently recorded private transfer fee covenants are subjected to new recording and notice requirements to preserve their interest, including civil penalties for creation of new private transfer fee obligations or failure to comply with the recording requirements.

Question 15 of the Nevada Sellers Real Property Disclosure Statement (SRPD) asks if, “This property is subject to a Private Transfer Fee Obligation?”

Thus per the new SRPD, sellers of properties in Nevada with existing private transfer fee obligations must disclose this encumbrance.

This is a series of Disclosure Entries see also:

Nevada Disclosure In Residential Sales

An Updated All Inclusive & Belt Way Disclosure

The New, Improved All Inclusive Disclosure

Nevada Condominium Hotel Disclosure

Nevada S.R.P.D. New Clarification of Real Estate Disclosure  Laws in Nevada

Any questions, you can call me Darren Welsh 702 245 1787.