Coldwell Banker La Mansion Real Estate News Bit for 5-12-2012

quoted from Coldwell Banker La Mansion Real Estate News Bit for 5-12-2012

House OKs limiton transfer fees, Developers wouldn't get long-term cuts on property sales.The Texas House has approved a bill that would rein in private transfer fees on real estate.Such fees, written into neighborhood restrictions, typically encumber the property for 99 years and throw 1 percent of the sale price back to the original developer each time the home changes hands.The legislation would prohibit such fees. They aren't common in Texas, but have been marketed to developers as a way to finance projects in a down market.The bill also would require sellers of properties already encumbered by a transfer fee to disclose it in the sales contract.The bill is pending in the Senate Business and Commerce Committee. Trent Thomas, chief of staff for state Rep. Drew Darby, R-San Angelo, one of the Texas bill's sponsors, expects the Senate committee to take action and move the bill to the full Senate as early as today.Under current law, it's possible that a homeowner could have a transfer fee in a neighborhood covenant and not realize it until he or she resells a home. In the standard real estate contract in Texas, home buyers agree to accept any restrictions that are common to the subdivision. And even if a transfer fee were to turn up in a title search, few people read all the neighborhood covenants and restrictions before signing.“This is something that does not give the consumer any benefit,” said San Antonio real estate broker Dwight Hale, chairman of the Texas Association of Realtors, which has lobbied to eliminate private transfer fees. “It is about someone lining their pockets.”Freehold Capital Partners, a company started in Texas and later moved to New York, has been selling developers across the country on a plan that would attach a private transfer fee to homes.Freehold hopes to create a secondary market so developers can sell the rights to transfer fees to investors.The idea is that developers would get money upfront from investors, who would get a 99-year income stream.Freehold's lobbyist, Jay Propes of the Graydon Group in Austin, said he didn't want to comment on the pending legislation other than to say the company is opposed to a provision that would void transfer fee obligations if they did not comply with federal or state agency mortgage loan guidelines.“All we believe is that the law shouldn't be retroactive,” Propes said.The Federal Housing Finance Agency has proposed a rules change that would bar Fannie Mae and Freddie Mac from guaranteeing loans with any transfer fees attached, charitable or not.Because Fannie and Freddie purchase most home mortgages, the guidelines they follow have a huge effect on the marketplace and the ability to sell a home that had a transfer fee attached.Thomas said the message to groups that currently use transfer fees is: “There is a federal rule coming down. Be wary of what you are doing.”Hale said the biggest hurdle with the bill has been that many people think the private transfer fees benefit homeowner associations.There are some HOAs and nonprofits that use transfer fees for community improvements or charitable work, and they still would be able to do so under the House bill, unlike developers.Real estate agents and title companies oppose private transfer fees and see the issue as one of consumer protection and keeping title records transparent, while some builders and developers see the fees as a way to fund projects. The National Association of Realtors and the American Land Title Legislation created model legislation and have been trying to restrict private transfer fees across the country.By Jennifer Hillerjhiller [!at] express-news.netRead more: http://www.mysanantonio.com/business/article/House-OKs-limiton-transfer-fees-1376176.php#ixzz1M98Nph2J