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AB-3041 Real estate transfer fees: prohibition.(2017-2018)

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Date Published: 09/07/2018 09:00 PM
AB3041:v96#DOCUMENT

Assembly Bill No. 3041
CHAPTER 306

An act to add Section 1098.6 to the Civil Code, relating to real estate transfer fees.

[ Approved by Governor  September 07, 2018. Filed with Secretary of State  September 07, 2018. ]

LEGISLATIVE COUNSEL'S DIGEST


AB 3041, Cunningham. 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.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 1098.6 is added to the Civil Code, to read:

1098.6.
 (a) (1) On or after January 1, 2019, a transfer fee shall not be created.
(2) This subdivision does not apply to excepted transfer fee covenants as defined by Section 1228.1 of Title 12 of the Code of Federal Regulations. Excepted transfer fee covenants are not required to comply with subparagraph (H) of paragraph (2) of subdivision (b) of Section 1098.5.
(b) Any transfer fee created in violation of subdivision (a) is void as against public policy.
(c) For purposes of this section, “transfer fee” has the same meaning as that term is defined in Section 1098.