Pennsylvania Bans Private Transfer FeesJuly 2011 – Newsletters In the Zone
On June 24, 2011, Pennsylvania Governor Tom Corbett signed legislation prohibiting the imposition of private transfer fees (PTFs) on real estate transactions in the Commonwealth. Pennsylvania joins 27 other states in banning PTFs.
PTFs are part of a covenant attached to the property deed that forces the seller to pay a percent of the purchase price (usually one percent) to a private third party every time the property sells over the 99 years. The fee generally serves only to provide additional income to a third party and sometimes can discourage a buyer from purchasing a home due to the extra cost.
A national coalition has formed to battle the legality of the fees in state legislatures across the nation. The group includes consumer organizations, the REALTORS©, Land Title Associations and others. The Pennsylvania REALTORS© have produced a video explaining PTFs and impacts of the fee.
Pennsylvania state legislators Sen. Wayne Fontana (D-Allegheny) and State Rep. Sue Helm (R-Dauphin) advocated passage of House Bill 442 , which gives home buyers added protection during the purchase process. The new law prohibits the charging of private transfer fees in real estate transactions. And, for those PTFs already attached to a property, the law specifies disclosure requirements for existing private transfer fees in order for them to remain valid.
HB 442 takes effect immediately.
For more information, please contact Robert W. Gundlach, Jr. at 215.918.3636 or [email protected].
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