PA Senate, House Send Private Transfer Fee Ban to Governor

Jun 16, 2011

Pennsylvania’s Legislature has passed legislation banning private transfer fees. CAI’s Pennsylvania Legislative Action Committee supported this Bill and worked with a coalition of interest groups across the state including the PA Realtors Association, PA Land Title Association and PA Bankers Association to seek its adoption.

House Bill 442 would prohibit the use of certain private transfer fees (PTFs) which are covenants attached to the deed of a property that force the seller to pay one percent of the sale price to a developer, in conjunction with an out-of-state privately held company, for 99 years. PTFs constitute an unreasonable restraint on the transferability of real property, and are a private investment vehicle without any valid development purpose designed only to benefit the developer who imposes them. HB 442 preserves the rights of community associations to levy transfer fees for capital improvements which help fund replacement reserves necessary for the maintenance and improvement of the community, as well as fees which may be charged by an association, or its agent, for the statutorily-required resale certificate. CAI lobbied for a stronger exclusion for community associations and the legislation includes amended language to address CAI’s concerns.

The Bill was signed in the House on June 15 and sent to the Governor, who is expected to sign the legislation.  The Bill, once signed by the Governor, will take affect immediately. Read the text of the Bill.

Visit the legislative section of our website for up to date information on other pending legislation affecting community associations in Pennsylvania.

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