Governor Signs Ban on Private Transfer Fees

Jun 28, 2011

On Friday, June 24, Governor Tom Corbett signed into law House Bill 442 which bans the use of private transfer fees in Pennsylvania. The Bill is Act 8 of 2011.

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.

Act 8 prohibits 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. Pennsylvania becomes the 19th state in the nation to ban such transfer fees.

The law 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 Act includes amended language to address CAI’s concerns.

The Bill takes 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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