71. My HOA has been reviewing our governing documents and a section contains a private transfer fee, our Board of Directors wants to know what that is, can you help us?

In 2012 the Federal Housing Finance Agency (FHFA) published a proposed guideline outlining issues with Private Transfer Fees. Within the proposed guidelines it was defined as:

… a private transfer fee covenant is attached to real property by the owner or another private party, frequently, the property developer, and  provides for a transfer fee to be paid to an identified third party (such as the developer or its trustee) upon each resale of the property. The fee typically is stated as a percentage, such as one percent of the property’s sales price and often survives for a period of ninety-nine (99) years.

Federal RegisterPrivate Transfer Fees – Final Rule
RIN-2590-AA41
Fannie Mae; FHLBanks; Freddie Mac
12 CFR 1228
Federal Register Citation: 77 FR 15566
Authority: 12 U.S.C. 4511, 4513, 4526, 4616, 4617, 4631.