Private Transfer Fees (“PTFs”), fees imposed by the developer, typically require the payment of a fee when the property is resold by the original buyer and any subsequent owner to a new purchaser.  While the fees often provide a benefit to the property, that is not always the case. Current law requires a notice that the Federal Housing Finance Agency and the Federal Housing Administration are prohibited from dealing in mortgages with PTFs that do not provide a “direct benefit” to the encumbered property and that this may make financing the property difficult.

AB 3041, effective January 1, 2019, prohibits PTFs unless the fee provides a direct benefit to the property.  Such newly created fees would not require the notice required for existing PTFs.  Additionally, any PTF created in violation of this law is void as against public policy.

Assembly Bill No. 3041

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