[§501-232]  Prohibition of

transfer fees.  (a)  A deed restriction or other covenant running with the

land applicable to the transfer of real property that requires a transferee of

real property or the transferee's heirs, successors, or assigns to pay a fee in

connection with a future transfer of the property to a declarant or other

person imposing the deed restriction or covenant on the property or a third

party designated by a transferor of the property is prohibited.  A deed

restriction or other covenant running with the land that violates this section

or a lien purporting to encumber the land to secure a right under a deed

restriction or other covenant running with the land that violates this section

is void and unenforceable.

     (b)  This section shall not apply to the

following fees or charges required by a deed restriction or other covenant

running with the land in connection with the transfer of real property:

     (1)  Any interest, charge, fee, or other amount

payable by a borrower to a lender pursuant to a loan secured by real property,

including any fee payable to the lender for consenting to an assumption of the

loan or transfer of the real property, for providing an estoppel letter or

certificate, or for any shared appreciation interest or profit participation or

other consideration payable to the lender in connection with the loan;

     (2)  Any fee, charge, assessment, or fine payable to

an association of apartment owners as defined in section 514A-3, an association

as defined in section 514B-3, a cooperative housing corporation as described in

section 421I-1, a limited-equity housing cooperative as defined in section

421H-1, or a planned community association as defined in section 607-14 and

described in chapter 421J, pursuant to a declaration, covenant, or law

applicable to such association or corporation, including a fee or charge to

change the association or corporation's records as to the owner of the real

property or to provide an estoppel letter or certificate;

     (3)  Any fee or charge payable to a lessor under a

lease of real property, including a fee or charge payable to the lessor for

consenting to an assignment of the lease, for providing an estoppel letter or

certificate, or to change the lessor's records as to the holder of the lessee's

interest in the lease;

     (4)  Any consideration payable to the holder of an

option to purchase an interest in real property or the holder of a right of

first refusal or first offer to purchase an interest in real property for

waiving, releasing, or not exercising the option or right upon transfer of the

real property to another person;

     (5)  Any fee, charge, shared appreciation interest,

profit participation, or other consideration, payable by:

         (A)  A person engaged in the business of the

development of real property for resale to others and not for the person's own

use or the use of the person's parent, affiliates, subsidiaries, or relatives;

         (B)  A person who acquires the real property

for the purpose of engaging in the business of the development of real property

for resale to others or for the purpose of reselling the real property to a

person engaged in the business of the development of real property for resale

to others; or

         (C)  A person who purchases real property

initially transferred at a price below the then prevailing market value of the

real property pursuant to an affordable housing program established by the

seller; provided that such fee, charge, shared appreciation interest, profit

participation, or other consideration becomes payable, if ever, within ten

years of the recording of the deed restriction or other covenant running with

the land imposing the fee or charge on the real property;

     (6)  Any fee or charge payable to a government entity;

     (7)  Any fee, charge, assessment, or other amount

payable pursuant to a deed restriction or other covenant running with the land,

regardless of when filed or recorded, that was required by a litigation

settlement that was approved by a court of competent jurisdiction before [June

22, 2010]; or

     (8)  Any reasonable fee payable to a qualified

organization for:

         (A)  The qualified organization's management,

stewardship, or enforcement of a qualified real property interest in the real

property, granted exclusively for a conservation purpose; or

         (B)  Educating new owners of the real property

on the restrictions imposed by the qualified real property interest granted

exclusively for a conservation purpose.

          As used in this paragraph, "qualified

real property interest", "qualified organization", and "conservation

purpose" have the same meaning as in section 170(h)(2), (3), and (4),

respectively, of the Internal Revenue Code.

     (c)  Any:

     (1)  Deed restriction;

     (2)  Covenant running with the land; or

     (3)  Lien;

to the extent that it purports to secure the payment

of a transfer fee prohibited by this section, and that is created or filed on

or after [June 22, 2010], shall be void and shall not be binding on or

enforceable against the subject real property or any subsequent owner,

purchaser, or mortgagee of any interest in the real property.  This subsection

shall not imply that any particular deed restriction, covenant running with the

land, or lien that is created or filed prior to [June 22, 2010], is valid per

se.

     (d)  No person shall be entitled to recover

from the recipient or payee any fee, charge, or assessment required by a deed

restriction or other covenant running with the land in connection with the

transfer of real property to the extent that the fee, charge, or assessment was

paid prior to [June 22, 2010].

     (e)  For purposes of this section:

     "Filed" means filed in the office of

the assistant registrar of the land court.

     "Recorded" means the same as defined

in section 502-7. [L 2010, c 169, §§1, 5; am L 2013, c 42, §2]

 

Cross References

 

  Bureau of conveyances; prohibition of transfer fees, see

§502-112.