[§502-112] 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 recorded or filed, 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 recorded
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 recorded 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 pursuant to chapter 501. [L 2010, c 169, §§2, 5; am L 2013, c 42, §2]
Cross References
Land court; prohibition of transfer fees, see §501-232.