Thursday, October 18, 2007

More on private transfer taxes...

For any of you who read my post a few weeks ago regarding "private transfer taxes" (, you may be interested to know there are a couple of new laws in CA that will govern and disclose these far as I know though, these fees are still legal to record on property deeds.

New Disclosure for Private Transfer Fees: Effective January 1, 2008, a seller who must provide a Transfer Disclosure Statement must also provide, at the same time, a disclosure statement of private transfer fees if applicable. A transfer fee is defined as any fee that must be paid upon transfer of real property as imposed by deed, CC&Rs, or other documents, with certain exceptions (such as, but not limited to, transfer fees imposed by probate, trust, court order, or a governmental agency). The new disclosure statement must contain, among other things, a notice that payment is required, the amount of the fee, and the entity to which payment must be made. (Source: Assembly Bill 980.)

Recording Private Transfer Fees: Also effective January 1, 2008, any person or entity imposing a private transfer fee must, as a condition of payment of the fee, record the instrument creating the transfer fee and a separate notice of "Payment of Transfer Fee Required." These two documents must be recorded concurrently in the county recorder's office for which a property is located. The notice of "Payment of Transfer Fee Required" must include the following information:
- Names of the current property owners;
- Assessor's parcel number and legal description;
- Amount of the fee (or percentage of sales price);
- Actual dollar-cost examples of the fee for residential property priced at $250,000, $500,000, and $750,000;
- When the fee expires if applicable;
- Purpose of the funds;
- Name of entity to be paid and that entity's contact information for sending the funds; and
- Signature of that entity's authorized representative.
The title of the notice of "Payment of Transfer Fee Required" must be in at least 14-point bold type. For transfer fees imposed before January 1, 2008, the receiver of the fee must, as a condition of payment of any fee after December 31, 2008, record a notice of "Payment of Transfer Fee Required" by December 31, 2008 (or record a substantial equivalent as specified). (Source: Assembly Bill 980.)


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