Potential homebuyers will find that the Northside offers a variety of amenities, including museums, restaurants, coffee shops and friendly neighbors. They will also find many housing options, such as single-family homes, multi-family homes, as well as condos and townhomes. It is important that consumers aren’t caught off guard when making such a big decision. That is why I was proud to introduce a consumer protection bill in the Senate that addresses the issue of private transfer fees. I wrote to you about it a few months ago.
A private transfer fee is also known as a resale fee or a capital recovery fee and allows the developer or builder of a home to collect one percent (or more) of the sales price from the seller every time the property changes hands for the next 99 years. It is a new tool being used by developers and builders looking to gain access to cash in the depressed housing market.
Senate Bill 353 would ban all new private transfer fees, allow for remedies if private transfer fees are imposed, require the full disclosure of existing private transfer fees, establish a process to free the property of an obligation and require persons entitled to such a fee to register with the county Recorder of Deeds.
I introduced this bill with homebuyers in mind, knowing that these fees may act as a deterrent to potential buyers. The U.S. Department of Housing & Urban Development has already ruled that it will not insure mortgages on properties that include private transfer fees.
The bill passed the Senate unanimously in March and I look forward to working with my colleagues in the House to move the legislation through that chamber. It is important that we get ahead of the issue now before the tactic becomes common practice in Pennsylvania.
If you are planning on buying a home sometime soon, make sure you understand the ins and outs of your mortgage. If there is something you don’t understand or are unsure of, don’t be afraid to address those concerns with your realtor and / or mortgage provider. And as always, if you have a question or concern about any state-related issue, please contact me or my staff and we will be happy to assist you.
Senator Wayne D. Fontana
42nd Senatorial District