Bill Text: OR HB2703 | 2011 | Regular Session | Introduced

---

Bill Title: Relating to transfer fee covenants on real property; declaring an emergency.

Spectrum: Unknown

Status: (Failed) 2011-06-30 - In committee upon adjournment. [HB2703 Detail]

Download: Oregon-2011-HB2703-Introduced.html

---

     76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session

NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .

LC 1750

                         House Bill 2703

Introduced and printed pursuant to House Rule 12.00. Presession
  filed (at the request of House Interim Committee on Judiciary)

                             SUMMARY

The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.

  Prohibits enforcement of transfer fee covenant included in
documents transferring interest in real property to extent that
covenant runs with land or title.
  Declares emergency, effective on passage.

                        A BILL FOR AN ACT
Relating to transfer fee covenants on real property; and
  declaring an emergency.
Be It Enacted by the People of the State of Oregon:
  SECTION 1.  { + The Legislative Assembly finds and declares
that:
  (1) The public policy of this state favors the marketability of
real property and the transferability of interests in real
property free from title defects, unreasonable restraints on
alienation, and covenants or servitudes that do not touch and
concern the property.
  (2) A transfer fee covenant violates the public policy of this
state by impairing the marketability of title to the affected
real property and constitutes an unreasonable restraint on
alienation and transferability of property, regardless of the
duration of the covenant or the amount of the transfer fee set
forth in the covenant.
  (3) A transfer fee covenant, to the extent that it purports to
run with the land or the title to land, is void and unenforceable
as contrary to public policy. + }
  SECTION 2.  { + As used in sections 1 to 3 of this 2011 Act:
  (1) 'Transfer' means the sale, gift, conveyance, assignment,
inheritance or other transfer of an ownership interest in real
property located in this state.
  (2) 'Transfer fee' means a charge payable upon the transfer of
an interest in real property or payable for the right to make or
accept a transfer, without regard to whether the charge is a
fixed amount or a calculated amount determined as a percentage of
the value of the property or the purchase price.
  (3) 'Transfer fee' does not mean:
  (a) Consideration payable by the grantee to the grantor for the
interest in real property being transferred, including subsequent
additional consideration for the property payable by the grantee
based upon subsequent appreciation, development or sale of the

property that, once paid, does not bind successors in title to
the property.
  (b) A commission payable to a licensed real estate broker for
the transfer of real property pursuant to an agreement between
the broker and either the transferor or transferee, including any
subsequent additional commission for the transfer payable by the
transferor or the transferee based upon subsequent additional
commission payable by the transferor based upon subsequent
appreciation, development or sale of the property.
  (c) Interest, charges, fees or other amounts payable by a
borrower to a lender pursuant to a loan secured by a mortgage
against real property, including a fee payable to the lender for
consenting to an assumption of the loan or a transfer of the real
property subject to the mortgage, fees or charges payable to the
lender for estoppel letters or certificates and other
consideration allowed by law and payable to the lender in
connection with the loan.
  (d) Rent, reimbursement, charge, fee or other amount payable by
a lessee to a lessor under a lease, including a fee payable to
the lessor for consenting to an assignment, sublet, encumbrance
or transfer of the lease.
  (e) 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 the transfer of the property to another person.
  (f) A tax, fee, charge, assessment, fine or other amount
imposed by or payable to a governmental authority.
  (g) A fee charged that is a typical real estate closing cost,
including closing fees, escrow fees, settlement fees, attorney
fees, title insurance premiums and title insurance fees.
  (h) Reasonable assessments imposed or levied by:
  (A) A homeowners association on or against an owner or lot
pursuant to the provisions of the declaration or the bylaws of
the planned community or provisions of ORS 94.550 to 94.783.
  (B) An association of unit owners on or against an owner or lot
pursuant to the provisions of the declaration or the bylaws of
the planned community or provisions of ORS chapter 100.
  (4) 'Transfer fee covenant' means a declaration or covenant
that, by its terms, purports to affect real property by
requiring, upon a subsequent transfer of an interest in the real
property, the payment of a transfer fee to the declarant, to
another person specified in the declaration or covenant or to the
successors or assigns of the declarant or other person. + }
  SECTION 3.  { + (1) A transfer fee covenant or a lien filed to
secure payment of or enforce a transfer fee covenant:
  (a) Does not run with the land or the title to the land.
  (b) Is not binding on or enforceable against a subsequent
owner, purchaser or mortgagee of any interest in real property as
an equitable servitude or otherwise.
  (2) A person that records a transfer fee covenant, files a lien
to secure payment of or enforce a transfer fee or enters into an
agreement imposing a private transfer fee obligation is liable
for:
  (a) Any and all damages resulting from the imposition of the
transfer fee on the transfer of an interest in the real property,
including the amount of the transfer fee paid by a party to the
transfer.
  (b) Attorney fees, expenses and costs incurred by a party to
the transfer or mortgagee of the real property to recover the
transfer fee paid or in connection with an action to quiet title
or register the title or a proceeding subsequent to initial
registration.
  (3) Liability under this section attaches to a principal and
not to an agent who acts in violation of this section on behalf
of the principal. + }
  SECTION 4.  { + Sections 1 to 3 of this 2011 Act apply to
transfer fee covenants entered into before, on and after the
effective date of this 2011 Act. + }
  SECTION 5.  { + This 2011 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2011 Act takes effect on its
passage. + }
                         ----------