Monday, September 13, 2010
One positive for the Florida Housing Market: prohibition against developers’ resale fees!
Florida has at least one good thing going for it in the housing market – Section 689.28, Florida Statutes, which prohibits transfer fee covenants.
While transfer fees payable to a condominium association, cooperative association, homeowners association or mobile home association were specifically exempt from the statute, in general the statute prohibits developers from collecting a fee every time a property is sold. Other states do not have such statutory protections, and developers are attempting to take advantage in today’s tough market. Some developers are including transfer fees of $5,000.00 or $7,500.00 every time the property is sold for the next ninety-nine years! Thank goodness the Florida legislature prohibited such practices in Florida.
See the story in the New York Times, here.
The FHFA should take into account that its recent proposed regulation should similarly exempt association transfer fees. It is hoped that other states will follow Florida’s suit and similarly prohibit developer transfer fees that are quickly becoming a relied-upon source of revenue for some desperate developers in today’s real estate market.