[4] According to the Coalition to Save Community Benefits, private transfer fee covenants of some kind encumber approximately eleven million homes in the United States.
In addition, private transfer fee statutes in Alabama, California, Connecticut, Kentucky, Maine, Nebraska, New Jersey, North Dakota, Pennsylvania, South Dakota and Texas [12] require that the sales contract between the buyer and the seller disclose the existence of a private transfer fee covenant, which provides an additional form of actual notice.
[27] In a 2008 White Paper, Realtors worried that "private transfer fees could increase the cost of homes or, upon their discovery, result in the cancellation of purchase agreements.
Supporters argue that a private transfer fee is a viable alternative way to pay for multi-million dollars infrastructure costs incurred by the developer.
Private transfer fee covenants balance the needs of the buyer, the developer, and the community in a Pareto-efficient way by more efficiently restructuring the economics of the real estate transaction.
The fact that a private transfer fee lowers home prices, and reduces the monthly or annual debt service burden, has important public policy implications for housing affordability.
The reality is that filing a document in the deed records is generally fatal to a legal argument of inadequate disclosure, because the encumbrance will appear on a properly prepared title commitment.
Both logic and the available data suggest that the market will adjust the price of real estate to reflect encumbrances of record (including private transfer fees).
These groups first collided over the issue in 2007, when the California Association of Realtors ("CAR") put forward a "Model Private Transfer Fee Covenant" statute drafted by the NAR and ALTA.
[64] However, builders, real estate developers and non-profits, together with Freehold Capital Partners (widely credited with originating the widespread use of private transfer fees) banded together.
[74] Simply stated, the Final Rule dictates the types of securities that Fannie Mae, Freddie Mac and the Federal Home Loan Board banks can hold.
In response, neighborhood homeowner associations, often backed by state laws, began imposing deed restrictions prohibiting satellite dishes.
However, these prohibitions were ultimately held unenforceable on the grounds that the FCC regulated satellite transmissions under the Telecommunications Act of 1934, 1996, thus pre-empting state law.
The legislative history of the Act sets out the broad scope: "(a)s long as a work fits within one of the general subject matter categories ... the bill prevents the states from [regulating] it even if it fails to achieve federal statutory copyright because it is too minimal or lacking in originality to qualify, or because it has fallen into the public domain.
[85] Specifically prohibited from protection are "structures other than buildings, such as bridges, cloverleafs, dams, walkways, tents, recreational vehicles, mobile homes, and boats."
"[104] Instead, the difference must "hav[e] a fair and substantial relation to the object of the legislation",[105] and there must be a "reasonably conceivable set of facts" justifying the disparate treatment.
Instead, the restraint must be unreasonable (e.g. rise to a level sufficient to significantly diminish the pool of prospective buyers to the point where marketability is materially impaired.).
(2016) [115] the Tennessee Court of Appeals (Knoxville) considered plaintiff's claim that an excessive HOA fee was so outrageous as to constitute an unreasonable restraint on alienation.
As such, a court could conclude that the statutory carve outs, which allow payments to be assessed in favor of use by one class, but not by another, and with no distinction in the burden placed on the payor, and which rests entirely on a flawed premise, is "so attenuated as to render the distinction arbitrary and irrational," [122] particularly when, as seems to be the case with private transfer fee legislation, the legislation appears to have been motivated more by political considerations than public considerations.
v. Barnette, the purpose of constitutional rights is "to withdraw certain subjects from the vicissitudes of political controversy, to place them beyond the reach of majorities and officials and to establish them as legal principles to be applied by the courts".
This premise - that citizens should be able to rely in good faith on the law in effect at the time, and that it is highly inequitable and unjust to destroy the rights he has acquired - arose from federalist concerns over a tyrannical majority.
[138] The threshold inquiry for a takings claim is whether the private party affected has some protectable legal interest that existed prior to the rules being changed.
[163] "Of course, it must be constantly remembered, that even the police power is restricted by the fourteenth amendment, which prohibits the states from taking property without due process of law.
[165] In Energy Reserves Group v. Kansas Power & Light [166] the Supreme Court spelled out a three-part "Rational Basis" style analysis [167] for scrutinizing whether or not a law runs afoul of the Contract Clause.
As discussed in subsection "H" (infra) and otherwise herein, private transfer fee covenants largely fail to effectuate their stated purpose of reducing or eliminating unreasonable restraints on alienation.
As such, a state statute that invalidates private transfer fee covenants which were both in existence and enforceable under the law at the time of creation would likely run afoul of the Contact Clause.
The rationale is that HOA transfer fees directly or indirectly can pay for the construction and maintenance of roads, parks, and common areas and facilities which community owners use and benefit from.
2011), the Arizona Court of Appeals considered the enforceability of an affirmative covenant to pay homeowner fees to support common facilities and recreational amenities.
[193] The Court also criticized the plaintiffs view of "benefit" and "value" as too subjective, noting that while "GVR membership may not be regarded as valuable by all people, nothing in the record suggests it is utterly lacking in intrinsic value; indeed, the opposite is more likely the case.
Nonetheless, a properly prepared private transfer fee covenant will set out the benefits,[195] as well as an owner's acknowledgement of same, generally accomplished by means of acceptance of title to the property.