| 1 | A bill to be entitled |
| 2 | An act relating to transfer fee covenants; creating s. |
| 3 | 689.28, F.S.; providing legislative intent regarding |
| 4 | transfer fee covenants; providing definitions; providing |
| 5 | that certain transfer fee covenants are unenforceable |
| 6 | against subsequent owners, purchasers, and mortgagees; |
| 7 | providing that a presumption is not created in favor of |
| 8 | transfer fee covenants recorded before the effective date |
| 9 | of the act; providing an effective date. |
| 10 |
|
| 11 | Be It Enacted by the Legislature of the State of Florida: |
| 12 |
|
| 13 | Section 1. Subsection 689.28, Florida Statutes, is created |
| 14 | to read: |
| 15 | 689.28 Prohibition against transfer fee covenants.-- |
| 16 | (1) INTENT.--The Legislature finds and declares that the |
| 17 | public policy of this state favors the marketability of real |
| 18 | property and the transferability of interests in real property |
| 19 | free of title defects, unreasonable restraints on alienation, |
| 20 | and covenants and servitudes that do not touch and concern the |
| 21 | property. The Legislature further finds and declares that |
| 22 | transfer fee covenants violate this public policy by impairing |
| 23 | the marketability and transferability of real property, |
| 24 | constituting an unreasonable restraint on alienation regardless |
| 25 | of the duration of such covenants or the amount of such transfer |
| 26 | fees, and do not touch and concern the real property for the |
| 27 | purposes of running with the title to the property or for |
| 28 | binding subsequent owners of the property under common law or |
| 29 | equitable principles. |
| 30 | (2) DEFINITIONS.--As used in this section, the term: |
| 31 | (a) "Environmental covenant" means a covenant or servitude |
| 32 | that imposes limitations on the use of real property pursuant to |
| 33 | an environmental remediation project pertaining to the property. |
| 34 | An environmental covenant is not a transfer fee covenant. |
| 35 | (b) "Transfer" means the sale, gift, conveyance, |
| 36 | assignment, inheritance, or other transfer of an ownership |
| 37 | interest in real property located in this state. |
| 38 | (c) "Transfer fee" means a fee or charge payable upon the |
| 39 | transfer of an interest in real property, or payable for the |
| 40 | right to make or accept such transfer, regardless of whether the |
| 41 | fee or charge is a fixed amount or is determined as a percentage |
| 42 | of the value of the property, the purchase price, or other |
| 43 | consideration given for the transfer. The following are not |
| 44 | transfer fees for purposes of this section: |
| 45 | 1. Any consideration payable by the grantee to the grantor |
| 46 | for the interest in real property being transferred, including |
| 47 | any subsequent additional consideration for the property payable |
| 48 | by the grantee based upon any subsequent appreciation, |
| 49 | development, or sale of the property. |
| 50 | 2. Any commission payable to a licensed real estate broker |
| 51 | for the transfer of real property pursuant to an agreement |
| 52 | between the broker and the grantor or the grantee, including any |
| 53 | subsequent additional commission for that transfer payable by |
| 54 | the grantor or the grantee based upon any subsequent |
| 55 | appreciation, development, or sale of the property. |
| 56 | 3. Any interest, charges, fees, or other amounts payable |
| 57 | by a borrower to a lender pursuant to a loan secured by a |
| 58 | mortgage against real property, including, but not limited to, |
| 59 | any fee payable to the lender for consenting to an assumption of |
| 60 | the loan or a transfer of the real property subject to the |
| 61 | mortgage, any fees or charges payable to the lender for estoppel |
| 62 | letters or certificates, and any shared appreciation interest or |
| 63 | profit participation or other consideration described in s. |
| 64 | 687.03(4) and payable to the lender in connection with the loan. |
| 65 | 4. Any rent, reimbursement, charge, fee, or other amount |
| 66 | payable by a lessee to a lessor under a lease, including, but |
| 67 | not limited to, any fee payable to the lessor for consenting to |
| 68 | an assignment, subletting, encumbrance, or transfer of the |
| 69 | lease. |
| 70 | 5. Any consideration payable to the holder of an option to |
| 71 | purchase an interest in real property or the holder of a right |
| 72 | of first refusal or first offer to purchase an interest in real |
| 73 | property for waiving, releasing, or not exercising the option or |
| 74 | right upon the transfer of the property to another person. |
| 75 | 6. Any tax, fee, charge, assessment, fine, or other amount |
| 76 | payable to or imposed by a governmental authority. |
| 77 | 7. Any fee, charge, assessment, fine, or other amount |
| 78 | payable to a homeowners', condominium, cooperative, mobile home, |
| 79 | or property owners' association pursuant to a declaration or |
| 80 | covenant or law applicable to such association, including, but |
| 81 | not limited to, fees or charges payable for estoppel letters or |
| 82 | certificates issued by or on behalf of the association. |
| 83 | 8. Any fee, charge, assessment, dues, contribution, or |
| 84 | other amount imposed pursuant to a declaration or covenant |
| 85 | encumbering four or more parcels in a community, as defined in |
| 86 | s. 720.301, and payable to a nonprofit organization for the |
| 87 | purpose of supporting cultural, educational, charitable, |
| 88 | recreational, or other similar activities benefiting the |
| 89 | community that is subject to the declaration or covenant. |
| 90 | 9. Any payment required pursuant to an environmental |
| 91 | covenant. |
| 92 | (d) "Transfer fee covenant" means a declaration or |
| 93 | covenant purporting to affect real property which requires or |
| 94 | purports to require the payment of a transfer fee to the |
| 95 | declarant or other person specified in the declaration or |
| 96 | covenant or to their successors or assigns upon a subsequent |
| 97 | transfer of an interest in the real property. |
| 98 | (3) PROHIBITION.--A transfer fee covenant recorded in this |
| 99 | state on or after July 1, 2008, does not run with the title to |
| 100 | real property and is not binding on or enforceable at law or in |
| 101 | equity against any subsequent owner, purchaser, or mortgagee of |
| 102 | any interest in real property as an equitable servitude or |
| 103 | otherwise. Any lien purporting to secure the payment of a |
| 104 | transfer fee under a transfer fee covenant recorded in this |
| 105 | state on or after July 1, 2008, is void and unenforceable. This |
| 106 | subsection does not mean that transfer fee covenants or transfer |
| 107 | fee liens recorded in this state before July 1, 2008, are |
| 108 | presumed valid and enforceable. |
| 109 | Section 2. This act shall take effect July 1, 2008. |