Recently Hawaii Gov. Linda Lingle joined state legislatures and governors in 14 states across the country who have taken action to protect American homeowners by placing bans on Wall Street Home Resale Fees (also known as private transfer fee covenants.) Lingle’s signing of House Bill 2288 means Hawaii joins Arizona, Florida, Kansas, Iowa, Maryland, Minnesota, Mississippi, Missouri, Ohio, Oregon, Texas and Utah in banning Wall Street Home Resale Fees. California requires notification that these fees exist in a contract.
According to ALTA, the allowance of Wall Street Home Resale Fees would force homeowners to pay a large fee to sell their homes and also add a complicated legal roadblock to the home sale process. As a result, this controversial financial scheme is facing opposition across the country, ALTA said.
Companies in the real estate industry, led by Manhattan-based Freehold Capitol Partners, are attempting to add language to home purchase contracts requiring that a percentage of the sales price be paid to the original corporate owner of a property every time the property is sold, typically for 99 years. The right to collect these Wall Street Home Resale Fees would then be securitized and sold to enrich investors, adding a complicated legal roadblock to the home sale process.