Calif. Civil Code §§1098, 1098.5 and 1102.6e
Amended by A.B. 807
Effective date: January 1, 2016
Existing law is clarified to define private transfer fees as any fees imposed by a real estate instrument as a result of the transfer of real estate, regardless of when payment of the fees is demanded.
The previous version of this definition stated private transfer fees were imposed upon the transfer of real estate, unintentionally implying that fees which were not paid immediately at the time of the transfer did not statutorily qualify as private transfer fees and did not need to be disclosed as such. Thus, homeowners were charged undisclosed private transfer fees through disguised methods, such as prorated monthly payments.
Private transfer fees include:
- transfer taxes;
- recording fees;
- homeowners association (HOA) fees; and
- escrow fees.
The amount and method of calculating the private transfer fee — when the fee is not a flat amount or set percentage of the sale price — needs to be recounted on a separate document rather than incorporated through reference to related documents.
Examples of dollar amounts for residential property are required when the fee amount is based on the property’s sale price.
Transfer fees recorded against a property prior to December 31, 2007 are no longer applicable under the clarified definition. However, such fees can be re-recorded in compliance with the clarified law prior to December 31, 2016.