A bill under consideration in Alaska is doing double duty, providing for residency requirements for title insurance producers as well as a ban on private transfer fees.
The bill, SB 122, sponsored by the Senate Labor & Commerce Committee, would require that a title insurance limited producer could not obtain a license unless the producer is a resident of Alaska.
The proposed law would prohibit the use of private transfer fee covenants. The provision states that “a document that conveys real estate may not include a provision that requires a subsequent grantee or grantor to pay a transfer fee to convey the real estate.”
The bill provides a few exceptions. It would allow documents that convey real estate to include provisions that require a transfer fee if the fee is:
- Payable on a one-time basis only on the next transfer of the interest in real property;
- A loan assumption fee or similar fee charged by a person holding a lien on the property; or
- A fee or commission paid to a licensed real estate broker for brokerage services.
The definition of transfer fee would not include:
- A tax, assessment, fee or charge imposed by a governmental authority;
- A recording fee;
- A fee payable to a nonprofit, mandatory homeowners association, condominium association or cooperative under an applicable declaration or covenant; or
- A fee payable to an organization described in 26 U.S.C. 501(c)(3) or (c)(4) used exclusively for cultural, educational, charitable, recreational, environmental, conservation or similar activities that benefit the real estate conveyed.
A provision of a real estate conveyance that violates the bill would be void.