Hawaii Joins Other States to Outlaw Fees

Hawaii Gov. Linda Lingle has joined state legislatures and governors in 14 states across the country who are placing bans on Wall Street Home Resale Fees (also known as "private transfer fee covenants"). The coalition says this "new financial scheme" lowers home resale values and adds another layer of difficulty to selling a home. 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. Companies in the real estate industry, such as 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 fees would then be securitized and sold "to enrich investors at the cost of stealing equity from consumers, forcing homeowners to pay a large fee to sell their homes and adding a complicated legal roadblock to the home sale process." In addition, Illinois and Louisiana have bills awaiting a governor's signature. Alabama, Georgia, New Jersey, North Carolina, Rhode Island and South Carolina, and seven additional states are expected to introduce legislation in 2011 (Massachusetts, Montana, New York, Nevada, South Dakota, Washington and Wyoming).