April 29, 2011
Minnesota Real Estate
SB 234 Residential Real Property Transfer Fee Covenants Passes out of the Senate
SB 234 Residential Real Property Transfer Fee Covenants by Sen. Cheri Jahn (D-Wheatridge) and Rep. Tom Massey (R-Poncha Springs) passed out of the Senate on 3rd Reading today. Senate Bill 234 bans the enforcement of non-exempted private transfer fee covenants recorded after the effective date of the bill and requires all non-exempted covenants in place prior to enactment be recorded. The bill is effective upon the Governor's signature.
CAR has been concerned about private transfer fees paid to a third party upon the transfer of real property. The fee is usually paid by the seller and can either be a fixed amount or a percentage of the sales price. In a typical situation, a property owner records a covenant subjecting the property to a private transfer fee (often, the first sale is exempted). For as long as the covenant is in place, which can be up to 99 years or longer, every time the property is sold the private transfer fee must be paid to the original owner and/or third party. And at least one out-of-state company that markets private transfer fees to property owners takes part of the private transfer fee payments that result from its marketing efforts. SB 234 is now headed to the House.
SB 264 Clarify Lis Pendens & Liens
CAR supports SB 264, introduced by Sen. Linda Newell (D-Littleton) and Rep. Bob Gardner (R-Colorado Springs). Upon the filing of a bond or undertaking as a substitute for the filing of a mechanics' or real estate broker's lien, SB 264 provides that:
- The lien, and any notice of lis pendens relating to the lien or notice of the commencement of any action relating to a lien filed against the real property, is immediately discharged and released in full;
- The real property described in the bond or undertaking is to be forever released from the lien and from any notice of lis pendens or notice of the commencement of any action relating to the lien and from any action brought to foreclose the lien; and
- No notice of lis pendens or notice of the commencement of any action relating to the lien or any action for the enforcement of the lien shall thereafter be recorded against the property.
This bill also requires the clerk of the district court to show that the property has been forever released from the lien and from any notice of lis pendens or notice of the commencement of any action relating to such lien in the certificate of release issued by the clerk. SB 264 makes an exception for its provisions from statutory requirements specifying when a record notice of lis pendens shall remain in effect. SB 264 has been assigned to Senate Judiciary.
NAR President's Podcast
NAR President Ron Phipps NAR President Ron Phipps discusses new legislation in Congress aimed at putting a deadline on lenders responding to short sales. He also explains the effects the "qualified residential mortgages" (QRM) and the current budget discussions could have on the real estate industry.
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