Passed by the Senate February 24, 2011 YEAS 48   BRAD OWEN ________________________________________ President of the Senate Passed by the House April 1, 2011 YEAS 93   FRANK CHOPP ________________________________________ Speaker of the House of Representatives | I, Thomas Hoemann, Secretary of the Senate of the State of Washington, do hereby certify that the attached is SUBSTITUTE SENATE BILL 5115 as passed by the Senate and the House of Representatives on the dates hereon set forth. THOMAS HOEMANN ________________________________________ Secretary | |
Approved April 13, 2011, 1:47 p.m. CHRISTINE GREGOIRE ________________________________________ Governor of the State of Washington | April 13, 2011 Secretary of State State of Washington |
State of Washington | 62nd Legislature | 2011 Regular Session |
READ FIRST TIME 02/08/11.
AN ACT Relating to private transfer fee obligations; adding a new chapter to Title 64 RCW; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 The legislature finds and declares that the
public policy of this state favors the marketability of real property
and the transferability of interests in real property free of title
defects or unreasonable restraints on alienation. The legislature
further finds and declares that private transfer fee obligations
violate this public policy by impairing the marketability and
transferability of real property and by constituting an unreasonable
restraint on alienation regardless of the duration of the obligation to
pay a private transfer fee, the amount of a private transfer fee, or
the method by which any private transfer fee is created or imposed.
Thus, the legislature finds and declares that a private transfer fee
obligation may not run with the title to real property, touch or
concern the real property, or otherwise bind subsequent owners of real
property under any common law or equitable principle.
NEW SECTION. Sec. 2 This chapter may be known and cited as the
private transfer fee obligation act.
NEW SECTION. Sec. 3 The definitions in this section apply
throughout this chapter unless the context clearly requires otherwise.
(1) "Association" means: An association of apartment owners as
defined in RCW 64.32.010; a unit owners' association as defined in RCW
64.34.020; a homeowners' association as defined in RCW 64.38.010; a
corporation organized pursuant to chapter 24.06 RCW for the purpose of
owning real estate under a cooperative ownership plan; or a nonprofit
or cooperative membership organization composed exclusively of owners
of mobile homes, manufactured housing, timeshares, camping resort
interests, or other interests in real property that is responsible for
the maintenance, improvements, services, or expenses related to real
property that is owned, used, or enjoyed in common by the members.
(2) "Payee" means the person or entity who claims the right to
receive or collect a private transfer fee payable under a private
transfer fee obligation. A payee may or may not have a pecuniary
interest in the private transfer fee obligation.
(3) "Private transfer fee" means a fee or charge payable upon the
transfer of an interest in real property, or payable for the right to
make or accept such transfer, regardless of whether the fee or charge
is a fixed amount or is determined as a percentage of the value of the
real property, the purchase price, or other consideration given for the
transfer. The following are not private transfer fees for the purposes
of this section:
(a) Any consideration payable by the grantee to the grantor for the
interest in real property being transferred, including any subsequent
additional consideration for the real property payable by the grantee
based upon any subsequent appreciation, development, or sale of the
real property, if such additional consideration is payable on a one-time basis only and the obligation to make such payment does not bind
successors in title to the real property;
(b) Any commission payable to a licensed real estate broker for
services rendered in connection with the transfer of real property
pursuant to an agreement between the broker and the grantor or the
grantee including, but not limited to, any subsequent additional
commission for that transfer payable by the grantor or the grantee
based upon any subsequent appreciation, development, or sale of the
property;
(c) Any interest, charges, fees, or other amounts payable by a
borrower to a lender pursuant to a loan secured by a mortgage against
real property including, but not limited to, any fee payable to the
lender for consenting to an assumption of the loan or a transfer of the
real property subject to the mortgage, any fees or charges payable to
the lender for estoppel letters or certificates, and any shared
appreciation interest, profit participation, or other consideration,
and payable to the lender in connection with the loan;
(d) Any rent, reimbursement, charge, fee, or other amount payable
by a lessee or licensee to a lessor or licensor under a lease or
license including, but not limited to, any fee payable to the lessor or
licensor for consenting to an assignment, subletting, encumbrance, or
transfer of the lease or license;
(e) Any consideration payable to the holder of an option to
purchase an interest in real property or the holder of a right of first
refusal or first offer to purchase an interest in real property for
waiving, releasing, or not exercising the option or right upon the
transfer of the real property to another person;
(f) Any tax, fee, charge, assessment, fine, or other amount payable
to or imposed by a governmental authority;
(g) Any assessment, fee, charge, fine, dues, or other amount
payable to an association pursuant to chapter 64.32, 64.34, or 64.38
RCW, payable by a purchaser of a camping resort contract, as defined in
RCW 19.105.300, or a timeshare, as defined in RCW 64.36.010, or payable
pursuant to a recorded servitude encumbering the real property being
transferred, as long as no portion of the fee is required to be passed
through or paid to a third party;
(h) Any fee payable, upon a transfer, to an organization qualified
under section 501(c)(3) or 501(c)(4) of the internal revenue code of
1986, if the sole purpose of such organization is to support cultural,
educational, charitable, recreational, conservation, or similar
activities benefiting the real property being transferred and the fee
is used exclusively to fund such activities;
(i) Any fee, charge, assessment, dues, fine, contribution, or other
amount pertaining solely to the purchase or transfer of a club
membership relating to real property owned by the member including, but
not limited to, any amount determined by reference to the value,
purchase price, or other consideration given for the transfer of the
real property;
(j) Any fee charged by an association or an agent of an association
to a transferor or transferee for a service rendered contemporaneously
with the imposition of the fee, provided that the fee is not to be
passed through to a third party other than an agent of the association.
(4) "Private transfer fee obligation" means an obligation arising
under a declaration or covenant recorded against the title to real
property, or under any other contractual agreement or promise, recorded
or not, that requires or purports to require the payment of a private
transfer fee upon a subsequent transfer of an interest in the real
property.
(5) "Transfer" means the sale, gift, grant, conveyance, lease,
license, assignment, inheritance, or other act resulting in a transfer
of ownership interest in real property located in this state.
NEW SECTION. Sec. 4 (1) A private transfer fee obligation
recorded or entered into in this state on or after the effective date
of this section does not run with the title to real property and is not
binding on or enforceable at law or in equity against any subsequent
owner, purchaser, or mortgagee or holder of any interest in real
property as an equitable servitude or otherwise. Any private transfer
fee obligation that is recorded or entered into in this state on or
after the effective date of this section is void and unenforceable.
(2) A private transfer fee obligation recorded or entered into in
this state before the effective date of this section is not presumed
valid and enforceable. Any such private transfer fee obligation must
be interpreted and enforced according to principles of applicable real
estate, servitude contract, and other law including, without
limitation, restraints on alienation, the rule against perpetuities,
the touch and concern doctrine, and the requirement for covenants to
run with the land, as well as fraud, misrepresentation, violation of
public policy, or another invalidating cause.
NEW SECTION. Sec. 5 Any person who records, or enters into, an
agreement imposing a private transfer fee obligation in the person's
favor after the effective date of this section is liable for (1) any
damages resulting from the imposition of the private transfer fee
obligation on the transfer of an interest in the real property
including, but not limited to, the amount of any private transfer fee
paid by a party to the transfer, and (2) reasonable attorneys' fees,
expenses, and costs incurred by a party to the transfer or mortgagee of
the real property to recover any private transfer fee paid or in
connection with an action to quiet title. If an agent acts on behalf
of a principal to record or secure a private transfer fee obligation,
liability must be assessed to the principal, rather than the agent.
NEW SECTION. Sec. 6 (1) A payee of a private transfer fee
obligation imposed before the effective date of this section shall
record, before December 31, 2011, against the real property subject to
the private transfer fee obligation, a separate document in the county
auditor's office in the county in which the real property is located
that includes all of the following requirements:
(a) The title, "Notice of Private Transfer Fee Obligation";
(b) The amount if the private transfer fee is a flat amount, the
percentage of the sales price constituting the cost of the private
transfer fee, or another basis by which the private transfer fee is to
be calculated;
(c) The date under which the private transfer fee obligation
expires, if any;
(d) The name and address of the payee;
(e) The acknowledged signature of the payee or a representative of
the payee; and
(f) The legal description of the real property purportedly burdened
by the private transfer fee obligation.
(2) A payee may file an amendment to the notice of private transfer
fee obligation containing new contact information. The amendment must
contain the recording information of the notice of private transfer fee
obligation which it amends and the legal description of the real
property burdened by the private transfer fee obligation.
(3) If a payee fails to file the notice required under subsection
(1) of this section before December 31, 2011, the private transfer fee
obligation is not enforceable by the payee.
NEW SECTION. Sec. 7 This act is necessary for the immediate
preservation of the public peace, health, or safety, or support of the
state government and its existing public institutions, and takes effect
immediately.
NEW SECTION. Sec. 8 If any provision of this act or its
application to any person or circumstance is held invalid, the
remainder of the act or the application of the provision to other
persons or circumstances is not affected.
NEW SECTION. Sec. 9 Sections 1 through 7 of this act constitute
a new chapter in Title