Texas Strengthens Private Transfer Fee Law

June 23, 2011

Texas Gov. Rick Perry took important action to protect Texas homeowners by signing HB 8 to strengthen Texas’ existing law that restricts private transfer fees. The bill, authored and led in the House by Rep. Drew Darby (R-San Angelo) and sponsored in the Senate by Sen. Chris Harris (R-Arlington) toughens an existing law that aims to protect consumers from a dangerous new financial scheme that steals home equity, lowers home resale values and adds another layer of difficulty to selling a home.

“These fees infringe on property rights and hurt Texas consumers. They have no place in the Texas real estate market,” Darby said. “With this law, we’re cracking down on the bad actors who try to take advantage of consumers with these fees.”

Harris added that “We’re making sure that we’re closing the loopholes on any financial predators who want to skim money from Texas homeowners’ pockets.”

The new bill requires notification and re-filing every three years for fees that were in place prior to passage of the original legislation. Advocates believe that this re-filing will clear private transfer fees from the title if the beneficiary of the fee fails to re-file and keep payee information current. This in-action will also clear dormant beneficiaries.

“The Texas Land Title Association (TLTA) supported passage of the original statute and we are pleased to support legislation that strengthens the law with important new consumer protections,” said Brian Pittman, president of the Texas Land Title Association. “We applaud Governor Perry, Representative Darby and Senator Harris for protecting unsuspecting homeowners.”

Texas was the first state to legislate against private transfer fees, but it was not the last. To date, thirty-five states have restricted the use of private transfer fees: Alabama, Arizona, Arkansas, California, Colorado, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Utah, Virginia and Washington in restricting the dangerous fees.

On the federal level, the Federal Housing Finance Agency has issued a proposed rule that would prevent government-sponsored entities from investing in mortgages with these fees.


Contact ALTA at 202-296-3671 or communications@alta.org.