Bill Introduced To Ban Home Resale Fees

from the no-sale dept

For a while now, we've been covering attempts by some banker-types to get housing developers to add a resale fee to homes so that if and when you resell your house, you have to pay a percentage of the sale price back to the developer. Of course, the real plans is for the main company behind this plan, Freehold Capital Partners, to securitize and sell off these fees, giving developers a chunk of money upfront. As with any such thing, what this really does is drive down the value of your home and make it more difficult to sell. And, these terms are often slipped in with little to no notice.

A bunch of states have banned these fees, but now a federal bill has been introduced in the House to ban such things nationwide, as a predatory transfer fee. I'm not sure an overall ban makes sense, but at the very least, these sorts of deals (and their serious implications) should be made clear to home buyers well before they decide to purchase a house.

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  1. icon
    cc (profile), 4 Oct 2010 @ 11:24pm

    Re: Help me understand these.

    It's "house copyright", really. It completely destroys the first sale doctrine on property you legally own using a stupid legal loophole. It *should* be banned.

    The older TechDirt story Mike linked to says:
    "The fee, written into neighborhood restrictions, would encumber the property for 99 years and throw 1 percent of the sale price back to the developer -- or his or her estate or another investor -- and Freehold each time the home changes hands."

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