NAR seeks federal ban on private transfer fees

Realtor, title, consumer groups unite in opposition

A coalition of consumer advocates, unions and real estate industry groups is seeking a federal ban on private transfer fee covenants, a technique used to finance the capital costs of some new developments through fees that are collected every time a home changes hands.

Proponents say the technique — also known as reconveyance financing — can make new homes more affordable by spreading the costs of building a subdivision’s infrastructure out over time. The fees, usually 1 percent, "run with the land" and are typically in force for 99 years.

Critics — including the National Association of Realtors, the American Land Title Association, the Center for Responsible Lending and the American Federation of State, County and Municipal Employees (AFSCME) — have banded together as the "Coalition to Stop Wall Street Home Resale Fees."