Would require a notice describing potential prohibitions on federal financing (e.g. FHA loans) for properties encumbered by deed-based transfer fees.
Current Status: Chaptered
FindHOALaw Quick Summary:
Existing law requires the receiver of a deed-based transfer fee (e.g. association recreation fees), on and after January 1, 2009, to record specified information in the chain of title. Existing law also specifies that when a transfer fee is imposed upon real property on or after January 1, 2008, the person or entity imposing the transfer fee, as a condition of payment of the fee, must record a separate document meeting specified requirements. Among other things, that document must contain the title “Payment of Transfer Fee Required” in at least 14-point boldface type and include names of all current owners of the real property subject to the fee, and the legal description and assessor’s parcel number for the affected property, and the fee amount.
This bill would require that document, for private transfer fees created on or after February 8, 2011, to contain a notice in at least 14-point boldface type disclosing certain information, including that federal housing agencies (e.g. FHA) are prohibited from dealing in mortgages on properties encumbered by deed-based transfer fees that do not provide a direct benefit to the real property encumbered, and that if a person purchases such a property, that person may have difficulty obtaining financing.
**UPDATE: AB 1139 was signed by the Governor on July 31, 2017. Its changes to the law will become operative on January 1, 2018.
from the California Legislature's website