On Friday June 17, Governor Rick Perry signed H.B. 8 by Rep. Drew Darby (R-San Angelo) into law. H.B. 8 passed the Texas House of Representatives and Senate in May, and went into effect immediately upon the Governor’s signature.
H.B. 8 prohibits private transfer fees on certain real estate transactions and requires disclosure for properties subject to existing transfer fees. Developers often include the fees, typically 1 percent of the purchase price, as a deed restriction or covenant for new homes that many times are not discovered until the deal closes. Homeowners then do not have a choice other than to pay the fee. The developer continues to collect on every sale within the subdivision for a certain amount of time, usually 99 years, while adding no real value.
H.B. 8 implements disclosure and transparency requirements on existing property transfer fees and prohibits future fees. The bill includes an exemption for homeowners associations and nonprofit organizations. More than 80 state representatives signed on as co-authors to the legislation. At least 20 states have already passed or are considering similar laws.
TAR worked actively to get approval for H.B. 8. “Private transfer fees have no place in Texas real estate,” TAR Chairman Dwight Hale said. “Private transfer fees are simply a scam. They serve no public purpose and provide no benefit to buyers or communities while decreasing housing affordability.”