Thursday, October 31, 2013

FHFA Publishes Final Rule on Private Transfer Fee Covenants

[NOTE: This article first appeared in the Spring 2012 Edition of Hyatt & Stubblefield, P.C.'s "Community Developments"]
Last summer we reported that the Federal Housing Finance Agency (FHFA) had moved beyond proposed "guidance" and had proposed a final rule in its effort to restrict Fannie Mae and Freddie Mac and all federal home loan banks from purchasing mortgages on properties in communities with "private transfer fee covenants." 
The proposed guidance broadly construed the term "private transfer fee covenant" to include essentially any kind of transfer fee payable on successive transfers of property regardless of who collects the fee or the intended use of the fee.  This would have adversely impacted many communities with covenants that provide for collection of such fees as contributions to working capital or capital reserves, for community enhancement, or to fund nonprofit entities organized to promote cultural, educational, environmental conservation, historic preservation, and similar purposes.
FHFA's proposed final rule purported to exempt transfer fees paid to homeowner associations to be used for the direct benefit of the community.  However, the language of the proposed final rule created numerous practical and interpretative issues reflecting a lack of understanding as to how such fees are really used.  Due to the difficulty of determining when a transfer fee qualified for the exemption, the proposed final rule would have created major problems for financing of home purchases in communities with transfer fees.

Monday, October 28, 2013

Georgia Imposes Restrictions on Transfer Fee Covenants

[NOTE: This article first appeared in the Summer 2013 Edition of Hyatt & Stubblefield, P.C.'s "Community Developments"]

Georgia recently adopted a statute which prohibits the imposition of a non-exempt restriction or covenant running with the land on real property which obligates the seller or purchaser of the real property, or their heirs, successors, or assigns, to pay a fee in connection with the transfer of such property to the person establishing the restriction or covenant or to a third-party (often called a "transfer fee covenant").  A transfer fee covenant, however, may be imposed under limited circumstances.  The statute makes only new non-exempt transfer fee covenants created on or after July 1, 2013 void and unenforceable and does not affect existing transfer fee covenants.
The prohibition does not apply to a restriction or covenant running with the land that requires the fee to be paid in connection with the conveyance of property to:

Friday, October 25, 2013

Upcoming Event - CCR's and Easements for Commercial and Mixed-Use Projects

On November 7, 2013, 1:00-2:30 PM EST, David Herrigel will be presenting in a webinar entitled CCR’s and Easements for Commercial and Mixed-Use Projects, sponsored by Strafford Publications.

The  panel will provide real estate practitioners guidance for drafting effective easements and declarations of covenants, conditions, and restrictions (CCR's) for commercial and mixed-use projects, avoiding common pitfalls, and amending existing documents, offering perspectives and guidance on these and other critical questions:

  • What are the fundamental components of commercial or mixed-use CCR's?
  • What are some common, and potentially costly, drafting errors that attorneys make when drafting CCR's?
  • What are the best practices for drafting, analyzing, interpreting and amending CCR's?
After the presentations, the panel will engage in a live question-and-answer session with participants.

For registration information, please visit the Strafford Publications website.

Thursday, October 24, 2013

Wayne Hyatt Receives National Recognition

[NOTE: This article first appeared in the Summer 2013 Edition of Hyatt & Stubblefield, P.C.'s "Community Developments"]
The American College of Real Estate Lawyers (ACREL) awarded its prestigious Frederick S. Lane Award to Wayne Hyatt at its Mid-Year Meeting in Florida this past spring.  Jonathan R. Shils, President of ACREL, stated:  "The Frederick Lane Award is the highest honor the College can bestow.  The Lane Award has previously been given only seven times since the College was founded in 1978 to honor the career contributions of distinguished real estate lawyers who have selflessly served the profession, the College and their community.  In honoring Wayne Hyatt with the Lane Award, the College affirms these values by recognizing such a worthy recipient with this accolade from his peers."
Wayne served as President of ACREL in 2004.  His prior service to the organization included terms as President-Elect, Vice President, Secretary, and member of the Board of Governors; Chair of the Bylaws, Common Interest Ownership and Affordable Housing committees; and membership and leadership participation in over a dozen committees.  He was the driving force behind establishing ACREL Cares, a community service program. 
ACREL was founded in 1978 as a non-profit organization of lawyers who have gained distinction in the practice of real estate law.  The group devotes its efforts to improving the practice of real estate law around the country, and its membership consists of lawyers from 50 states, the District of Columbia, and the U.S. Virgin Islands.  It has become the nation's most prestigious peer selected organization for practicing real estate lawyers. 
Admission to ACREL is by invitation only.  This national legal real estate organization elects to its membership lawyers distinguished for their skill, experience and high standards of professional and ethical conduct in the practice of real estate law