This Act prohibits the running of a transfer fee covenant with the title to real property. The Act defines a transfer fee to mean a fee or charge payable upon the transfer of an interest in real property, or payable for the right to make or accept a transfer of an interest in real property, regardless of whether the fee or charge is a fixed amount or is determined as a percentage of the value of the property, the purchase price, or other consideration given for the transfer. The Act defines a transfer fee covenant to mean a declaration or covenant purporting to affect real property which requires or purports to require the payment of a transfer fee to the declarant or other person specified in the covenant or declaration, or to their successors or assigns, upon a subsequent transfer of an interest in real property.
The Act provides that a transfer fee covenant shall not run with the title to real property and is not binding on or enforceable at law or in equity against any subsequent owner, purchaser, or mortgagee of any interest in real property. Any lien purporting to secure the payment of a transfer fee under a transfer fee covenant is void and unenforceable.
The Act specifies various types of consideration, commissions, interests, charges, fees, rent, reimbursement, taxes, assessments, or fines that do not constitute a transfer fee and are not not subject to the prohibition.