RECON
Real Estate Center Texas A&M University Online News
March 30, 2010

SAN ANTONIO (San Antonio Express-News) – Freehold Capital Partners, a company started in Austin, is signing with developers across the country to write a private transfer fee into neighborhood restrictions, allowing developers to profit when a home is resold.

The fee would encumber the property for 99 years and return 1 percent of the selling price back to the developer, his or her estate or another investor as well as Freehold each time the home is sold.

Freehold says it has signed developers across Texas, but because courthouse property records are filed by owner name, it is difficult to track the company’s activities in Texas and know which developers have signed on to the program.
Title companies watching Freehold says it’s possible for homeowners to never be aware of the attached fee until they sell their homes, as few people read all the neighborhood restrictions before signing.

Texas lawmakers have passed restrictions on private transfer fees in response to Freehold’s sales pitch, but the fees are not banned.

The American Land Title Association and the National Association of Realtors have written model legislation banning private transfer fees that members can present to legislators. Additionally, trade groups have asked the U.S. Department of Housing and Urban Development to clarify that it prohibits private transfer fees on government-insured mortgages.

The Real Estate Center is part of the Mays Business School at Texas A&M University in College Station - the heart of the Research Valley.
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