Skip to content
ClosingCodeClosingCode
ENES

Title · 8 statesPrivate transfer fee laws by state: when a resale-fee covenant is void

A private transfer fee covenant requires each future seller or buyer to pay a fee – a fixed amount or a percentage of the price – to a developer or another third party whenever the property is transferred. These states have taken such covenants off title by statute. Florida: a transfer fee covenant recorded on or after July 1, 2008, doesn't run with the land or bind any later owner, purchaser or mortgagee, and a lien securing the fee is void; association fees and estoppel charges under a declaration aren't transfer fees (Fla. Stat. §689.28). Missouri: the same rule for covenants recorded on or after September 1, 2008, with any securing lien void (RSMo 442.558). Arizona: a provision that binds successors and obligates a buyer or seller to pay a fee to a declarant or third person on a transfer is unenforceable whether or not recorded, and a lien based on it is invalid; covenants executed after July 29, 2010, aren't binding (A.R.S. §33-442). Minnesota: an obligation recorded, filed or entered into on or after May 20, 2010, is void; whoever imposes one in its favor is liable for damages and attorney fees, and older obligations had to be preserved by a recorded notice before December 31, 2010 (Minn. Stat. §§513.73–513.76). Washington: an obligation recorded or entered into on or after April 13, 2011, is void and doesn't bind later owners or mortgagees, older ones aren't presumed valid, the person imposing one is liable for damages and fees, and older ones needed a recorded notice before December 31, 2011 (RCW 64.60.020–64.60.040). Texas: obligations created on or after June 17, 2011, are void and unenforceable against later owners, purchasers and their lenders, with listed exclusions such as association fees (Tex. Prop. Code §§5.201–5.208). Kentucky: since April 11, 2012, private transfer fee obligations, recorded or not, are prohibited and void, the person who imposes one is liable for damages and fees, and a buyer can't waive these rights (KRS 382.794). Virginia: a transfer fee covenant recorded on or after July 1, 2011, doesn't run with the title or bind any later owner, purchaser or mortgagee, and a lien securing the fee is void; assessments and fees of a common interest community or cooperative are excluded (Va. Code §55.1-358).

From when each state voids them

  1. Florida (§689.28)

    Recorded on or after July 1, 2008: doesn't run with title; securing lien void; HOA fees excluded.

  2. Missouri (RSMo 442.558)

    Recorded on or after September 1, 2008: doesn't run with title; securing lien void.

  3. Arizona (A.R.S. §33-442)

    Unenforceable whether or not recorded; executed after July 29, 2010: not binding; lien invalid.

  4. Minnesota (§§513.73–513.76)

    On or after May 20, 2010: void; liability for damages and fees; older ones needed a notice by December 31, 2010.

  5. Washington (RCW 64.60.020–.040)

    On or after April 13, 2011: void; older ones not presumed valid; notice by December 31, 2011.

  6. Texas (Prop. Code §§5.201–5.208)

    Created on or after June 17, 2011: void against later owners and lenders; listed exclusions.

  7. Kentucky (KRS 382.794)

    Since April 11, 2012: prohibited and void, recorded or not; liability; buyer can't waive.

  8. Virginia (§55.1-358)

    Recorded on or after July 1, 2011: doesn't run with title; lien void; community association fees excluded.

What the TC does when title shows a transfer fee covenant

  • Ask the title company whether the covenant falls under the state's statute and the date it was recorded.
  • Separate it from association fees, which several statutes exclude.
  • Get the title company's written position before anyone pays the fee at closing.

Questions about private transfer fees

Is a private transfer fee covenant enforceable?

Not in these states for covenants created after their cutoff dates: Florida and Missouri in 2008 (Fla. Stat. §689.28; RSMo 442.558), Arizona and Minnesota in 2010 (A.R.S. §33-442; Minn. Stat. §513.74), Washington, Texas and Virginia in 2011 (RCW 64.60.020; Tex. Prop. Code §5.202; Va. Code §55.1-358) and Kentucky in 2012 (KRS 382.794).

Is an HOA transfer fee a private transfer fee?

Florida expressly excludes fees payable to an association under a declaration, including estoppel fees (Fla. Stat. §689.28(2)(c)), and Texas excludes association fees when no part is passed to an outside third party (Tex. Prop. Code §5.201); Virginia excludes common interest community and cooperative fees (Va. Code §55.1-358(A)); check the specific state's list.

Related guides

Track each title exception and the title company's decision as tasks in ClosingCode.

Start free trial

Sources: Fla. Stat. §689.28 (flsenate.gov); RSMo 442.558 (revisor.mo.gov); A.R.S. §33-442 (azleg.gov); Minn. Stat. §§513.73–513.76 (revisor.mn.gov); RCW 64.60.020–64.60.040 (app.leg.wa.gov); Tex. Prop. Code §§5.201–5.208 (statutes.capitol.texas.gov); KRS 382.794 (apps.legislature.ky.gov); Va. Code §55.1-358 (law.lis.virginia.gov); read October 26–30, 2026.

General information, not legal advice. ClosingCode is software; it is not a law firm or brokerage. This guide is not a substitute for the advice or services of an attorney.