Texas · Property Code §§5.201–5.208Texas private transfer fees: what's void and what's allowed

Texas Property Code subchapter G, effective June 17, 2011, makes most private transfer fee obligations created on or after that date unenforceable against later owners and purchasers – including a lender to a later purchaser – and void. A private transfer fee is money payable on the transfer of an interest in real property (or for the right to transfer), created by a recorded declaration or covenant or by a written or unwritten agreement. The statute lists payments that are not private transfer fees: the purchase price (including a one-time additional payment for later appreciation); a broker's commission under a written agreement; interest and charges owed to a lender, including assumption and estoppel fees; rent and lease-related fees; payments to the holder of an option or right of first refusal for not exercising it; government recording fees; HOA and condominium dues, assessments and transfer-related fees, including resale certificate and estoppel fees, when no part is passed through to an outside third party (unless paid to the association or its manager); club membership transfer fees; payments to a 501(c)(3) or 501(c)(4) organization used to directly benefit the encumbered property; and Veterans' Land Board fees. Obligations created before the law had to be preserved by recording a notice by January 31, 2012, and a payee must accept a fee within 30 days of tender or lose it. A seller of property that may be subject to a private transfer fee obligation must give the buyer written notice that it may be governed by this subchapter; a waiver of the buyer's rights is void.