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TechGromit
2010 Mar 10, 7:15am
Q 12. What are the seller disclosure requirements for PTFs?
A. In addition to the above-described requirements for the recipient of the fee (usually the developer), under the new law, for all transfers which occur after December 31, 2007, sellers will have a duty to disclose certain information about PTFs on a separate disclosure statement at the same time the Transfer Disclosure Statement (TDS) is provided (Cal. Civ. Code § 1102.6e.)
This disclosure statement must include the following information: (1) notice of the required transfer fee; (2) the amount of the fee and basis for calculating the amount; (3) the entity to whom this fee will be paid; (4) the purposes for which the fee will be used; (5) the date such fee expires, if any; and (6) a notice that the final amount may be different if the fee is based on a percentage of the sales price (Cal. Civ. Code § 1102.6e.)
The above law applys only to California.
(1) notice of the required transfer fee
A Private Transfer Tax is required
(2) the amount of the fee and basis for calculating the amount
1.5% of the final sales price of the property
(3) the entity to whom this fee will be paid
TechGromit
(4) the purposes for which the fee will be used
To Allow TechGromit to get richer everytime the house is sold. This clause was inserted cause almost no one reads and understands what they are signing first. An alternative name for the Private Transfer Tax is a Idiot tax.
(5) the date such fee expires, if any
Never, If Techgromit is desceased, then the payment is transfered to his heirs.
(6) a notice that the final amount may be different if the fee is based on a percentage of the sales price
elliemae
2010 Mar 10, 12:23pm
The Utah Governor is supposed to make this illegal, but it won't be effective retroactively.
The transfer tax is unethical - but we're talking developers and builders and realtors. Not exactly the best friend of ethics. I agree that we shouldn't sign these contracts, but the average joe & jane won't understand the transfer tax. They certainly won't have a choice if they want that particular property, unless someone can come up with a creative way around it.
I'm sure that there are lawyers working on that at this very moment. Hope so.
grywlfbg
2010 Mar 10, 3:00pm
This just seems ridiculous. How can the original developer enforce a contract on someone who never signed it? I though the only encumbrances that survive a title transfer are property taxes.
If I'm the second owner, I never signed a contract w/ the developer so how can they possibly have any kind of claim on MY house. When I buy the house I'll just have it spelled out in the contract that the fee/tax is terminated. Let them try to collect it from the first owner. Screw that.
Â¥
2010 Mar 10, 3:37pm
I though the only encumbrances that survive a title transfer are property taxes.
Nope. CC&Rs run with the land (if they're in the deed).
elliemae
2010 Mar 10, 10:14pm
What Troy said. Land contracts are always "subject to" rights of way, previous encumbrances such as CC&R's, etc. When you sign the deed, you are accepting the home subject to it all.
grywlfbg
2010 Mar 11, 12:59am
Yippee. More of that "financial innovation" Americans are so famous for. We're doomed.
http://www.housingwatch.com/2010/03/08/developers-embrace-new-flip-tax/?source=patrick.net
Reading the above article, I was suprised to learn of yet another way that someone is trying to screw you out of more of your money. In this case, there is a fee added to the closing costs, where someone is paid a percentage of the sale every time the property is sold. (generally anywhere from .25% to 1.75% of the sale price). In the above article, it's used to make more money for the original developers of the property, but there really isn't any law preventing an existing homeowners from sneaking the clause into a sales contract when they sell there house. What I would like to know is how this is disclosed? Would this show up on a title search? Disclosed as a condition when the original sales contract is signed. I know when I make an offer on a house in a development that had a homeowners association I had 10 days to look over the rules (it was a 300 page book no less) to opt out of the contract. (They countered offered for more money and 5 days, which I said forget it). I for one do not want to informed of this fee when reaching the settlement table. I want to know well before hand so I can tell them to forget it before I invest too much of my time and money.
If we all refuse to sign a contract that has this clause in it, it will not take builders too long to remove it entirely. (assuming that the first purchasers of the house fight it) If builders can't sell any houses, they will be forced to remove the clause.
#housing