Bill to limit transfer fees founders
A bill that would have placed restrictions on private transfer fees -- which pass along to subsequent buyers of a home some of the costs the builders incurred to get the project approved -- was shot down Tuesday by a California Senate committee.
Senate Bill 670, sponsored by state Sen. Lou Correa (D-Santa Ana) and supported by the California Assn. of Realtors, originally sought to prohibit the fees, which range from about 0.05% to 1.75% of the purchase price of a home and must be paid every time a home is resold.
The amended version of the bill would have limited the use of transfer-tax funds to facilities or services providing a public benefit in the same county or within 25 miles of the development imposing the fees and would have capped the fees at 1%. It also would have required that the fees be imposed for no longer than 30 years, or until a particular dollar amount had been raised, whichever came first.
“We are extremely disappointed that SB 670 failed make it out of committee ...” said Colleen Badagliacco, president of the statewide Realtors group. “Home buyers in California deserve better.”
Among other things, the Realtors association objected to lax oversight of the fees process.
Builders use the fees to fulfill promises they make to local governments and environmental groups early in the approval process, such as preserving wetlands, creating green space or funding affordable housing.
The bill’s opponents argued that the fees are a mechanism by which builders are able to meet all the demands placed on them and finance the costs, as well as help pay for quality-of-life amenities that benefit whole communities.
The legislation was defeated by the Senate Transportation and Housing Committee.
Assembly Bill 980, however, which would require that private transfer fees be clearly disclosed to prospective home buyers, passed the Assembly Judiciary Committee on Tuesday.
The bill is expected to go before the full Assembly for passage within the next two weeks.
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