Section 35-4-431
Definitions.
(a) As used in this article, the following words have the following meanings:
(1) ASSOCIATION. An association or unit owners' association, as defined in Section 35-8A-103 of the Alabama Uniform Condominium Act of 1991; an association as defined in Section 35-8-2 of the Condominium Ownership Act; or a nonprofit or cooperative membership organization composed exclusively of owners of mobile homes, manufactured housing, time-shares, camping resort interests, or other interests in real property that is responsible for the maintenance, improvements, services, or expenses related to real property that is owned, used, or enjoyed in common by the members.
(2) PAYEE. The person or entity who claims the right to receive or collect a private transfer fee payable under a private transfer obligation. A payee may or may not have a pecuniary interest in the private transfer fee obligation.
(3) PRIVATE TRANSFER FEE. A fee or charge payable upon the transfer of an interest in real property, or payable for the right to make or accept such transfer, regardless of whether the fee or charge is a fixed amount or is determined as a percentage of the value of the property, the purchase price, or other consideration given for the transfer. The following are not private transfer fees for purposes of this article:
a. Any consideration payable by the grantee to the grantor for the interest in real property being transferred, including any subsequent additional consideration for the property payable by the grantee based upon any subsequent appreciation, development, or sale of the property, if such additional consideration is payable on a one-time basis only and the obligation to make such payment does not bind successors in title to the property. For the purposes of this paragraph, an interest in real property may include a separate mineral estate and its appurtenant surface access rights.
b. Any commission payable to a licensed real estate broker for the transfer of real property pursuant to an agreement between the broker and the grantor or the grantee, including, but not limited to, any subsequent additional commission for that transfer payable by the grantor or the grantee based upon any subsequent appreciation, development, or sale of the property.
c. Any interest, charges, fees, or other amounts payable by a borrower to a lender pursuant to a loan secured by a mortgage against real property, including, but not limited to, any fee payable to the lender for consenting to an assumption of the loan or a transfer of the real property subject to the mortgage, any fees or charges payable to the lender for estoppel letters or certificates, and any shared appreciation interest or profit participation or other consideration and payable to the lender in connection with the loan.
d. Any rent, reimbursement, charge, fee, or other amount payable by a lessee to a lessor under a lease, including, but not limited to, any fee payable to the lessor for consenting to an assignment, subletting, encumbrance, or transfer of the lease.
e. Any consideration payable to the holder of an option to purchase an interest in real property or the holder of a right of first refusal or first offer to purchase an interest in real property for waiving, releasing, or not exercising the option or right upon the transfer of the real property to another person.
f. Any tax, fee, charge, assessment, fine, or other amount payable to or imposed by a governmental authority.
g. Any fee, charge, assessment, dues, fine, contribution, or other amount payable to a homeowners', condominium, cooperative, mobile home, or property owners' association pursuant to a declaration or covenant or law applicable to such association, including, but not limited to, fees or charges payable for estoppel letters or certificates issued by the association or its authorized agent.
h. Any fee, charge, assessment, dues, fine, contribution, or other amount imposed by a declaration or covenant encumbering real property, and payable solely to a nonprofit or charitable organization for the purpose of supporting cultural, educational, charitable, recreational, environmental, conservation, or other similar activities benefitting the real property subject to the declaration or covenant or the community in which such real property is located.
i. Any fee, charge, assessment, dues, fine, contribution, or other amount pertaining solely to the purchase or transfer of a club membership relating to real property owned by the member, including, but not limited to, any amount determined by reference to the value, purchase price, or other consideration given for the transfer of the real property.
(4) PRIVATE TRANSFER FEE OBLIGATION. An obligation arising under a declaration or covenant recorded against the title to real property, or under any other contractual agreement or promise, whether or not recorded, that requires or purports to require the payment of a private transfer fee upon a subsequent transfer of an interest in the real property.
(5) TRANSFER. The sale, gift, conveyance, assignment, inheritance, or other transfer of an ownership interest in real property located in this state.
Section 35-4-432
Prohibition.
A private transfer fee obligation recorded or entered into in this state on or after May 25, 2011, does not run with the title to real property and is not binding on or enforceable at law or in equity against any subsequent owner, purchaser, or mortgagee of any interest in real property as an equitable servitude or otherwise. Any private transfer fee obligation that is recorded or entered into in this state on or after May 25, 2011, is void and unenforceable. This section does not create a presumption that a private transfer fee obligation recorded or entered into in this state before May 25, 2011, is valid and enforceable.
(Act 2011-260, p. 474, §1.)
Section 35-4-433
Liability for violations.
(a) Any person who records or enters into an agreement imposing a private transfer fee obligation in his or her favor after May 25, 2011, shall be liable for:
(1) Any and all damages resulting from the imposition of the private transfer fee obligation on the transfer of an interest in the real property, including, but not limited to, the amount of any transfer fee paid by a party to the transfer.
(2) All attorney fees, expenses, and costs incurred by a party to the transfer or mortgagee of the real property to recover any private transfer fee paid or in connection with an action to quiet title.
(b) Where an agent acts on behalf of a principal to record or secure a private transfer fee obligation, liability shall be assessed to the principal, rather than the agent.
(Act 2011-260, p. 474, §1.)
Section 35-4-434
Disclosure.
(a) Any contract for the sale of real property subject to a private transfer fee obligation shall include a provision disclosing the existence of that obligation, a description of the obligation, and a statement that private transfer fee obligations are subject to certain prohibitions under this article. A contract for sale of real property which does not conform to the requirements of this section is not enforceable by the seller against the buyer, nor is the buyer liable to the seller for damages under such a contract, and the buyer under the contract is entitled to the return of all deposits made in connection with the sale of the real property.
(b) Where a private transfer fee obligation is not disclosed under subsection (a) and a buyer subsequently discovers the existence of the private transfer fee obligation after title to the property has passed to the buyer, the buyer has the right to recover both:
(1) Any and all damages resulting from the failure to disclose the private transfer fee obligation, including, but not limited to, the amount of any private transfer fee paid by the buyer, or the difference between:
a. The market value of the real property if it were not subject to a private transfer fee obligation.
b. The market value of the real property as subject to a private transfer fee obligation.
(2) All attorney fees, expenses, and costs incurred by the buyer in seeking the buyer's remedies under this subsection.
(c) Any provision in a contract for sale of real property that purports to waive the rights of a buyer under this section is void.
(d) A real estate licensee shall have no duty to discover the existence of any private transfer fee obligation.
(Act 2011-260, p. 474, §1.)