Freehold Capital Partners Promotes National Disclosure Standard for Private Transfer Fees

NEW YORK, Sept. 29 /PRNewswire-USNewswire/ -- Today, Freehold Capital Partners reiterated its support for an alternative to the current guidance under review by the Federal Housing Finance Agency (FHFA) that seeks to restrict Fannie Mae and Freddie Mac from insuring mortgages on property that is encumbered by private transfer fees (PTFs).  Freehold, the nation's leader in helping real estate developers utilize PTFs, is advocating for a national disclosure standard requiring the inclusion of a stand-alone disclosure form to be filed in the office of the public records for the buyer to sign at the time of closing.  

"Disclosure is the key to making private transfer fees work," said Bryan J. Cohen, Esq., General Counsel and Executive Vice President of Freehold Capital Partners.  "The concerns people have expressed are fully relieved by the type of prominent disclosure form that we have made standard practice for our company, and all entities that use PTFs should be equally vigilant in their disclosure."  

Freehold uses a form that is prominently titled "NOTICE OF TRANSFER FEE" in bold 14-point font on the top of the first page. The company believes that all private transfer fees should be disclosed in a similar fashion to avoid any possible confusion by buyers, sellers, realtors and title companies.  A similar disclosure standard was adopted by the state of California, under California Civil Code 1098.5, when that legislature considered this issue.  

In January 2010, Freehold entered into an agreement with Fidelity National Title Group, under which Fidelity agreed to provide title insurance on properties with PTFs.  This agreement would not have been possible without the disclosure standard Freehold has set for PTFs that insures parties are properly informed of the encumbrance.  

Clear and prominent disclosure ensures that the future obligation is easily discoverable through ordinary diligence; that homebuyers and sellers are knowledgeable and take the fees into account in their negotiations for a fair sales price; and that those entitled to the fee's income stream – including homeowner associations, developers, investors and community non-profits – all are paid in a timely manner.

SOURCE Freehold Capital Partners

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