SB417 Alabama 2010 Session

Summary

Primary Sponsor

Zeb Little

Democrat

Co-Sponsor

George M. “Marc” Keahey

Session

Regular Session 2010

Title

Fee covenants, transfer fee covenants prohibited, Prohibition Against Transfer Fee Covenants Act, Sec. 35-4-77 added

Summary

The bill would ban transfer fee covenants on Alabama real property, voiding such covenants and any related liens recorded after it takes effect (with environmental covenants exempted).

What This Bill Does

It adds a prohibition on transfer fee covenants and defines related terms. It prohibits recording of transfer fee covenants; covenants recorded on or after the act’s effective date would not run with the title and would not bind future owners, and any liens to secure such fees would be void, while covenants recorded before the effective date are not presumed valid or enforceable. It also lists several charges that are not transfer fees (including broker commissions, lender charges, government taxes, HOA fees, club memberships, and environmental covenants) and explicitly states environmental covenants are not transfer fees. The act becomes effective immediately after passage and governor approval.

Who It Affects

• Property buyers and current property owners would be protected from transfer fee covenants; new transfer fee covenants could not be recorded and would not bind future owners.
• Banks, lenders, licensed real estate brokers, homeowners associations, and other parties involved in property transfers would see that many standard charges are not considered transfer fees under this law.

Key Provisions

• Prohibits transfer fee covenants and adds 35-4-77 to define terms related to transfer fees and covenants.
• Environmental covenants are not transfer fees.
• Definitions included for: environmental covenant, transfer, and transfer fee.
• Not-transfer-fee exceptions include: immediate grantee consideration, broker commissions, lender-related charges, lease-related charges, option/right waiver payments, government taxes/fees, HOA/association fees, club membership fees, and environmental covenant payments.
• A transfer fee covenant recorded on or after the effective date is void, not binding on future owners, and liens securing such fees are void.
• Covenants recorded before the effective date are not automatically valid or enforceable.
• Effective date is immediately after passage and governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Property, Real and Personal