No less than eight states have now banned all new private transfer fee covenants so far in 2011-- meaning that now more than half of all states ban or heavily restrict the fees.  The new state laws in many cases have legal implications regarding existing private transfer fee covenants as well.

Following is a list of states that have passed bans so far this year--

Arkansas: HB 1388, a bill to ban private transfer fees, was signed into law in February.  The bill bans all new private transfer fee covenants, and specifically states that the bill does not validate existing private transfer fee covenants, allowing homeowners an opening to challenge them.  “The Governor and Legislature stood up for Arkansas homeowners by protecting consumers from these for profit fees,” said Wes Lasseigne, Vice President of the Arkansas Land Title Association. “This bill is an important step in enhancing consumer protections and safeguarding a fragile real estate market from further abuse.”

Idaho: SB 1123, a bill banning real estate transfer fees, was signed into law on March 22nd.  The bill went into effect as of signing.  New private transfer fee covenants are now not binding and unenforceable, and anyone who creates a new private transfer fee covenant is subject to damages to the property owner.

Montana: SB 146, a bill declaring that all private transfer fee covenants are unenforceable, Was signed into law by the governor on April 21st.  The new law states that "A transfer fee covenant or any lien that is recorded or filed to enforce a transfer fee under a transfer fee covenant does not run with the title to real property and is not binding upon or enforceable at law or in equity against any subsequent owner, purchaser, or mortgagee of any interest in the real property as a covenant, an equitable servitude, or otherwise."

Nebraska:  The new Nebraska law imposes a ban on all new private transfer fees, puts in place penalties for recording new private transfer fee obligations, and requires full disclosure and other requirements for the enforcement of existing private transfer fees.  The new law took effect immediately when it was signed into law on March 10th.

North Dakota: SB 2149, a bill banning private transfer fee covenants, was signed into law by the Governor by the governor on April 25th.  The bill bans all future private transfer fee covenants, imposes possible civil penalties on any new filer of a private transfer fee covenant, and requires holders of existing private transfer fee obligations to file a notice document in the public records by the end of the year.  “The Governor and Legislature stood up for homeowners by protecting consumers from these predatory fees,” said Paula Bachmeier, Vice President North Dakota Land Title Association. “This bill is an important step in enhancing consumer protections, safeguarding the real estate market and protecting our property rights system in North Dakota.”

South Dakota: SB 70 was signed into law on March 8th.  It bans all private transfer fee covenants as of July 1st 2011. Existing transfer fee covenants as of that date are subject to a new filing requirement, to be filed by the end of the year.

Virginia:  Any new private transfer fee obligation recorded "shall 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"  Any new private transfer fees are "void and unenforceable."  The new law, which was signed by the Governor on March 26th, takes effect July 1st, 2011.

Washington: SB 5115 was signed by the governor on April 13th.  The bill bans all future private transfer fee covenants, and says that existing private transfer fee covenants are "not presumed valid and enforceable"-- leaving it to the courts to determine whether they are enforceable.  The law requires the beneficiary of the fee on any existing private transfer fee covenant to record before the end of 2011 a new document in the public records giving notice of the fee. Otherwise, the obligation to pay the fee is explicitly deemed unenforceable.