To amend the Real Estate Settlement Procedures Act of 1974 to prohibit certain transfer fees and covenants in connection with the sale of real property.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Homeowner Equity Protection Act of 
2010''.

SEC. 2. PROHIBITION ON TRANSFER FEES AND COVENANTS.

    (a) Prohibition.--The Real Estate Settlement Procedures Act of 1974 
is amended by inserting after section 12 (12 U.S.C. 2610) the following 
new section:

``SEC. 13. PROHIBITION ON TRANSFER FEES AND COVENANTS.

    ``(a) Transfer Fee Covenants After Effective Date.--No person shall 
demand or accept a transfer fee pursuant to a transfer fee covenant 
that is recorded in any State if the transfer for which the transfer 
fee is imposed involves a federally related mortgage loan and such 
transfer occurs after the effective date under section 3 of the 
Homeowner Equity Protection Act of 2010. No person shall enforce or 
seek to enforce any lien purporting to secure the payment of a transfer 
fee pursuant to a transfer fee covenant recorded in any State in 
connection with any transfer involving a federally related mortgage 
loan if such transfer occurs after such effective date.
    ``(b) Coordination With State Law.--No provision of State law or 
regulation that imposes more stringent limitations on transfer fees or 
transfer fee covenants shall be construed as being inconsistent with 
this section.
    ``(c) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Covered association.--The term `covered association' 
        means a nonprofit, mandatory membership organization comprised 
        of owners of homes, condominiums, cooperatives, manufactured 
        homes, or any interest in real property, created pursuant to a 
        declaration, covenant, or other applicable law.
            ``(2) State.--The term `State' means the States of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, and any other territory or possession of the 
        United States.
            ``(3) Transfer.--The term `transfer' means, with respect to 
        real property, the sale, gift, grant, conveyance, assignment, 
        inheritance, or other transfer of an interest in the real 
        property.
            ``(4) Transfer fee.--The term `transfer fee' means a fee or 
        charge imposed by a transfer fee covenant, except that such 
        term shall not include any tax, assessment, fee, or charge 
        imposed by a governmental authority pursuant to applicable 
        laws, regulations, or ordinances.
            ``(5) Transfer fee covenant.--
                    ``(A) In general.--The term `transfer fee covenant' 
                means a provision in a document relating to the 
                transfer of specified residential real property located 
                in any State and designed principally for the occupancy 
                of from one to four families, whether recorded or not 
                and however denominated, that--
                            ``(i) purports to run with the land or bind 
                        current owners of, or successors in title to 
                        such real property; and
                            ``(ii) obligates a transferee or transferor 
                        of all or part of the property to pay a fee or 
                        charge to a third person upon transfer of an 
                        interest in all or part of the property, or in 
                        consideration for permitting any such transfer.
                    ``(B) Exclusions.--Such term shall not include--
                            ``(i) any provision of a purchase contract, 
                        option, mortgage, security agreement, real 
                        property listing agreement, or other agreement 
                        that obligates one party to the agreement to 
                        pay the other, as full or partial consideration 
                        for the agreement or for a waiver of rights 
                        under the agreement, an amount determined by 
                        the agreement, if such amount--
                                    ``(I) is payable on a one-time 
                                basis only upon the next transfer of an 
                                interest in the specified real property 
                                and, once paid, shall not bind 
                                successors in title to the property;
                                    ``(II) constitutes a loan 
                                assumption or similar fee charged by a 
                                lender holding a lien on the property; 
                                or
                                    ``(III) constitutes a fee or 
                                commission paid to a licensed real 
                                estate broker for brokerage services 
                                rendered in connection with the 
                                transfer of the property for which the 
                                fee or commission is paid;
                            ``(ii) any provision in a deed, memorandum, 
                        or other document recorded for the purpose of 
                        providing record notice of an agreement 
                        described in clause (i);
                            ``(iii) any provision of a document 
                        requiring payment of a fee, charge, assessment, 
                        dues, fine, contribution, or other amount 
                        payable to a covered association pursuant to a 
                        declaration or covenant or law applicable to 
                        such covered association, including fees or 
                        charges payable for estoppel letters or 
                        certificates issued by the covered association 
                        or its authorized agent; or
                            ``(iv) any provision of a document 
                        requiring payment of a fee or charge to an 
                        organization described in paragraph (3) or (4) 
                        of section 501(c) of the Internal Revenue Code 
                        of 1986, to be used exclusively to support 
                        cultural, educational, charitable, 
                        recreational, environmental, conservation, or 
                        other similar activities benefitting the real 
                        property affected by the provision or the 
                        community of which the property is a part.
    ``(d) Remedies.--
            ``(1) Penalties.--Any person or persons who violate this 
        section shall be fined not more than $10,000 or imprisoned for 
        not more than one year, or both.
            ``(2) Joint and several liability; treble damages.--Any 
        person or persons who violate the prohibitions or limitations 
        of this section shall be jointly and severally liable to the 
        person or persons charged for the transfer fee involved in the 
        violation in an amount equal to three times the amount of any 
        such transfer fee involved.
            ``(3) Actions by secretary and state officials.--The 
        Secretary, the Attorney General of any State, or the insurance 
        commissioner of any State may bring an action to enjoin 
        violations of this section.
            ``(4) Court costs and attorneys fees.--In any private 
        action brought pursuant to this subsection, the court may award 
        to the prevailing party the court costs of the action together 
        with reasonable attorneys fees.''.
    (b) Jurisdiction of Courts.--Section 16 of the Real Estate 
Settlement Procedures Act of 1974 (12 U.S.C. 2614) is amended by 
striking ``or 9'' each place such term appears and inserting ``, 9, or 
13''.

SEC. 3. EFFECTIVE DATE.

    The amendment made by section 2 shall take effect upon the 
expiration of the 90-day period beginning on the date of the enactment 
of this Act.

Summary: Homeowner Equity Protection Act of 2010 - Amends the Real Estate Settlement Procedures Act of 1974 to prohibit any person from demanding or accepting a transfer fee pursuant to a transfer fee covenant recorded in any state if the transfer for which such fee is imposed involves a federally related mortgage loan and the transfer occurs after the expiration of the 90-day period beginning on the date of the enactment of this Act. Prohibits enforcement of a lien purporting to secure the payment of such a fee. Defines a transfer fee covenant as a provision in a document relating to the transfer of specified residential real property designed principally for the occupancy of from one to four families, whether recorded or not and however denominated, that: (1) purports to run with the land or bind current owners of, or successors in title to such real property. And (2) obligates a transferee or transferor of all or part of the property to pay a fee or charge to a third person upon transfer of an interest in all or part of the property, or in consideration for permitting any such transfer. Imposes civil and criminal penalties, including liability for treble damages, for violation of this Act. Allows an action pursuant to this Act to be brought in the US district court, or in any other court of competent jurisdiction, for the district in which the property involved is located.