I 
111TH CONGRESS 
2D SESSION 
H. R. 6260 
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. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 29, 2010 
Ms. WATERS (for herself, Mr. SHERMAN, Ms. MOORE of Wisconsin, Mr. CLAY, 
Mr. SIRES, and Mr. MILLER of North Carolina) introduced the following 
bill; which was referred to the Committee on Financial Services 
A BILL 
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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Homeowner Equity 
Protection Act of 2010’’. 
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SEC. 2. PROHIBITION ON TRANSFER FEES AND COV-
ENANTS. 
(a) PROHIBITION.—The Real Estate Settlement Pro-
cedures 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 COV-
ENANTS. 
‘‘(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 im-
posed 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 se-
cure 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 provi-
sion of State law or regulation that imposes more strin-
gent 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: 
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‘‘(1) COVERED ASSOCIATION.—The term ‘cov-
ered association’ means a nonprofit, mandatory 
membership organization comprised of owners of 
homes, condominiums, cooperatives, manufactured 
homes, or any interest in real property, created pur-
suant to a declaration, covenant, or other applicable 
law. 
‘‘(2) STATE.—The term ‘State’ means the 
States of the United States, the District of Colum-
bia, 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 trans-
fer of an interest in the real property. 
‘‘(4) TRANSFER FEE.—The term ‘transfer fee’ 
means a fee or charge imposed by a transfer fee cov-
enant, except that such term shall not include any 
tax, assessment, fee, or charge imposed by a govern-
mental authority pursuant to applicable laws, regula-
tions, or ordinances. 
‘‘(5) TRANSFER FEE COVENANT.— 
‘‘(A) IN GENERAL.—The term ‘transfer fee 
covenant’ means a provision in a document re-
lating to the transfer of specified residential 
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real property located in any State and designed 
principally for the occupancy of from one to 
four families, whether recorded or not and how-
ever 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 trans-
feror 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 con-
tract, option, mortgage, security agree-
ment, 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 agree-
ment, an amount determined by the agree-
ment, if such amount— 
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pel letters or certificates issued by the cov-
ered association or its authorized agent; or 
‘‘(iv) any provision of a document re-
quiring payment of a fee or charge to an 
organization described in paragraph (3) or 
(4) of section 501(c) of the Internal Rev-
enue 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. 
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‘‘(3) ACTIONS BY SECRETARY AND STATE OFFI-
CIALS.—The Secretary, the Attorney General of any 
State, or the insurance commissioner of any State 
may bring an action to enjoin violations of this sec-
tion. 
‘‘(4) COURT COSTS AND ATTORNEYS FEES.—In 
any private action brought pursuant to this sub-
section, the court may award to the prevailing party 
the court costs of the action together with reason-
able 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. 
Æ 
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