The Federal Housing Finance Agency (“FHFA”) has changed its proposed rule. As you will recall, FHFA had proposed a rather sweeping rule which called into question the ability of common interest communities to collect transfer fees, capital contributions or similar one-time assessments when a property is transferred. CAI weighed in heavily on this subject matter, pointing out the negative effects of such a rule. The result is that FHFA has revised the proposed rule.
FHFA has determined to propose a rule with a narrower focus. . . . In summary, the principal differences between the proposed guidance and the proposed rule are:
1. FHFA proposes to except from the rule private transfer fees that are paid to homeowners’ associations and similar associations, and to tax-exempt non- profit organizations, where the fees are used for the direct benefit of the encumbered properties.
2. FHFA proposes to make the rule prospective in effect, so that it applies to private transfer fee covenants created after the publication date of this proposed rule.
3. FHFA allows an implementation period of 120 days for the regulated entities.
The public participation was crucial to getting the FHFA to change its proposed rule. More than 4,210 comment letters were sent to the FHFA. This included comments from CAI and numerous homeowners, cooperative, and condominium associations; individuals living within such associations; community associations; and other nonprofit organizations.
Tarley Robinson, PLC, Attorneys and Counsellors at Law
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