Managing Money :: Developers’ private transfer fees

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Released: March 06, 2010

Developers’ private transfer fees

Source: Kenneth R. Harney, Washington Post (Free Registration)

How about this for a new and ingenious real estate money machine? Every time a house sells during the next 99 years, 1 percent of the price goes back to the original developer or is shared among investor partners. Ka-ching!

The levy won’t be subject to haggling between future buyers and sellers, either. That’s because it’s a covenanted mandate - a novel type of lien on the underlying real estate - called a private transfer fee.

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