Committee backs bill to treat refiled transfer-fee records as wrongful liens
February 12, 2026 | 2026 Utah Legislature, Utah Legislature, Utah Legislative Branch, Utah
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A Utah Senate Business and Labor Committee voted unanimously Feb. 12 to favorably recommend First Substitute Senate Bill 196, which would allow homeowners to challenge certain refiled transfer-fee covenants as wrongful liens.
Court Ashton of the Utah Land Title Association told the committee the bill targets transfer-fee covenants recorded between about 2007 and 2010 that the Legislature outlawed in 2010 but which some holders later tried to revive by rerecording notices. "We're calling them zombie transfer fee covenants," Ashton said, arguing that the re-recorded notices are appearing in title records and can lead homeowners to pay fees to parties who no longer have enforceable claims.
The substitute clarifies that the measure is aimed at transfer-fee—not reinvestment-fee—covenants and would treat an attempted enforcement where the covenant was rescinded, extinguished by foreclosure, or where required recordings were never filed as a wrongful lien that a homeowner can bring before a court. The committee also adopted a technical Amendment No. 1, which adds clarifying language about the ‘‘absence of a previously recorded notice required by the section.’'
Members asked about scenarios in which a covenant might already be unenforceable due to clerical or filing errors; Ashton said the bill is intended to cover three common fact patterns (withdrawn covenants, covenants cut off by foreclosure, and covenants for which required notices were never filed). After brief discussion the committee replaced the bill with the first substitute, approved the amendment and then moved the measure out of committee by a 5–0 voice vote.
The bill’s sponsor and Utah Land Title Association representatives framed the change as a title‑record and consumer‑protection fix to prevent renewed claims on properties where the fee holder lacks an enforceable claim.
The committee did not take public testimony on the item and did not reference a specific statute in committee testimony.
Court Ashton of the Utah Land Title Association told the committee the bill targets transfer-fee covenants recorded between about 2007 and 2010 that the Legislature outlawed in 2010 but which some holders later tried to revive by rerecording notices. "We're calling them zombie transfer fee covenants," Ashton said, arguing that the re-recorded notices are appearing in title records and can lead homeowners to pay fees to parties who no longer have enforceable claims.
The substitute clarifies that the measure is aimed at transfer-fee—not reinvestment-fee—covenants and would treat an attempted enforcement where the covenant was rescinded, extinguished by foreclosure, or where required recordings were never filed as a wrongful lien that a homeowner can bring before a court. The committee also adopted a technical Amendment No. 1, which adds clarifying language about the ‘‘absence of a previously recorded notice required by the section.’'
Members asked about scenarios in which a covenant might already be unenforceable due to clerical or filing errors; Ashton said the bill is intended to cover three common fact patterns (withdrawn covenants, covenants cut off by foreclosure, and covenants for which required notices were never filed). After brief discussion the committee replaced the bill with the first substitute, approved the amendment and then moved the measure out of committee by a 5–0 voice vote.
The bill’s sponsor and Utah Land Title Association representatives framed the change as a title‑record and consumer‑protection fix to prevent renewed claims on properties where the fee holder lacks an enforceable claim.
The committee did not take public testimony on the item and did not reference a specific statute in committee testimony.
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