Committee approves measure to help homeowners remove improperly refiled private transfer-fee liens

The House Political Subdivisions Committee unanimously adopted and recommended favorably a second substitute to Senate Bill 196, a measure designed to help homeowners clear private transfer-fee covenants that have been improperly re-recorded.

Court Ashton, speaking for the Utah Land Title Association, told the committee that private transfer-fee covenants created by former owners around 2007 can surface at closing if holders re-record or fail to meet prior statutory notice requirements. "These covenants provide no benefit to homeowners or communities," Ashton said, and SB196 would treat improperly revived transfer-fee instruments as wrongful liens so homeowners could remove them from title records.

Ashton and Senator Ibsen said the measure corrects drafting errors in earlier drafts and does not affect reinvestment-fee covenants used by homeowners associations. Committee members asked whether pre-2010 fees were grandfathered; Ashton explained earlier legislative steps: 2010 forbade new transfer fees going forward but allowed pre-2010 fees to survive only with required notice, and a 2024 law required re-filing every three years to keep certain liens alive. The substitute targets situations where holders failed to keep those interests alive yet attempt to reassert them.

Representative Walter noted the practical harm when a buyer or seller is surprised at closing by a record lien; he moved adoption and recommendation and the committee acted unanimously to substitute and then recommend the measure favorably.