DID YOU KNOW? #1

DID YOU KNOW?

Subject: Transfer Fee Rights

We have probably all heard that a title is composed of a bundle of rights. We are familiar with the fee simple title to real estate, and we understand that the title could be subject to easements, mortgages, restrictions, leases, mining rights and numerous other rights and interests. But, have you heard of a Transfer Fee Right?

We wanted to alert you to a scheme currently in operation in Texas by Freehold Development, Inc. to market “Transfer Fee Rights”. Marketing materials describe the “Transfer Fee Right” as an owner’s right to recapture the future value of the improvements made to his/her property. According to Freehold Development, Inc., “there is the present value and the future income value of your improvements and under the current outdated system, you are not being compensated for this future value when you sell.”

How does it work? By the use of a recorded Declaration of Covenants, Conditions and Restrictions, property owners are being encouraged to encumber their property with a covenant that will require payment to the owner of a sum equal to one percent (1%) of the gross sales price of the property with each non-exempt transfer of all or part of the property. With this use of the covenant, every time the property is sold, the closing agent will have the responsibility to collect the transfer fee and remit the fee directly to the property owner. The marketing scheme also allows realtors’ commissions.

For more information, a website is available at www.FreeholdDevelopment.net.



First Tipton Title Company, LLC is a registered agent of Fidelity National Title Insurance Company and will publish the “DID YOU KNOW” mailings on a semi-regular basis.