HB536 Summary

• Prohibits the recording of transfer fee covenants in Alabama, establishing them as violations of public policy that impair property marketability and constitute unreasonable restraints on alienation.

• Declares that transfer fee covenants recorded on or after the effective date do not run with title and are not binding or enforceable against subsequent owners, purchasers, or mortgagees.

• Voids and makes unenforceable any liens securing payment of transfer fees under covenants recorded after the effective date, without creating presumptions about pre-existing recorded covenants.

• Exempts from the definition of transfer fees: direct consideration between parties, real estate commissions, mortgage-related fees, lease payments, option/right of first refusal considerations, governmental charges, homeowners association fees, club membership fees, and environmental covenant payments.

• Takes effect immediately upon passage and approval by the Governor.