Tex. Prop. Code Section 5.202
Certain Private Transfer Fee Obligations Void


(a)

Except as provided by this subchapter, a private transfer fee obligation created on or after the effective date of this subchapter is not binding or enforceable against a subsequent owner or subsequent purchaser of an interest in real property and is void.

(b)

For purposes of this subchapter, the following payments are not considered private transfer fee obligations:

(1)

consideration paid by a purchaser to a seller for an interest in real property transferred, including, as applicable, a mineral interest transferred, including additional consideration paid to a seller for the property’s appreciation, development, or sale after the interest in the property has been transferred to the purchaser, if the additional consideration is paid only once and that payment does not bind successors in interest to the property to any private transfer fee obligation;

(2)

a commission paid to a licensed real estate broker under a written agreement between a seller or purchaser and the broker, including an additional commission for the property’s appreciation, development, or sale after the interest in property is transferred to the purchaser;

(3)

interest, a fee, a charge, or another type of payment to a lender under a loan secured by a mortgage on the property, including:

(A)

a fee payable for the lender’s consent to an assumption of the loan or transfer of the property subject to the mortgage;

(B)

a fee or charge payable for an estoppel letter or certificate;

(C)

a shared appreciation interest or profit participation; or

(D)

other consideration payable in connection with the loan;

(4)

rent, reimbursement, a fee, a charge, or another type of payment to a lessor under a lease, including a fee for consent to an assignment, sublease, encumbrance, or transfer of a lease;

(5)

consideration paid to the holder of an option to purchase an interest in property, or to the holder of a right of first refusal or first offer to purchase an interest in property, for waiving, releasing, or not exercising the option or right when the property is transferred to another person;

(6)

a fee payable to or imposed by a governmental entity in connection with recording the transfer of the property;

(7)

dues, a fee, a charge, an assessment, a fine, a contribution, or another type of payment under a declaration or other covenant or under law, including a fee or charge payable for a change of ownership entered in the records of an association to which this subdivision applies or an estoppel letter or resale certificate issued under Section 207.003 (Delivery of Subdivision Information to Owner) by an association to which this subdivision applies or the person identified under Section 209.004 (Management Certificates)(a)(6), provided that no portion of the fee or charge is required to be passed through to a third party designated or identifiable in the declaration or other covenant or law or in a document referenced in the declaration or other covenant or law, unless paid to:

(A)

an association as defined by Section 82.003 (Definitions) or 221.002 (Definitions) or the person or entity managing the association as provided by Section 82.116 (Management Certificate)(a)(5) or 221.032 (Timeshare Disclosure Statement)(b)(11), as applicable;

(B)

a property owners’ association as defined by Section 202.001 (Definitions) or 209.002 (Definitions) or the person or entity described by Section 209.004 (Management Certificates)(a)(6); or

(C)

a property owners’ association as defined by Section 202.001 (Definitions) that does not require an owner of property governed by the association to be a member of the association or the person or entity described by Section 209.004 (Management Certificates)(a)(6);

(8)

dues, a fee, a charge, an assessment, a fine, a contribution, or another type of payment for the transfer of a club membership related to the property;

(9)

dues, a fee, a charge, an assessment, a fine, a contribution, or another type of payment paid to an organization exempt from federal taxation under Section 501(c)(3) or 501(c)(4), Internal Revenue Code of 1986, only if the organization uses the payments to directly benefit the encumbered property by:

(A)

supporting or maintaining only the encumbered property;

(B)

constructing or repairing improvements only to the encumbered property; or

(C)

providing activities or infrastructure to support quality of life, including cultural, educational, charitable, recreational, environmental, and conservation activities and infrastructure, that directly benefit the encumbered property; or

(10)

a fee payable to or imposed by the Veterans’ Land Board for consent to an assumption or transfer of a contract of sale and purchase.

(c)

The benefit described by Subsection (b)(9)(C) may collaterally benefit:

(1)

a community composed of:

(A)

property that is adjacent to the encumbered property; or

(B)

property a boundary of which is not more than 1,000 yards from a boundary of the encumbered property; or

(2)

with respect to a payment to a school for educational activities, property not described by Subdivision (1) if the encumbered property is located within:

(A)

the school’s assigned attendance zone; and

(B)

a county with a population of more than 650,000 that is adjacent to two counties, each of which has a population of more than 1.8 million.

(d)

Notwithstanding Subsection (c), an organization may provide a direct benefit under Subsection (b)(9) if:

(1)

the organization provides to the general public activities or infrastructure described by Subsection (b)(9)(C);

(2)

the provision of activities or infrastructure substantially benefits the encumbered property; and

(3)

the governing body of the organization:

(A)

is controlled by owners of the encumbered property; and

(B)

approves payments for activities or infrastructure at least annually.

(e)

An organization may provide activities and infrastructure described by Subsection (b)(9)(C) to another organization exempt from federal taxation under Section 501(c)(3) or 501(c)(4), Internal Revenue Code of 1986, at no charge for de minimis usage without violating the requirements of this section.
Added by Acts 2011, 82nd Leg., R.S., Ch. 211 (H.B. 8), Sec. 1, eff. June 17, 2011.
Amended by:
Acts 2017, 85th Leg., R.S., Ch. 812 (H.B. 755), Sec. 1, eff. September 1, 2017.

Source: Section 5.202 — Certain Private Transfer Fee Obligations Void, https://statutes.­capitol.­texas.­gov/Docs/PR/htm/PR.­5.­htm#5.­202 (accessed Jun. 5, 2024).

5.001
Fee Simple
5.002
Failing as a Conveyance
5.003
Partial Conveyance
5.004
Conveyance by Authorized Officer
5.005
Aliens
5.006
Attorney’s Fees in Breach of Restrictive Covenant Action
5.007
Vendor and Purchaser Risk Act
5.008
Seller’s Disclosure of Property Condition
5.009
Duties of Life Tenant
5.010
Notice of Additional Tax Liability
5.011
Seller’s Disclosure Regarding Potential Annexation
5.012
Notice of Obligations Related to Membership in Property Owners’ Association
5.013
Seller’s Disclosure of Location of Conditions Under Surface of Unimproved Real Property
5.014
Notice of Obligations Related to Public Improvement District
5.015
Prohibited Fees
5.016
Conveyance of Residential Property Encumbered by Lien
5.019
Notice of Water Level Fluctuations
5.020
Easements Restricting Possession of Firearms or Alcoholic Beverages Prohibited
5.021
Instrument of Conveyance
5.022
Form
5.023
Implied Covenants
5.024
Encumbrances
5.025
Wood Shingle Roof
5.026
Discriminatory Provisions
5.027
Correction Instruments: Generally
5.028
Correction Instruments: Nonmaterial Corrections
5.029
Correction Instruments: Material Corrections
5.030
Correction Instrument: Effect
5.041
Future Estates
5.042
Abolition of Common-law Rules
5.043
Reformation of Interests Violating Rule Against Perpetuities
5.061
Definition
5.062
Applicability
5.063
Notice
5.064
Seller’s Remedies on Default
5.065
Right to Cure Default
5.066
Equity Protection
5.067
Placement of Lien for Utility Service
5.068
Foreign Language Requirement
5.069
Seller’s Disclosure of Property Condition
5.070
Seller’s Disclosure of Tax Payments and Insurance Coverage
5.071
Seller’s Disclosure of Financing Terms
5.072
Oral Agreements Prohibited
5.073
Contract Terms, Certain Waivers Prohibited
5.074
Purchaser’s Right to Cancel Contract Without Cause
5.076
Recording Requirements
5.077
Annual Accounting Statement
5.078
Disposition of Insurance Proceeds
5.079
Title Transfer
5.080
Liability for Disclosures
5.081
Right to Convert Contract
5.082
Request for Balance and Trustee
5.083
Right to Cancel Contract for Improper Platting
5.084
Right to Deduct
5.085
Fee Simple Title Required
5.087
Additional Provisions: Certain Counties
5.0141
Notice Required Before Contract Execution
5.0142
Purchaser Signature Required
5.0143
Recording of Notice at Closing
5.0144
Reliance on Filed Service Plan
5.0145
Suits for Damages
5.151
Disclosure in Offer to Purchase Mineral Interest
5.152
Certain Purchases of Mineral or Royalty Interests Void
5.201
Definitions
5.202
Certain Private Transfer Fee Obligations Void
5.203
Notice Requirements for Continuation of Existing Private Transfer Fee Obligations
5.204
Additional Compliance Requirement: Timely Acceptance of Fees Paid Under Existing Private Transfer Fee Obligations
5.0205
Equitable Interest Disclosure
5.205
Disclosure of Existing Transfer Fee Obligation Required in Contract for Sale
5.206
Waiver Void
5.207
Injunctive or Declaratory Relief
5.0261
Removal of Discriminatory Provision from Recorded Conveyance Instrument
5.0621
Construction with Other Law
5.0622
Additional Applicability: Certain Counties

Accessed:
Jun. 5, 2024

§ 5.202’s source at texas​.gov