Private Transfer Fees in Nevada: What Question 15 and AB 271 Mean for Sellers

Quick Takeaways

• A private transfer fee is a title-imposed fee triggered on every resale, typically around 1% of the sale price, running for decades.
• Nevada banned new private transfer fee obligations with AB 271, signed into law on May 20, 2011.
• Question 15 on the Nevada Seller's Real Property Disclosure form asks whether the property is subject to a private transfer fee obligation.
• Ordinary HOA dues, assessments and transfer fees are NOT private transfer fees, and they remain completely legal.
• Sellers must complete and sign the disclosure personally and deliver it at least 10 days before closing; selling as-is does not waive that duty.

What Exactly Is a Private Transfer Fee?

Start with the official definition, because the term gets thrown around loosely. Under Nevada law in NRS 111.840, a private transfer fee is a fee or charge required by a private transfer fee obligation, payable when real property is transferred, or for the right to make or accept that transfer. It can be a fixed dollar amount or a percentage of the value, and it does not include the purchase price, a licensed broker's commission, or a lender's loan fees and interest.

The structure is what made these fees so unusual. A covenant attached to the title required the owner to pay a percentage of the sale price, usually around 1%, on every resale, not just the first one. The obligation typically ran for decades, sometimes close to a hundred years, and it bound every future buyer because it traveled with the property itself. And the money usually went to the original developer or its trustee, not to anything the new owner would use or benefit from.

In some cases those fee streams were even pooled and sold to investors as a financial product. That is when the practice really drew attention: a fee on every future sale of a home, payable to someone who had nothing to do with the property anymore, with no service attached to it.

Why Were Private Transfer Fees a Problem?

The core problem is that the fee was a hidden, long-lived charge imposed on buyers who never agreed to it. A first buyer might sign the paperwork and never notice the clause. Every buyer after that was bound by it anyway, because it ran with the title. The fee added a real cost to each resale, grew as the home appreciated, and made the property harder to sell and harder to finance.

Regulators took notice at the federal level first. In 2010 the Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to stop buying mortgages on properties with private transfer fee covenants, and it finalized that rule in 2012 at 12 CFR 1228. When the two biggest sources of mortgage money in the country refuse to touch a property type, its resale market effectively dries up. That pressure is what pushed state legislatures, Nevada included, to act.

Nevada AB 271: The Ban

Nevada passed Assembly Bill 271, which Governor Brian Sandoval signed into law on May 20, 2011. It is codified in NRS 111.825 through NRS 111.880, and the heart of it is simple: under NRS 111.865, no one may create or record a private transfer fee obligation in Nevada on or after that date, and any obligation created or recorded on or after May 20, 2011 is void and unenforceable.

The law also created real consequences. NRS 111.880 holds someone who violates the prohibition liable for the obligation, and the seller's side got a new disclosure duty we will get to in a moment. The ban was not a soft guideline, it was a hard line drawn in the statute.

What About Older Obligations Created Before 2011?

Here is the part people rarely hear about. The 2011 law did not automatically erase every private transfer fee obligation that already existed. An obligation created before May 20, 2011 could remain enforceable, but only if the person or entity benefiting from it recorded a notice of private transfer fee obligation and met the specific requirements spelled out in NRS 111.870 and NRS 111.875.

In practice that means a pre-2011 obligation that was never properly recorded is no longer enforceable, which is the outcome most buyers hope for. But it also means the answer on an older property is not automatic. That is one reason the title search and the recorded CC&Rs still matter, especially on a home built or first sold before 2011.

What AB 271 Did NOT Ban: HOA Fees

This is the distinction that confuses the most people, and it is worth being crystal clear about it. The Nevada ban explicitly does not apply to fees owed to a community association, such as an HOA or a condominium association, for operations, services, or common-area maintenance. So the dues you pay your HOA every month, and the transfer fee your HOA charges at closing to process a sale, are completely legal.

An HOA transfer fee in Las Vegas is a common, normal cost of selling, typically a few hundred dollars that covers the association's paperwork and the documents a title company needs. It is a small, transparent charge for an actual service. A private transfer fee, by contrast, was a percentage of the sale price paid to an outside party for no service at all. Same phrase, completely different animal.

Question 15 on the Nevada Seller's Real Property Disclosure Form

Every seller of residential property in Nevada is required to complete the state's Seller's Real Property Disclosure form, sometimes called the SRPD or Form 547, under NRS 113.130. It is a long, detailed checklist of conditions and encumbrances, and Question 15 asks, in plain language: "This property is subject to a Private Transfer Fee Obligation?"

For nearly every Las Vegas or Henderson home on the market today, the honest answer is no. New obligations are void, and a properly recorded pre-2011 obligation is rare. But the question exists because Nevada law, in NRS 113.085, requires a seller of a property subject to a private transfer fee obligation to give the buyer a written statement disclosing its existence and describing it.

The statute even spells out the notice a seller must provide, and it is worth reading because it tells you everything you need to know about how the state views these fees:

"A private transfer fee obligation has been created with respect to this property. The private transfer fee obligation may lower the value of this property. The laws of this State prohibit the enforcement of certain private transfer fee obligations that are created or recorded on or after May 20, 2011."

Notice what the state says a private transfer fee may do: lower the value of the property. That is the whole reason the disclosure exists. A buyer has a right to know about a charge that will come out of their future resale before they commit.

What Sellers Need to Know About the Disclosure

If you are selling, a few rules about this form matter more than the average homeowner expects. You, the seller, must complete and sign the disclosure personally. Your agent cannot fill it out for you, and your agent cannot answer the questions on your behalf. The form must be served on the buyer at least 10 days before the property is conveyed, and you should keep a copy for your records.

And the one that surprises sellers most: selling as-is does not get you out of it. The disclosure duty survives an as-is sale. Incomplete or inaccurate disclosures are where sellers get themselves into trouble after closing, so take the form seriously and answer every question honestly, including Question 15.

What Buyers Should Check

If you are buying, the good news is that a private transfer fee is extremely unlikely to show up on a Las Vegas or Henderson home purchased after 2011. Still, a few checks are cheap insurance. Read the seller's disclosure, including Question 15. Ask your title company what the title report and the recorded CC&Rs show. And when you see a transfer fee in the closing costs, ask what it is: an HOA transfer fee is normal and legal, while a percentage paid to an outside party would be the red flag worth questioning.

Private Transfer Fee FAQ

Next Steps: Worth a Conversation

Most disclosure questions, this one included, come down to a simple rule: answer honestly, in writing, and get the paperwork checked before you sign. If you are selling and want to make sure the disclosure, the title and the numbers are all in order before your home goes on the market, that is exactly the conversation worth having, and the first one is free. You can schedule a 30-minute call with Sandy to talk it through.

Related Sandy Margolin resources

• Selling a Las Vegas home: the seller's guide to pricing, preparing and closing.
• Understanding closing costs for Las Vegas homebuyers: the full list of costs, including transfer fees.
• Understanding HOA dues and fees: how association costs work in Las Vegas communities.
• Why isnt my home selling?: what to check when a listing is not getting offers.
• Las Vegas real estate FAQ: straight answers to the questions buyers and sellers ask most.