If plans push through, home developers won’t be able to collect special fees from the sales of the properties they previously own.

The Federal Housing Financing Agency (FHFA) said it is considering prohibiting developers from including “private transfer fee convenants” in their sales contracts. The announcement came after the government agency, which regulates the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, met a coalition of real estate agents, title companies, and consumer advocates that are against such a practice.

Under a private transfer fee convenant, a home developer, or even of an outside investor, will receive up to 3% of the future sales price of a property it sold to a buyer should the latter decide to resell the house. Subsequent buyers are also subjected to pay the fee when they resell the property as the convenant will remain in effect for as long as 99 years after the developer sold the house to the first buyer.

Although the practice has already been prohibited in 18 states, the FHFA and its allies want to put an end to the inclusion of private transfer fee convenants because they believe that the practice don’t benefit the consumers. “The casual homebuyer would have no clue that these fees are even attached to the property that they’re going to purchase,” American Land Title Association spokesman Jermy Yohe said. FHFA acting director Edward DeMarco, on the other hand, stressed that undisclosed transfer fees may negatively affect the marketability and profitability of properties.

Are you in favor of FHFA’s plan to abolish private transfer fee convenants? Tell us what you think by joining our forums. Simply log in or type in your email address below to register.