Proposed increase for deed and mortgage recordings would fund demolition
Home buyers in Pennsylvania could find themselves paying an additional $15 for each deed and mortgage recorded, with the money used strictly for demolition of dilapidated buildings on blighted properties.
Sen. David Argall, R-Schuylkill, introduced Sen. Bill 486 in June that, if approved, would amend the Recorder of Deeds Fee Law with the imposed fee.
The bill unanimously passed the Senate and was expected to be voted on by the House Urban Affairs Committee, but was removed from the agenda last week following a launch for opposition to local legislators by the Pennsylvania Association of Realtors® (PAR).
Kim Shindle, PAR Media Relations Manager, said members are concerned about the effect additional fees added to the real estate transaction will have on home buyers.
“As a recording fee is only levied on a home buyer, the burden per taxpayer is much greater than the burden from a more broad-based tax designed to generate the same amount of revenue,” said Shindle. “Some of these fees can be costly, and when added together, they can be staggering.
According to Shindle, the list of charges a buyer might be required to pay includes fees for document preparation, deed filing, inspection, underwriting, delivery, and notarizing.
Claudette Franks, real estate agent at SWC Properties in Uniontown, said the proposed $15 fee would be attached to the home buyer’s closing costs.
“It’s good that they want to take a proactive stance on demolition and blighted properties,” said Franks. “However, how much more can these buyers pay?,” she asked.
The County Demolition Funding Program amends the Recorder of Deeds Fee Law that would authorize the additional fee.
Fayette County Recorder of Deeds website lists the fee for deeds or mortgages at $62.50 each.
As of Aug. 1, a $20 fee will be implemented for all Parcel Identification Numbers pertaining to each document recorded.
According to Andrew French, executive director of Fayette County Redevelopment Authority, recent data from the U.S. Postal Service indicated the county has 5,863 vacant residential properties.
French added that 66 percent of the county’s 67,178 properties are over 50 years old.
“The data only deals with residential blight, and we know that many communities are struggling with substantial commercial blight as well,” said French.
While the county does not have an updated inventory of blighted commercial structures, French said he believes there is possibly over a thousand that would meet the definition of blighted under the Pennsylvania Urban Redevelopment Law.
PAR believes it’s unfair to continue to add fees onto the real estate transaction to cover the demolition costs and that owners should be responsible for maintaining their own properties “Passing these costs onto home buyers is unwarranted,” PAR said.
Scott Detweiler, president of the Fayette Board of REALTORS® said the state already requires a two percent transfer fee for deed recordings that is split between the realtor and home buyer.
Adding more costs, when the legislature already increased filing fees last year, adds just one more hurdle to the increasingly costly process of home ownership, noted PAR.
Based on information from the Pennsylvania Department of Revenue, there were 353,562 deeds and 577,438 mortgages recorded across the state in 2013.
If the maximum $15 fee allowed by Senate Bill 486 had been imposed on these transactions, the state’s 67 counties would have generated nearly $14 million in 2013 to be used for demolition of blighted properties.