Arizona legislators succeeded in banning Non-Title Recorded Agreements for Personal Services (NTRAPS), a predatory practice of filing unfair real estate fee agreements in property records, according to The American Land Title Association (ALTA).
ALTA, the national trade association of the land title insurance industry, American Association of Retired Persons (AARP), and the Land Title Association of Arizona (LTAA) applaud the Arizona State Legislature for passing Senate Bill (SB) 1218 that includes provisions to protect homeowners from the NTRAPS.
The new law will:
- Make NTRAPS unenforceable by law.
- Restrict and prohibit the recording of NTRAPS in property records.
- Create penalties if NTRAPS are recorded in property records.
- Provide for the removal of NTRAPS from property records and recovery of damages.
Arizona Gov. Katie Hobbs signed the bill into law on Tuesday, April 2.
"The property rights of American homebuyers must be protected," said ALTA Vice President of Government Affairs Elizabeth Blosser. "We have to ensure that there are no unreasonable restraints on a homebuyer's future ability to sell or refinance their property due to unwarranted transactional costs."
Arizona bill S.B.1218 follows the objective of similar bills introduced across the country, such as Kentucky, to provide a remedy for existing NTRAPS while also discouraging these types of practices negatively impacting homeowners.
"For many Arizonans, their homes are the most important asset and their financial stability," said Dana Marie Kennedy, state director of AARP in Arizona. "S.B.1218 will provide Arizonans some peace of mind by protecting them from unfair service agreements. For a company to prey on unsuspecting homeowners in a way that locks them into a 40-year obligation is disgraceful. We applaud the Arizona Legislature and Governor Hobbs for taking action to protect vulnerable older adults from deceptive and abusive practices."
