Alabama, Iowa, Georgia Join List of States Banning Unfair Real Estate Fee Agreements

June 1, 2023

Alabama, Iowa and Georgia joined a growing list of states to pass legislation protecting homeowners from the predatory practice of filing of unfair real estate fee agreements in property records, known as Non-Title Record Agreements for Personal Service (NTRAPS).

NTRAPS have been recorded in property records since 2018. The practice preys upon homeowners, offering small cash incentives in exchange for decades-long contracts for the exclusive rights to sell the property. Submitting NTRAPS for inclusion in property records characterized as liens, covenants, encumbrances or security interests in exchange for money creates impediments and increases the cost and complexity of transferring or financing real estate in the future. 

The legislation passed in Alabama and Iowa follows a model bill that ALTA helped draft with input from AARP and national stakeholders. The model bill created a blueprint for states wishing to provide a remedy for existing NTRAPS while also discouraging future unfair and deceptive practices.  

“The property rights of American homebuyers must be protected,” said Elizabeth Blosser, ALTA’s vice president of government affairs “A home often is a consumer’s largest investment, and the best way to support the certainty of landownership is through public policy. We have to ensure there are no unreasonable restraints on a homebuyer’s future ability to sell or refinance their property due to unwarranted transactional costs.” 

SB 228 in Alabama and House File (HF) 475 in Iowa share the objective of similar bills introduced across the country to provide a remedy for existing NTRAPS while also discouraging these types of unfair practices impacting homeowners.   

“The Southeast Land Title Association applauds the passage of SB 228 protecting Alabama homeowners against harmful unfair service agreements,” said Price Evans, SLTA Alabama Governmental Affairs chair. “In collaboration with the Alabama Association of Realtors, we commend the legislature in prohibiting these deceptive and predatory practices.”

ILTA President Sally Hertel added, “The consumer protections contained in HF 475 are important for all Iowans. We appreciate the hard work of the Iowa Association of Realtors, Rep. Carter Nordman and Sen. Scott Webster in passing this legislation.” 

Alabama’s law goes into effect Aug. 1, 2023, while Iowa’s goes into effect July 1, 2023. 

The new laws in Alabama and Iowa 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. 

While Georgia’s legislation doesn’t follow the model bill, Senate Bill 90 makes NTRAPS unenforceable by law. 

“Georgia consumers have won a big victory against predatory practices designed to siphon off the equity -in their homes,” said Deborah S. Bailey, managing member of Bailey Helms Legal LLC and SLTA secretary and co-chair of the Georgia Governmental Affairs Committee. “We are pleased the Georgia legislature has taken action to protect these consumers.” 

Other states to pass versions of an NTRAPs bill include Colorado, Florida, Georgia, Idaho, Maryland, North Dakota, Tennessee, Utah and Washington. AARP has worked closely with ALTA and other groups to get state bills passed.

“This follows our advocacy efforts we have undertaken in collaboration with ALTA in other states, and we are expecting and hoping to work on similar legislative solutions in other states in helping homeowners against such predatory housing practices,” said AARP Government Affairs Director Samar Jha. 

Contact ALTA at 202-296-3671 or