The 1% private conveyance fee is the single most significant undisclosed cost in a Martis Camp transaction. It is not a commission. It is not a county transfer tax. It is a contractual obligation embedded in the Martis Camp CC&Rs that runs with the land — meaning it applies to every transfer, in perpetuity, regardless of how many times the property changes hands. This article explains what it is, how it is calculated, who pays it, and what it means for buyers who are modeling the full cost of entry.
Legal Basis: Private Transfer Fees Under California Law
California Civil Code §1098 et seq. governs private transfer fees — contractual obligations that require a payment to a third party (in this case, the Martis Camp Community Association) upon the transfer of real property. These fees are enforceable as covenants running with the land, meaning they bind all future owners regardless of whether the current owner was aware of the fee at the time of purchase. California law requires disclosure of private transfer fees in the seller's disclosure package, but the disclosure requirement does not guarantee that buyers understand the fee's magnitude or its compounding effect across multiple transactions.
How the Fee Is Calculated
The Martis Camp conveyance fee is 1% of the gross sale price — not the net proceeds, not the assessed value, and not the original purchase price. It is calculated on the actual transaction price at close of escrow. If a property sells for $4,500,000, the fee is $45,000. If it sells for $8,000,000, the fee is $80,000. There is no cap, no floor, and no exemption for related-party transfers or estate distributions under the standard CC&R structure. The fee is buyer-paid at close, meaning it appears as a closing cost on the buyer's settlement statement, not the seller's.
Who Pays It — and When
The conveyance fee is buyer-paid at close of escrow. It is separate from the $400 HOA administrative transfer fee, which is also buyer-paid. The conveyance fee is wired to the Martis Camp Community Association as a condition of the HOA's approval of the transfer. Without HOA approval, the transfer cannot close. This gives the HOA effective enforcement authority over the fee — it is not a voluntary payment or a negotiable term between buyer and seller.
How It Compounds Across a Holding Period
The compounding effect of the 1% conveyance fee is most visible when modeled across a typical Martis Camp holding period. A property purchased for $3,500,000 in 2018 and sold for $6,000,000 in 2024 generates a $60,000 conveyance fee at the 2024 sale — paid by the new buyer. That new buyer, if they sell in 2030 for $8,000,000, generates an $80,000 conveyance fee for the next buyer. Each transaction resets the fee calculation to the current sale price. Over three transactions on the same parcel across a 15-year period, the cumulative conveyance fees paid to the HOA could easily exceed $200,000 — none of which accrues to any individual homeowner.
Tax Treatment: What the IRS and California FTB Say
The tax treatment of the 1% conveyance fee is unsettled and buyer-specific. Some buyers have treated the fee as a deductible real property tax under IRC §164, relying on the argument that it is a mandatory assessment levied by a quasi-governmental HOA. Others have treated it as a non-deductible closing cost added to the property's cost basis. The IRS has not issued definitive guidance specific to Martis Camp's fee structure. California's Franchise Tax Board follows federal treatment for most real property deductions. Buyers should consult a licensed CPA or tax attorney with experience in California luxury real estate before making any assumptions about deductibility.
Comparison to County Transfer Taxes
Placer County's documentary transfer tax is $1.10 per $1,000 of sale price — or 0.11% — paid by the seller. The Martis Camp 1% conveyance fee is approximately nine times the county transfer tax rate, paid by the buyer rather than the seller. On a $5,000,000 transaction, the county transfer tax is $5,500 (seller-paid) while the Martis Camp conveyance fee is $50,000 (buyer-paid). These are separate instruments with separate payees and separate legal bases. Both appear on the closing settlement statement, but they are not interchangeable.
This article is published for research and informational purposes only. All figures are sourced from the Martis Camp Community Association Fact Sheet (Rev. 1-18-2022). Legal references are for informational context only and do not constitute legal advice. This portal is not affiliated with Martis Camp Community Association or any licensed brokerage. Verify all figures and consult qualified legal and tax counsel before any purchase decision.