Washington AG settlement with Hayden Homes / First Story (illegal private transfer fees)
WA · Washington State Attorney General (Consumer Protection Act / Private Transfer Fee Obligation Act enforcement)
HOA loss · fines
What happened
Between 2006 and 2025, builder Hayden Homes recorded covenants on 7,627 Washington properties requiring sellers to pay First Story (a nonprofit tied to Hayden’s CEO) 0.125% of sales price on each resale. More than 2,000 homeowners paid. Some complained to the AG. The AG investigated under the Private Transfer Fee Obligation Act and Consumer Protection Act, alleging the ‘charitable’ fees did not lawfully benefit the burdened properties and that covenant threats to sue nonpayers were deceptive because the fees were unenforceable. On July 27, 2026 (updated July 29, 2026), the AG announced an assurance of discontinuance: $1.6 million restitution (refunds plus interest), cessation of the covenants, and removal of existing covenants from remaining Hayden-built/sold Washington properties.
What the court (or agency) held
Builder/nonprofit side lost via AG settlement (assurance of discontinuance), not a court merits judgment. Hayden Homes must pay about $1.6 million restitution to fee-paying sellers, stop using the private transfer fee covenants, and remove them from affected Washington properties.
Why this matters for members
Private transfer fees dressed up as charitable covenants can still violate Washington’s transfer-fee and consumer-protection laws when proceeds do not directly benefit the burdened property and enforcement threats overstate legality. Homeowner complaints to the AG can produce statewide restitution without each owner filing a private lawsuit.
What the member did
Some affected sellers filed complaints with the Washington Attorney General’s office.
Questions for the board
- Do any community documents or title covenants impose private transfer fees payable to a builder-affiliated nonprofit?
- Have resale packets or closing instructions demanded such fees?
- If fees were collected historically, what refund process exists after the AG agreement?
- Who verifies covenant removal from remaining lots?
Questions for a lawyer
- Does a particular covenant fit Washington’s Private Transfer Fee Obligation Act prohibitions as described in the AG action?
- How should an owner who paid document a refund claim under the assurance of discontinuance?
- What Consumer Protection Act theories apply to threatened enforcement of illegal fees?
- Are HOA boards obligated to stop collecting or facilitating such fees if named in resale docs?
Citation
Washington AG settlement with Hayden Homes / First Story (illegal private transfer fees), Wash. Att’y Gen. news release, July 27, 2026 (updated July 29, 2026) (2026-07-27). Washington State Attorney General (Consumer Protection Act / Private Transfer Fee Obligation Act enforcement). Outcome chip: hoa_loss. Source: https://www.atg.wa.gov/news/news-releases/ag-s-office-secures-16-million-washington-homeowners-who-were-charged-illegal
_General information, not legal advice. Outcomes turn on facts and current law._
General information, not legal advice. Outcomes turn on facts and current law.