The industry continues to face rapid changes in District of Columbia law, new procedures, forms and policies.

District of Columbia Recorder of Deeds: There is a new Homestead/Senior Citizen application form available from the ROD website (www.dc.gov ... choose Taxpayer Services .... then Recorder of Deeds Forms). It can now be filed at the ROD. There is no longer a place for title/mortgage companies to log into the ROD website. Instead, that more detailed information is now available on the Real Property Tax Database Search which was always available to the general public. If the Class of a property changes or if a Homestead Exemption no longer applies, there is an affirmative obligation to advise Office of Tax and Revenue (OTR). There is legislation pending that extends that requirement if a recipient of Lower Income Abatement no longer qualifies.

The U.S. Supreme Court, yesterday, completely revamped the concept of the sanctity of the tenancy by the entireties. It held, in U.S. v. Craft, 233 F.3rd 358, that a federal tax lien against one spouse in a t/e DOES attach to the property. Thus, if you are a title insurer, and such a lien exists, you will have to pay it off or get it released before you can insure title, effective now. Click Here for link to Opinion in U.S. v. Craft

John A. Giannetti, elected in 1998 to the Maryland Legislature, and an attorney at Jackson and Campbell, P.C., reports on several bills of particular attention to the real estate, title and business communities. Click Here for Summary of New Legislative Activity in Maryland

In D.C., deeds have to be recorded within 30 days of execution to avoid the $250 penalty (subject to a case by case review if circumstances so merit). If you fail to file within 30 days, the purchaser also runs the risk of incurring higher taxes (loss of homestead, change of class, etc.) This 30-day filing limitation does not apply to deeds of trust. Although, you do run the risk of intervening liens if you are not prompt in filing your deed of trust.

Tax Sale Foreclosures: If anyone is interested in reviewing and commenting on proposed rules for DCMR Chapter 3, Title 9, please contact Roy Kaufmann (you may "reply" to this email) or Henry Terrell, Attorney Advisor to OTR at 202-442-6344.

UCC-1 (Financing Statements) and UCC-3's (Terminations/Changes/Continuations) are now recordable on-line at the ROD's website. Did you know that there is now title insurance available for Article 9 (secured) transactions? The D.C. ROD is also researching the future possibility of recording deeds and other documents (in template form). Similarly, if you have instrument numbers, you can view those documents at www.landata.com/washdc/, rather than having to personally appear at the ROD office.

A Virginia case demonstrates the need for title companies to reconcile their bank statements promptly. Banks are free to require customers to notify them of forgeries within a specific time after receipt of the monthly statement. In this case, two checks were forged on the title company's account, and the title company did not advise the bank within the 60-day required period for notification. Although the title company asked to be re-credited for the forged checks, the court held that the title company's failure to notify within the 60-day period was fatal. The title company lost the money. An old DC case reminds us of the importance of ensuring that a corporation is in good standing if it takes title. The case holds that no title passed to a corporation whose charter had been revoked before closing.

A Maryland case held that a title agent could be sued for negligence (as opposed to under the theory of breach of contract) for not ensuring that a lien was released before they issued the policy. Agents often issue policies and, sometime thereafter, the releases are "cleaned up". However, the agency agreement between the title company and the title insurer in this case required the title company to secure the release of liens before it issued its policy. When the title company failed to do that, and a claim arose, the title insurer prevailed against its agent.

Please feel free to circulate this newsletter to others in the industry, both within and outside your office.

Sincerely,

Real Property and Asset Management Group
Jackson & Campbell P.C.