Jackson & Campbell P.C. Update
	January 16, 2006
	Dear Real Estate Professional: District of Columbia Tax Sales of Real Property: Six months are about to expire after the July 2005 tax sale. This signals the beginning of the filing season for tax sale foreclosures. We have noticed two factors: 1) There were fewer people bidding, possibly because of higher surplus bids; and 2) in the past year, there have been more properties actually conveying to the tax sale purchasers, possibly due to better pre-auction screening. Yet, the more prudent objective for tax sale purchasers should be to maximize the return on the bid (given the 18% interest) rather than to obtain the property (which occurs less than 4% of the time). The question has been posed as to what remedial actions a title company might consider if a tax sale is discovered in the chain of title and what Requirements should be set up. If you do not require your abstractor to CHECK if a tax sale has occurred, you might not even realize the danger. The abstractor should pick up these matters either by Lis Pendens filed, or by looking at the list of tax sales filed yearly. The lists are found at these instrument numbers: 2005115568, 2004122532, 2003112892, 2002104896, 2001074038. The abstractor should also be checking the Civil Division records of the D.C. Superior Court to see if there are pending court actions (often identified with an "RP" designation in the case number signifying that the action involves Real Property). Apart from the abstractor's report, the title company should also notice these sales. At the OTR web site (Click here for OTR website) if any listing on the page at tab "Real Property" tax says "Sold to Buyer", you have a tax sale. Remember, the tax sale conducted in 2005 covers the 2004 taxes. The rule is simple: the best remedy is to require the filing of a Certificate of Redemption among the land records for every year that the property has gone to tax sale. Secondarily, if the land records show a "Lis Pendens", the ideal follow-up recording is either be a "Release of Lis Pendens" or the filing of a Dismissal Praecipe in the land records. Obtaining a Certificate of Redemption is a significant task not to be undertaken lightly. It is not for the light-hearted and requires much time. Simply making sure that taxes are paid is completely insufficient. The title company might forget that there is a pending lawsuit for foreclosure, moving at glacial speed, but eventually wiping out title. Nor will obtaining the $15 tax certificate stop this glacier. The prudent course of action would either be to a) require the Seller to provide Certificates of Redemption for each year (available from the Tax Sale Office of the Office of Tax and Revenue) or b) pay all outstanding taxes, pay all attorney's fees, and then consult with a law firm to determine an appropriate escrow amount to ensure that the firm can obtain the Certificate(s). You are welcome to call Roy Kaufmann at Jackson & Campbell for information at (202) 457-6710. If the title company wants to obtain the Certificates of Redemption as part of its services, you can find the procedures at 9 DCMR 316.6. Upcoming Seminars and Continuing Education: Troubleshooting Title and Title Insurance Problems in DC: Conducted by National Business Institute. Lecturers: David H. Cox of Jackson & Campbell, P.C., Eric Schneider of Fidelity National Title, and Elisabeth C. Zajic of First American Title Ins. Co. Click here for Details Status of DC Legislation: Estate and Inheritance Re-coupling Act of 2005. B16-18. Still in committee. Domestic Partnership Equality Act of 2005. B16-52. Passed by the Council, awaiting Mayoral action by 1/31/2006. Tenants Rights to Information Act of 2005. B16-109. Still in committee. Uniform Environmental Covenants Act of 2005. B16-147. First reading was on 1/4/06. Commercial Property Recordation and Transfer Tax Exemption Amendment Act of 2005. B16-231. Still in committee. Tenant Evictions Temporary Amendment Act of 2005. B16-544. Emergency Legislation in effect until 3/22/06. Please feel free to circulate this newsletter to others in the industry, both within and outside your office. The contents of this Update are intended for general informational purposes only and should not be relied upon as legal advice or as a substitute for consultation with a qualified attorney. Moreover, the mailing hereof is not intended to create nor does it constitute an attorney-client relationship. Sincerely, Roy L. Kaufmann of the Real Property and Asset Management Group Jackson & Campbell P.C. email: rkaufmann@jackscamp.com voice: (202) 457-1600 web: http://www.JacksCamp.com

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