January 2010

Dear Real Estate Professional:

DC: Zoning Map (Interactive) The DC Office of Zoning has launched an interactive map which will become an important tool to all those in the DC real estate and title industries. You are now be able to see case history on properties, by address and by lot/square. The system, now available to the public, is the almost the same system that was used in-house by the Office of Zoning. Click here to view the map (remember to click “accept” at bottom).

DC: Recorder of Deeds is Moving at end of May; Be wary of scheduling Closings for those days The Recorder of Deeds is planning to move to 1101 4th St SW, West Tower (Waterside Mall in SW, with a Metro stop right on-site) during the period of May 20 to May 23, 2010. You might want to avoid time-sensitive closings around that time in case there is any disruption. The OTR, Surveyor's Office and Maps and Titles will now be in the same building. The operation will be more compact than the present location and will have 12 computers on-line for public use. By the time of the move, ROD plans on having all libers scanned, indexed and on-line back to 1943. There is a gap representing some years when the indexing was not well-done, but that gap will be closed eventually as the ROD contracts for the copying and indexing to be completely redone. After the move, land records back to 1692 are expected to be available on-line. Some records will not be moving from the current location to the new location because of space limitations. Those records will be housed at the DC Archives at 1300 Naylor Ct NW, Washington, DC. Some of those records will be immediately accessible at the Archives, others will need to be ordered. Until a better email address is circulated, it is suggested that you organize visits by contacting Mark Mandel, Public Records Administrator at mark.mandel@dc.gov.

DC: New Homestead Application Form There is a new Homestead Application Form. While its use is permitted now, its use will be required as of April 1, 2010. Click here to view the Homestead Application Form.

DC: Recorder of Deeds: New Escrow Account Process Planned The ROD reports that it will be discontinuing the present system whereby title companies maintain amounts in escrow with the ROD to handle overages/underages in recording costs and copy charges. The ROD and the Treasury Department are reviewing plans to substitute a debit card system and will meet later this month to work out the details.

DC: Recorder of Deeds – Breathing Life Back into Electronic Recording? The ROD is scheduling meetings with industry members to address issues with electronic recording that have stymied its acceptance on a broad scale. While some of those issues are related to the software, the larger issue is the inability of the District to process refunds quickly when an obvious e-recording error has resulted in an erroneous debit from the filer's account. To coordinate the efforts of the ROD, the meetings are expected to include representatives from the software vendor as well as from the OTR and or Treasurer's Office.

DC: Corporations and Entity Laws; Massive Changes Proposed Practioners in real estate, tax, corporate law, trusts, estates, and banking should take careful note of the changes proposed by Councilmembers Cheh and Bowser in Bill 18-500. There is a public hearing on February 11, 2010 at 3pm in Room 500 of the District Building at 1350 Pennsylvania Avenue NW. If you wish to testify, contact DCrockett@DCCouncil.us.

DC: "Vacant/Blighted Property” As reported in our earlier update, the Budget Support Act eliminated the $10 per $100 tax rate on vacant properties and replaced with a $10 "blighted" rate which focuses on poorly maintained properties that blight the surrounding area. As a result, at the present time, we are told that no properties are now taxed at Class 3 “Blighted”. No property will be taxed at the $10 rate until there has been notice to the owner and a determination made by the DCRA. The determination can be appealed to the Board for the Condemnation of Insanitary Buildings (BCIB). The manager for both the Vacant Property Division of DCRA and the BCIB is Reuben Pemberton at reuben.pemberton2@dc.gov.

But, a pair of new bills is being considered that would create a staggered tax rate that would increase the longer a property stands vacant (as opposed to "blighted"). In fact, one proposed Bill would redirect the focus back on vacant properties.

The first bill, Bill 18-448, the Blighted Properties, Abatement Reform Act of 2009 has not provided for any exemptions, such as if a person has recently acquired the property by purchase, inheritance, awaiting permits, construction, recent fire or casualty, etc. A proposed transferee, therefore, would have a disincentive from purchasing such a property and the result might be the exact opposite of the intent of the statute, i.e., that the property will not be acquired and would remain as a problem property. The second bill, Bill 18-546 entitled the “Neighborhood Preservation Amendment Act of 2009”, introduced by Councilmember Bowser, seems to try to address the same problems with radically different solutions. It is interesting to note that the public hearing for both of these competing bills is scheduled for the same day, as noted below. This Bill attempts to revive the treatment of vacant properties as opposed to blighted properties even though this distinction was just recently repaired by the Budget Support Act. The bill would require registration of every unoccupied property with costly registration fees and penalties of up to $25,000 plus jail time for failing to register.

A public hearing is set on both bills for January 27, 2010 at 2:00 pm in room 412 of the District Building at 1350 Pennsylvania Avenue NW. If you wish to testify, contact DCrockett@DCCouncil.us.

DC: Taxation on Transfer of Co-ops The DC Recorder of Deeds has reminded all that there is now a transfer tax on the sale of interests in co-ops. Also note that, if the buyer/seller do not pay this tax, the co-op association is currently liable for payment. The memorandum from the Recorder of Deeds points to its website which provides forms for the Transfer of Economic Interest Deed and the Transfer of Economic Interest Tax Return. The title industry is aware that the true examination of ownership of co-ops is external to the documents recorded at the Recorder of Deeds and the "Transfer of Economic Interest " Deed " is more of an informational document, rather than a document that vests title. Each cooperative tends to have its own specific procedures and forms for effecting a transfer of such an interest. Click here to view a copy of the Memo from the Recorder of Deeds.

DC: Licensing of Title Agents The DC Department of Insurance, Securities and Banking ("DISB") has resurrected its effort to introduce legislation to license title companies, underwriters, and other related industries. The newest version of the proposal has been delivered to the DC Land Title Association for comments.

DC: Tax Sale Foreclosure Cases - Changes Required to Posting Affidavits Magistrate Judge Beshouri has been denying motions for summary judgment because the Affidavits of Posting failed to indicate i) with specificity where on the property the documents had been posted so that the Court can determine if the documents can be "conveniently read" and ii) what Summons was affixed (i.e., the Summons for the lead defendant). Click here to view a copy of an Order issued in similar matters.

MD: Montgomery County: Reduces Required Documents to Record Foreclosure Deeds The Montgomery County Transfer Office has announced that, henceforth, the only documentation that will be required on foreclosure deeds will be the deed, intake form, HUD-1 or signed statement that the note holder is the purchaser and there is no HUD-1 Affidavit of Deficiency as to whether any deficiency is being pursued or waived, and the Statement of Debt.

MD: Unrecorded Deed of Trust Takes Priority over Judgment Lien The Maryland Court of Special appeals has recently confirmed that the "effective date" of a deed of trust is the date of execution. A creditor obtained a judgment in court which simultaneously perfected a lien interest (because the subject real estate was in the same county as the court that issued the judgment). A DOT was executed and delivered prior to the judgment being entered, but not recorded until after the judgment was recorded. The Court held that, even though the DOT was unrecorded at the time of the judgment, the DOT took priority. The Court discounted the judgment creditor's argument that a distinction could be made between judgment creditors and general creditors. Click here to view a copy of the Decision.

MD: Naming Individual Persons as Trustees on Deeds of Trust Circuit Courts in Maryland have been questioning the ability of a lender-beneficiary to appoint a substitute trustee when the original DOT failed to identify a trustee. Similarly, the Courts have called into question the naming of a substitute trustee when the original trustee was a corporate trustee. It would appear preferable, in Maryland, to name individual persons as trustees, rather than corporate trustees, otherwise exceptions in the title policy may result.

Federal: Amtrust Bank Taken Over by FDIC On December 5, 2009, FDIC took over Am Trust Bank. Upon becoming receiver of AmTrust Bank, the title to AmTrust Bank assets became vested in FDIC as receiver for AmTrust Bank.

Federal: RESPA Settlement Cost Booklet Published HUD has issued its booklet that lenders are now required to distribute to borrowers within three days of loan application. Click here for copy of Booklet.

Federal & DC Congresswoman Holmes Norton celebrated the passage of the federal Tax Extenders Act of 2009 which extended until December 31, 2010 the $5000 first-time homebuyers credit for DC homes (which can not be taken in addition to the $8000 credit) and the $3000 wage credit for DC residents hired by most D.C. businesses.

DC: Jackson & Campbell, P.C. makes available a CHART OF PENDING D.C. LEGISLATION.

With the recent addition of Jeffrey M. Sherman and Ronald M. Levin, Jackson & Campbell is pleased to announce the formation of its Bankruptcy & Creditors' Rights Practice Group. Jeff and Ron bring decades of in-depth bankruptcy experience to the Firm. The Group will be co-chaired by Jeff, Ron, and Russell S. Drazin. Russell's practice focuses on business litigation and counseling on behalf of creditors, including foreclosures of commercial loans (secured by commercial and residential property). Please contact Jeff, Ron, or Russell at (202) 457-1600 to discuss representations related to bankruptcy and creditors' rights.

ACCOLADES:
Congratulations to Jackson & Campbell Director, David H. Cox , who was recognized as among DC's Legal Elite "Go To" Attorneys (for Real Estate and Business Law) in the 2009 Readers' Poll of SmartCEO magazine.

UPCOMING SEMINARS:
Roy Kaufmann will be speaking at a seminar presented by the DC Bar's Real Estate and Trust and Estates Sections on the topic of vacant property designation and assessment in the District of Columbia. The Seminar will be held at noon on Thursday, January 21, 2010 at the DC Bar's Conference Center at 1101 K Street, NW. To register contact (202) 626-3463. Click here to register on-line or for more information.

OTHER LEGAL UPDATES:

Jackson & Campbell, P.C.'s Trust & Estates Legal Update
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Please feel free to circulate this newsletter to others in the industry, both within and outside your office.

Sincerely,

Roy L. Kaufmann of the Real Property and Asset Management Group
Jackson & Campbell P.C.

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email: Roy L. Kaufmann at rkaufmann@jackscamp.com
voice: (202) 457-1600
web: www.JacksCamp.com

The editor acknowledges with thanks the research and preparation for this newsletter by Nicholas C. Lipresti, an intern with the Firm.

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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.

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