Jackson & Campbell P.C. Update
	June 12, 2006
	Dear Real Estate Professional: DC: Reinstated Requirement for Co-signature of non-titled spouses and domestic partners on Deeds of Trust (notwithstanding abolishment of dower). The Title Industry continues to be uneasy about the existence of 15 D.C. Code 502 which was brought to light with the recent enactment of Domestic Partner Equality Amendment Act of 2006. The Code Section states: "A mortgage, deed of trust, assignment for the benefit of creditors, or bill of sale upon exempted articles is not binding or valid unless it is signed by the spouse or domestic partners of a debtor who is living with his or her spouse or domestic partners. For the purposes of this section the term 'Domestic Partner' shall have the same meaning as provided in §32-701(3)." We have been working DC Councilmembers to have 15 DC 502 repealed or amended. When we know the Bill number, we will advise the readers and you may wish to send your Councilmember an email voicing support for the Bill. The proposed red-line changes to the Bill that are being proposed may be found here. DC: Increase in Transfer & Recordation Taxes: Subtitle D, Section 2051 of The Fiscal Year 2007 Budget Support Act of 2006 (set for second vote on June 20) is called the "Deed Transfer and Recordation Amendment Act of 2006". Beginning October 1, 2006, with the exception of residential properties selling for less than $400,000, the transfer and recordation taxes are increased by .35% so that both taxes will be 1.45%. The "Recorder of Deeds Automation and Infrastructure Improvement Fund" was continued (the $5/document surcharge). The real estate taxation rates remain unchanged at: "(1) $0.92 for each $100 of assessed value for Class 1 Property; "(2) $1.85 for each $100 of assessed value for Class 2 Property; and "(3) $5.00 for each $100 of assessed value for Class 3 Property Click Here to See 2007 Budget Support Act (Engrossed) Reminder: Until a Bill is passed and becomes an Act or Law, i it is subject to change, even if it is captioned with the word "Engrossed". Maryland: Indexing Error is Fatal to Enforcement of Lis Pendens: Maryland Court of Appeals held that the party seeking to establish the notice of lis pendens has the ability to ensure the correct indexing thereof, is charged with the duty to assure the correctness of the indexing and recording, failing which the recording is insufficient to impart constructive notice. Click Here to See Opinion. DC: Mechanics Lien Amendments now codified at 40 D.C. Code 301.01 et. seq. effective 10/20/05. To see the changes Click here DC: OTR's policy of retroactively assessing real property taxes in the event of sale from homestead exemption holder to non-holder (similar situation with senior citizens). As most of the title companies have experienced, when this situation arises, OTR is automatically and retroactively assessing the taxes for the half year, and sometimes for the entire year. To add insult to injury, OTR also assesses penalties and interest. The shock to the seller is not only the loss of the exemption deduction, but also the loss of the "cap". Further, the title companies have no advance method of calculating the effect of OTR's actions. Multiple meetings between DCLTA and OTR have proved fruitless. A meeting is scheduled with Jack Evans on June 14 in order to solicit remedial legislation. All States: Excellent tool for searching US Treasury "Block List" is found here DC: DC Superior Court Rule 10-I now requires email addresses of attorneys on pleadings. Rule 10-I DC: Basic Business License is required for all rental properties, including a single family residence, or a single basement apartment rental. All States: Title insurers are now offering products to insure UCC filings. Click Here for Example DC: Deputy Recorder of Deeds. Position may still be open in case you know of any capable candidates. Click Here for Job Posting Maryland: PG County Deeds of Trust: If you want credit for earlier deed of trust, you must now submit a copy of the recorded, earlier deed of trust, along with the new Finance Affidavit. DC: Site for D.C. Courts: www.dccourts.gov was launched last week. Previously information had been hosted through the DC Bar site. Although it now contains general information (direct dial phone numbers, judicial assignments, if court is open during a storm or emergency, information for pro se litigants, etc.) plans are to expand its capabilities, including log-in for jurors, court calendars. For those who want to hear streaming arguments of DC Court of Appeals over the web, click on the link at www.dcappeals.gov. DC: A word to the wise to title companies: Beware of Conveyances of Residential Tenanted Properties. Even a transfer between existing owners changing percentage interest, etc. could trigger TOPA rights. Under the complex DC TOPA statute even the most ministerial tasks may have serious consequences. Note that a very high percentage of title claims arise from "accommodations", especially intra-family transfers. We suggest that all parties to the transaction sign an indemnification that explains that you have not investigated title, that you have relied upon the legal description supplied by the undersigned, and that you offer no guaranty as to what title, if any, is being conveyed, nor do you make any representation about whether the conveyance will have any tax consequences, trigger or impact upon any rights of tenants or others (including, but not limited to acceleration rights of lenders, creditor's rights, tenant rights) or insurance. You should also point out that a transfer may invalidate or affect owner's title insurance. Be wary! The little old lady/man will come back and say s/he did not know what the documents entailed. Relevant Cases Interpreting TOPA (some of which have briefs filed by Jackson & Campbell, P.C.): Wallasey.v.Varner Medrano.v.OstermanWeiss Allman.v.Snyder DC.v.EdisonPlace CPTA.v.CPLP 37Forrester.v.REO TStreet.v.Dereje DC: Status of Other DC Legislation: B16-109 Rent Control Reform Amendment Act of 2006 (deals with Rent Ceilings) Click here for text of B16-109 . Awaiting Mayoral Review. Residential Energy Conservation Tax Credit. Click here for text of Law 16-097 . Law 16-097, effective 5/12/06. B16-0789 "Condominium Warranty Bond Amendment Act of 2006". Click here for text of B16-0789 . Just introduced on 6/6/06 and has been referred to committee. Click Here for DCRA's position on Condominium Warranty Bonds in the interim. B16-109 "Tenants Rights to Information Act". Final reading occurred on June 6, 2006. Text of B16-109. B16-0785 "Interest on Rental Security Deposits Amendment Act of 2006". Click here for text of B16-0785 . Just introduced on 6/6/06 and referred to committee. Proposes setting a fixed 2% interest rate on residential security deposits (unless the 3-year T-bill rate exceeds that amount. The Office of Tenant Advocate would be required to keep track of that rate. Adjustments to security deposits would be made once a year. Tenant Evictions Reform Act of 2006. Click here for text . Projected effective date of 6/22/06. B16-0781 "Additional Sanctions for Nuisance Abatement and Office of the Tenant Advocate Duties", introduced 6/6/06, requires Office of Tenant Advocate to reach out to affected tenants to advise them of their rights after TOPA notices are received. Click here for text of B16-0781 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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