Dear Real Estate
Professional:
The DC Master Business
License: Arisen from the
dead in the form of the
Basic Business License
("BBL") (renamed, perhaps,
to distance itself from its
dreaded cousin, the former "MBL")
the BBL applies only to
businesses that require
inspections, approvals or
investigations (including
one and two-family rentals).
Details at
Click here to view the
Official D.C. BBL Site (that
does not offer many
"Details"
RESPA can Hammer a Title
Company or Mortgage Company
even for a $10 Recording
Fee: U.S. Court of Appeals
(Seventh Circuit)remanded a
case for trial wherein a
mortgage company had charged
$10 on their payoff
statement. The seller
claimed that, because the
title company did all the
work, the $10 was unearned.
The various government
authorities (including HUD)
in the DC/MD/VA area have
tripled their resources to
investigate even these
smaller violations of RESPA.
Local title companies are
being investigated and
contacted about these
violations. RESPA is harsh
with penalties ranging up to
$350,000.00. Class actions
can also prove devastating.
Split-fee arrangements,
"up-charges", title
companies offering "special
services" to real estate
agents, and internet
click-through referral
payments are being strictly
scrutinized. If you are
contacted, seek counsel,
rather than discussing the
matter with the investigator
or anyone else.
Maryland Transfer &
Recordation Tax Increases:
Allegany, Caroline, Carroll,
Dorchester, Washington and
Wicomico Counties have
implemented increases (and
some decreases). All are
effective by September 1,
2003. Verify before sending
documents for record.
Defalcations Continue.
Defalcations (prosecutions
of which is an area in which
Jackson & Campbell
specializes on a national
scale) continue to plague
the industry. Washington
Post reports that Merit
Title Company, in Fairfax
suffered losses in the
neighborhood of $300,000.00
when an employee wrote
checks for the benefit of
herself and her husband,
purchasing horses, vehicles
and real estate. Quick
action by Merit in hiring a
private financial
investigator. After being
confronted, the employee
left the premises and later
turned herself in. In
Arkansas, a title agency
owner apologized that she
had paid personal bills that
she "borrowed" from her
escrow account. The court
ordered all company assets
frozen and the matter is
currently being litigated.
Mandatory Arbitration in
Title Policies May Not
Apply. Court held that, when
the insured is suing a
third-party (i.e. the title
agent, perhaps) on the same
issues, an underwriter could
not require arbitration
which might result in
inconsistent rulings from
the court versus the
arbitrator. MRA Funding
Corp. v. United Title
Insurance Co., 2002 WL
31045492 (Cal. App.).
Closing Agents Contractual
Relationship with
Underwriter Applies when
Insufficient Funds are
Collected to Payoff
Mortgage. Court found that
closing agent who had
guaranteed payoff to an
insurer, was liable for the
deficiency when the agent
had not withheld enough from
Seller's proceeds to payoff
the loan. Old Republic Title
Insurance Co. v. Santangelo
& Co., 750 NYS 2d 16 (2002).
Inaccurate Attorney Opinion
Letter or Representation.
Underwriter had to show
justifiable reliance where
attorney failed to accurate
set forth the status of
estate taxes. Lawyers Title
Insurance Corp. v. Baik, 55
P. 3d 619 (Wash. 2002).
Excellent Tax-Saving Ideas.
Jackson & Campbell's own
Michael Grace has provided a
bullet-point outline of the
positive elements of the
federal Tax Reconciliation
Act of 2003.
Click here for Summary
D.C. Recorder of Deeds. The
DC ROD is encouraging
appending a copy of the
Court Order to Tax Deeds
under the Tax Clarity Act.
There is no per-page charge
or Transfer Tax collected,
but ROD has taken the
position that there IS a
1.5% recordation tax based
upon the amount bid at tax
sale.
"Corrective Deed" Does Not
Divest Title. Property owner
conveyed contingent
remainder interest to a
party. Later a "corrective
deed" tried to change the
tenancy of the remainderman.
Court held that remaindermen
could quiet title in favor
of themselves. Hilterbrand
v. Carter 27 P.3d 1086 (Ore.
Ct. App. 2001). Consider
this a reminder that a high
percentage of title claims
result from intra-family
transfers, many being
"accommodations".
Virginia. Privacy Trends
Take Title Industry a Step
Backwards. Loudoun County
has removed their on-line
land records voicing privacy
concerns. Some County Clerks
are refusing to record
documents that contain
social security numbers.
New IRS Rules for Foreign
Transferors.
Click Here to see New IRS
Rules
Patriot Act, MERS and
Federal Do-Not-Fax Rules.
Two excellent articles
appeared in the July/August
Issue of "Title News"
published by ALTA. See below
for handy web-site to assist
title companies to comply
with USA Patriot Act.
Click Here to see ALTA
Article on the new, relaxed
Do-Not-Fax Rules
Click Here to see ALTA's
"Title New" site
Trusts and Estates. Jackson
& Campbell has an entire
practice group specializing
in trusts and estates.
Click Here to see current
newsletter for Trusts and
Estates Section
To update your list of very
handy websites:
www.NTIWeb.com: an
excellent site made
available by Chicago Title
to its agents and clients
with state-specific customs
(i.e. who traditionally pays
for premiums, recording
taxes, recording
requirements, etc.) and
other information.
www.FreeTimeSheet.com:
provides a free integrated
timesheet, expense reporting
and project tracking for up
to 5 users (you will have to
put up with their
advertising).
www.FindLaw.com: good,
free portal with links to
resource materials in
various practice groups.
http://Thomas.loc.Gov:
Full text of federal
legislation, roll-call
votes, complete
Congressional Record.
www.USCourts.gov: An
ever-improving site giving
access to federal courts,
opinions, rules, guidelines.
http://countyrecords.landata.com/washdc:
View (free) copies of
documents recorded at the
D.C. Recorder of Deeds.
Search by party name,
lot/square, or instrument
number. Right now, printing
is also free (choose
"Credits" at the end), but
that is scheduled to change
soon to a reasonable
$2/document.
www.EntreWorld.org: A
wonderful site geared
towards entrepreneurs
produced by the Kauffman
Foundation (no relation to
Roy Kaufmann)
www.TheUltimates.com:
one of the best search tools
for addresses and names. It
includes a "reverse search"
where you put in the phone
number and the listing is
provided, but does not
include a "criss-cross"
whereby you can put in an
address and confirm the
listed phone and/or
occupants.
U.S. Patriot Act affects
title companies! You have to
make sure the parties to
your transaction are not
"Specially Designated
Nationals" the names of
which are found on a list of
approximately 250 names of
people suspected in
terrorism matters. The Act
freezes assets of those
people and restricts
everyone from having
"transactions" with these
individuals. Fortunately,
the ALTA has a site that
enables you to do this very
quickly. You may want to add
this step to your settlement
procedures. Hint: search
field is at the bottom of
the page. After you have
conducted your search, you
can use the "Edit" button at
the top of your screen, then
"Find on this page" for the
specific name you searched
for.
Click to see ALTA Search for
Specially Designated
Nationals under the USA
Patriot Act
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.
email:
rkaufmann@jackscamp.com
voice: (202) 457-1600
web:
http://www.JacksCamp.com
