Legislation, DC, TOPA ("Tenant Opportunity to Purchase Act"): Councilmember Jim Graham introduced legislation that sought to eliminate the "95/5" exclusion from TOPA. While the Bill passed, there does not yet exist a written version of the Bill that actually passed. There were some amendments made on the day of the vote and the General Counsel for the Council is busy incorporating those changes into something coherent. The title industry did not take a position on what rights tenants should or should not have. But, in the event that rental property is sold, the industry was insistent that there be a method of determining whether tenants rights were effectively exercised, exhausted or honored. The industry hopes that the final Bill addresses these issues and there will be further treatment of this topic when the written version is available. In the meantime, watch for new underwriting guidelines. David Cox, of Jackson & Campbell, President of the DC Land Title Association, Elizabeth Zajic, member of the Board of Directors of DCLTA and, Roy Kaufmann, of Jackson & Campbell, lobbyist for DCLTA, were all very active on this legislation.

Court Action, DC, TOPA. The DC Court of Appeals in Independence Mgt Co. v. Anderson also had occasion to address TOPA. Buyer and Seller had a contract, subject to tenant rights. Time was of the essence. When the tenants exercised their rights, Buyer held off on further feasibility study, loan application, etc., but made it clear that Buyer wanted to consummate the transaction if the tenant purchase fell through. The tenant purchase did collapse and, a few weeks later, the Seller demanded that the Buyer settle in 10 days or be held in default. The Buyer tried in vain to get a more reasonable time period within which to take the steps to be ready to close. Seller held fast, claiming "time was of the essence". Court held that the contract was unclear as to the time period within which the Buyer had to settle after collapse of the tenant contract. As such, the Court read into the contract and determined that a "reasonable time" had to be given. In this case, the Court found that a reasonable time was 60 days. Accordingly, the Court upheld the lower court's order that the Seller specifically perform. The key here is to amplify sales contracts beyond the boilerplate to address similar situations.

Legislation, DC: Uniform Real Property Electronic Recording Act of 2005. This Bill (16-173) was reviewed by the Committee of the Whole today and is scheduled for a final vote of the City Council on June 7. The bill will legislate the effectiveness of recordation of digitized images of documents.*

Legislation, DC: Mechanic's Lien Amendment Act of 2005. This Bill was introduced by Councilmember Schwartz and would clarify (and clean up) some of the historic problems encountered with this statute. One issue raised was whether the Notice of Intention to Hold a Mechanic's Lien should reference the original amount of the contract, or, perhaps more reasonably, the amount to which the contractor may swear is still owing. The Bill also preconditions the ability to file mechanic's liens upon proper licensing as a contractor and provides for the automatic avoidance of the lien if suit is not undertaken within 180 days thereafter and requires a Lis Pendens to be filed shortly thereafter.*

New Federal Rules Mandate Document Shredding: Effective June 1, 2005, the Fair and Accurate Credit Transactions Act of 2003, Pub L. 108-159, 117 Stat. 1952 (the "Fact Act") affects title companies, mortgage companies, insurers, landlords, management companies and similar organizations that may come into possession of consumer information "derived from consumer reports for a business purpose...." 15 U.S.C. 1681w(a)(1). These entities must properly dispose of such information by taking reasonable measures to protect against unauthorized access to, or use of the information in connection with its disposal. That means you cannot just throw files in a dumpster (there was a recent television expose on a mortgage company that did just that wherein the reporters searched the trash, found social security numbers and called the borrowers to ask if they knew that their confidential information was "up for grabs"). When it comes time to dispose of sensitive documents, the hard copies have to be destroyed (schredder, burning, etc.) and, if you are selling or discarding computers, the disks have to be cleaned by some software. While this requirement is currently limited to information gleaned from credit reporters, the same precautions for disposal should be taken if your files contain confidential information.

DC Court of Appeals. The DCCA's opinions can be viewed and sorted on its new website at www.cadc.uscourts.gov

Court Action, DC Court of Appeals: Excellent discussion of easements for light, "negative" easements (i.e. "he promised he would not obstruct my window"). All at Hefazi v. Stiglitz

DC Corporations Division, DCRA. Kudos to the Corporation Division because corporate records are now available on line! Imagine, online verification of good standing and registered agents! http://mblr.dc.gov/corp/index.shtm (will be added to resources list below).

Maryland, Obtaining a Subdivision Plat Electronically. It is now possible. Click here for a beginner's guide Here is the procedure: First Search for property by county, then street address and print the page"... Then Click here and use Username plato, password: plato# (all lower case)

General Title Law: Policy rights expire when property is transferred. The policy is not revived if the property is deeded back to the original Grantor. It was irrelevant that the grantee was a corporation wherein the Grantor was the sole shareholder. Morale: in transfers of real estate to family members, LLCs, Family corporations, or revocable trusts, make sure you obtain a title endorsement or you will have voided coverage. Stevens v. Dakota Title & Escrow, 2004 WL 2381386 (Neb. App.).

Resource for Compliance with Servicemembers Civil Relief Act: www.ServicemembersCivilReliefAct.com (formerly Soldier's Sailor's Act)

Upcoming Seminars and Continuing Education:

Center for Negotiation Strategy. "Cutting Edge Negotiation Strategy" May 19 & 20. At the Hyatt Regency in Crystal City. Over the past 15 years there have been enormous advances in the burgeoning field of negotiation analysis. This unique program synthesizes these advances into practical tools for lawyers, putting them at the cutting edge of negotiation strategy. Jim Schaller (President of Jackson & Campbell, P.C.) will be speaking for one hour on Ethical issues that arise in negotiations. Click here for details

Ethical Tactics. June 7. In this age of an aggressive and resourceful plaintiff's bar, defense counsel must be mindful of ethical and professional tactics to use in and out of the courtroom that will most effectively represent their clients. This program will provide information concerning lawyers' ethical obligations and discuss how those obligations impact representation of clients in real cases. Taught by Jim Schaller (President of Jackson & Campbell, P.C.) Click here for details

Seminars and Continuing Education Recently Held:

Community Association Institute DC Legislative Action Committee Annual Update took place earlier this month. Presentation of interest to community associations (i.e Condo and Coop Associations and management companies) as well as relevant case law made by David Cox and Rachel Cruz, both of Jackson & Campbell, P.C.

DC Bar: Annual Legislative Update to the Real Estate Section presented by David Cox and Rachel Cruz, both of Jackson and Campbell.

National Business Institute. Title Law: Solutions to the Most Common Problems (Rebound from surprises and setbacks to keep real estate transactions on track) was taught by David Cox and Vernon Johnson (Jackson & Campbell) and by Elisabeth C. Zajic (First American Title Insurance Co.). Held on April 18.

Examining Real Estate Titles and Surveys. Conducted by National Business Institute. Lecturers: Roy L. Kaufmann of Jackson & Campbell, P.C. and Eric M. Schneider of Fidelity National Title.

* Roy Kaufmann testified in support of this legislation.

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 considered legal advice. 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.