Jackson & Campbell, P.C. Update for the Title and Real Estate Industries (September 22, 2003)

Dear Real Estate Professional:

D.C. Recorder of Deeds requires all Homestead Exemption Forms filed as of October 1, 2003 to the format that ROD has published on the website www.washingtondc.gov Click here to view the Homestead Exemption Form

Maryland, as of October 1, 2003, has instituted an ambitious change. All deeds will have to recite the "total payment" generated by the sale (rather than recite this in the deed, one can also supply an affidavit). People whose principal "residence" is Maryland, would have no withholding, but others would be subject to a mandatory withholding of 4.75% of the Total Payment (for individuals) or 7% for "entities.
"Principal Residence" should be as indicated by the Seller and not based upon conclusions or determination by the settlement officer. The draft regulations seem to indicate that, not only must the person be a resident as defined under Section 121 of the Internal Revenue Code, but also the residence must be listed as "owner-occupied" with the MD SDAT. Thus, at the very least, the settlement officer should verify that status on the SDAT website.Click here to view a sample page from the website Click here for Maryland Website to determine Principal Residency

Nor is the definition of "Total Payment" as easy as transcribing HUD line 603. For example, any mortgages taken out within 120 days before the Closing may not be subtracted to determine "Total Payment". The final regulations will provide more guidance.

While the law is effective October 1, the regulations may not be effective until mid-month, resulting, no doubt, in weeks of mayhem as the clerk's offices will be as clueless as the industry, with an absence of forms and recommended language for recitals or affidavits although we have preliminary drafts of an Affidavit of Total Payment and of a Certificate of Exemption.Click here for Draft Version of Affidavit as to Total Payment Click here for Draft Version of Certificate of Exemption

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 copies of documents recorded at the D.C. Recorder of Deeds. Search by party name, lot/square, or instrument number.

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