Consider Carefully The New Certification Required Under The Revised D.C. FP7

The D.C. Recorder of Deeds announced today that it has revised the Real Property Recordation and Transfer Tax Form FP 7/C (herein “FP7C”). The purpose of this revision was to “contain a self-certification of compliance with tax payment, per DC Code § 42-407(2).” That statute, reprinted below, says that D.C. shall not record if any Transfer tax, Recordation tax, or late-filing fee is owing:

Ҥ42-407. Instrument not properly executed or acknowledged not recordable.

The Recorder of Deeds shall not:

(2) Accept for recordation any deed, as defined in § 42‑1101(3), concerning real property in connection with which taxes, assessments, or charges are owing under chapter 11 [RECORDATION TAX] of this title, under chapters 9  [TRANSFER TAX]   and 14 [REQUIREMENT TO RECORD WITHIN 30 DAYS] of Title 47 …”

But, the certification on the new FP7 goes much further. The buyer and seller are asked to certify that there are no “assessments or charges that may be collected under [47-1330 et seq. which is] Title 47, Chapter 13A and deals with tax sales.

Query as to how a purchaser could so certify. Also, the extent to the seller’s certification is very broad. Consider the following:

The categories of “assessments or charges” that can be collected under Chapter 13A is extremely broad.  It includes:

” ‘Costs’: mounts paid or payable by a tax sale purchaser to the District in connection with the sale of a real property. 47-1330.

‘Tax’: unpaid real property tax owing as of October 1, including penalties, interest, and costs. The term shall include an assessment or charge due at any time to the District and certified to the Mayor for collection under this chapter in the same manner as a real property tax, along with permitted penalties, interest, and costs. 47-1330

Interest at the rate of 1.5% per month. 47-1334

Fees for advertising by the District and other District fees. 47-1342

All other amounts due  under 47-1361(a). Warning, although this is the tax sale chapter, the definitions of amounts that “may be collected” under this Chapter are very broad and may apply even if there is no tax sale involved. See 47-1361(a):

(a)  “(5) All other taxes to bring the real property current;

(5A) Any delinquent special assessment re: any energy efficiency loan agreement…

(6) … all expenses for which the tax sale purchaser is entitled to reimbursement under § 47‑1377;

(7) All expenses owing to any other [tax sale] purchaser; and

(8) If judgment of foreclosure of the right of redemption of the sale is set aside, the reasonable value, at the date of the judgment, of all reasonable improvements made on the real property by the purchaser and the purchaser’s successors in interest, subject to § 47‑1363.

(b) Notwithstanding subsection (a)of this section, payment of all real property tax liens and permitted accruals assigned or sold and transferred to third parties under § 47‑1303.04 shall be required before a person may redeem under this chapter.