Bulletin: DC2018004

Dear Associates:

      The purpose of this Bulletin is to advise you of changes in the District of Columbia that will affect your practice effective October 1, 2018. 

Commercial Tax Rate

      Effective October 1, 2018, the Class 2 (commercial) real property tax rate will be:

• Less than $5 million: $1.65/$100.00
• $5m-$10m: $1.77/$100.00
• More than $10 million: $1.89/$100.00

First Time Homebuyer Reduced Recordation Tax

      Effective October 1, 2018, the purchase price for the eligible property will be raised to $632,500.

      Additionally, the maximum household income limits will be:

 Address Confidentiality Act

      This year DC Council passed the Address Confidentiality Act of 2018 (the “Act”). The purpose of the Act is to allow a victim of a covered offense or a covered employee to maintain the confidentiality of her or his actual address. The Address Confidentiality Program will be administered by the Office of Victim Services and Justice Grants (“OVSJG”). The District is the third jurisdiction in the nation to adopt this type of legislation; Maryland and Minnesota being the other two jurisdictions. Under DC’s law, OVSJG will designate a substitute address for a participant and receive first-class, certified, and registered mail sent to the participant’s substitute address. Individuals who apply and are certified to participate in the Address Confidentiality Program shall be certified for 3 years unless canceled, and the certification can be extended for an additional 2 years. 

      As of October 1, 2018, all District agencies (including Recorder of Deeds (“ROD”), Office of Tax and Revenue (“OTR”), Department of Consumer and Regulatory Affairs, and DC Water) will be required to mask or delete records of individuals who are certified participants in the Address Confidentiality Program. District agencies will be required to “remove publicly accessible references to the participant’s actual address, including any references on the District Agency’s website within 10 business days of receiving [a] request.” The Office of Tax and Revenue has concluded that, because addresses and lot and square numbers utilized at ROD are so intertwined, the names of participants would have to be purged from the land records. Additionally, unlike in Maryland, there is no requirement that a placeholder is added to the public records that would alert someone searching the records to contact OVSJG (or the Secretary of State as is the case in Maryland). Additionally, and again unlike in Maryland, the Act does not have a provision that would allow the OVSJG to reveal information to the title industry. 

      As you can imagine the Act will create a variety of unintended consequences for the title industry. The DC Land Title Association has been working with DC Council, ROD, and OTR to come up with a solution that would remove some of the unintended consequences of the Act on the title industry. The Recorder of Deeds and OTR have stated that all recorded documents pertaining to a participant will have the address and lot/square redacted. They are, however, considering putting an explanation for the redaction in the comments section (at the left of ROD’s online screen).  Additionally, OTR and ROD have stated that deeds and other indexed documents will be treated as follows:

Deeds: 

• WILL be indexed by the nonparticipant's name;  
• WILL NOT be indexed by Participant’s name;
• WILL NOT be indexed by Lot/Square; and
• WILL be redacted as to SSL, address, and participant’s name. 

All other Documents:

• WILL be indexed under all names, including Participant (e.g., judgments and liens);
• WILL NOT be indexed by Lot/Square; and
• WILL be redacted as to SSL and address.

The Recorder of Deeds is working with its vendor to find a solution for indexing documents in the above manner. The system for indexing in the above manner will not be in place by October 1, 2018, when DC agencies will begin to redact public records. Further, as OTR and ROD are not required by the Act to make such accommodation there is a possibility that the above indexing scheme may not be implemented. If you are handling a transaction involving a party that has disclosed to you that s/he is a participant in the Address Confidentiality Act, please contact your Stewart Title Guaranty Company Underwriter. 

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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