Bulletin: CT2019001

Dear Associates:

I. Legislation

The following real estate related bills were passed and have been signed or await signature by the Governor into law and can be accessed via the following link: https://www.cga.ct.gov/2019/lbp/lobp.htm

A. Conveyance Tax Change: Public Act 19-117 (HB7424, Section 337), effective July 1, 2020, provides that sellers of Connecticut homes will be required to pay a real estate conveyance tax of 2.25% (increased from 1.25%) with respect to the portion of the sales price in excess of $2.5 million (“mansion tax”). Related to this increase and effective January 1, 2021, taxpayers who remain in Connecticut following the sale will be permitted to take a property tax credit against their Connecticut income tax in an amount equal to 1/3 of the conveyance tax paid at the “mansion” tax rate. However, this credit does not become available until the third year after the conveyance tax is paid.

B. Transfer Act Change: Public Act 19-75 (SB 1030) effected changes to the Transfer Act that will take effect on October 1, 2019. The amendments affirmatively exclude the transfer of certain properties and businesses (that have historically been covered by the Transfer Act liability) from the requirements of the Transfer Act, including, for example, the “one-time” hazardous waste generators. 

C. Protection of Attorneys: Public Act 19-88 (SB320), entitled "AN ACT CONCERNING REAL ESTATE CLOSINGS AND ATTORNEYS AND LAW FIRMS PREFERRED BY MORTGAGE LENDERS" prohibits persons other than attorneys admitted in this state from representing the legal interests of parties to real estate closings concerning real property in this state. This act is effective October 1, 2019.

D. Validating Act Amendment: Public Act 19-85 (SB833) entitled “AN ACT CONCERNING VALIDATION OF CONVEYANCE DEFECTS ASSOCIATED WITH AN INSTRUMENT THAT WAS EXECUTED PURSUANT TO A POWER OF ATTORNEY” amends subsection ( c ) of  CGS 47-36aa by adding a new subsection that reads as follows: Any deed, mortgage, lease, release, assignment or other instrument made for the purpose of conveying, leasing, mortgaging or affecting any interest in real property in this state recorded after January 1, 1997, which instrument is executed pursuant to a power of attorney, but which power of attorney is not recorded on the land records of the town or towns where the instrument is recorded, is as valid as if the power of attorney had been recorded, unless (A) an action is commenced to avoid and set aside such instrument and a notice of lis pendens is recorded in the land records of the town or towns where the instrument is recorded within fifteen years from the date of recording of such instrument, or (B) such instrument fails to state the consideration reflecting fair market value. The provisions of this subdivision shall not apply to any conveyance where any deed, mortgage, lease, release, assignment or other instrument is executed by a fiduciary and the fiduciary is the grantee, mortgagee, leasee, releasee or assignee designated in such instrument. This act is effective October 1, 2019.

II. Recent Case Law of Note  

A. Luft v. Rochette - 65 CLR 59 - holds that the fact that a foreclosure deed omitted a reference to an appurtenant easement does not defeat ownership of the easement by subsequent owners.

B. Todd’s Hill Investment Circle, LLC v. Bell - 66 CLR 795 - holds that the individual owner of an interest in a limited liability company has no ownership interest in the real estate owned by said company and therefore a filing of a notice of interest on the land records pursuant to CGS 47-33f claiming an interest in the land is invalid. 

C. Davis v. Property Owners Assn. at Moodus Lake Shores, Inc. - 183 Conn. App. 690 - denied an implied easement claim and contains a good discussion of the elements of an implied easement and easement by prescription. 

D. Hum v. Silvester - 183 Conn. App. 489 - involved a claim of prescriptive easement over a shared driveway which was granted and contains a good discussion of the elements of a prescriptive easement. 

E. Jordan v. Biller - 184 Conn. App. 848 - is a decision where the court determined a claimed view easement was personal to the parties and did not “run with the land”. 

III. Miscellaneous

Probate Courts: The Probate Courts will be launching eFiling in the coming months. Following is a link to a notification recently sent to Bar members on this subject: eFiling will be mandatory for attorneys and optional for other users. Attorneys should review the proposed revisions to the Probate Court Rules of Procedure for guidance on use of the eFiling system. In particular, Rules 7 and 22, as well as several new definitions in rule 1, address important issues associated with eFiling. The rules are available at http://www.ctprobate.gov/news/Pages/Proposed-Revisions-to-the-Probate-Court-Rules-of-Procedure.aspx. 

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

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.