District of Columbia Real Estate Practices

Attorney Involvement

Please describe any requirements under applicable state law for attorney, abstractor or other special professional involvement, for example, in the search, examination, opinion of title, signing, closing, disbursement, recording, preparation of documents, and/or policy-issuance.

Both attorney and lay settlement agent closings are permitted in the District of Columbia.  All title insurance producers must be licensed.  Only a licensed producer can conduct a closing in which a title insurance policy will be sold.  Preparation of a deed is considered the practice of law.  There are no licensing requirements for abstractors in the District of Columbia. We ask that each of our agents only hire competent abstractors that carry sufficient errors and omissions insurance. We usually ask that these policies add us as an additional insured. See DC Bulletins 2010004 and 2011001.

Cancellation/Commitment Fee

Does your state permit or require a cancellation fee or commitment fee upon cancellation?

There is no restriction on these fees in the District of Columbia.

Certificate of Release (of Mortgage)

If anyone other than the lender (such as a title agent, settlement agent, underwriter or attorney) has the authority to release the security instrument, please describe.

A title agent that paid off a loan may release the lien by recording an affidavit along with the original promissory note. See DC Code 42-818.02.

Deeds

Please describe the kinds of deeds that are customary for commercial and residential transactions.  Please describe the kinds of deeds that are generally not insurable.

Typically, General Warranty or Special Warranty deeds are used to transfer title. Some Personal Representatives’ deeds contain limited warranties. Quit-claim deeds are only insurable on a case by case basis. 

Joinder of Spouses

If a non-title holding spouse is required to join in the execution of a deed or a security instrument, please describe.  Any analogous rights, such as those in a civil union or equivalent, should also be addressed. 

The District of Columbia has abolished both dower and curtesy. No requirement exists for spousal joinder. See DC Bulletin 00020.

Mortgage Tax

Is there a mortgage tax in your state?  If yes, is it uniform across the state or does it vary?  If it is uniform, please describe.  

There is a single land records and taxing authority for the District of Columbia.  Residential deeds of trust are not taxed so long as they have the appropriate Security Affidavit attached.  Otherwise, the recordation tax on a deed of trust is 1.45% of the loan amount.  The Recordation Tax is also applicable to deeds and transfers of economic interests in entities that own real estate.  See DC Code 42-1101 et seq.

Payment Customs

Who customarily pays for:

(a) Owner’s Policy?
(b) Transfer Tax & Recording Fee?
(c) Survey Charges?
(d) Closing/Settlement Fees?

 

(a) Owner’s Policy? Buyer.
(b) Transfer Tax & Recording Fee? Split per contract or if not provided for, seller pays the Transfer Tax on the Deed and the purchaser pays the Recording Tax on the Deed and Deed of Trust. 
(c) Survey Charges? Buyer.
(d) Closing/Settlement Fees? Varies but usually paid by buyer.

Policy Countersignatures

Please describe any statutory or regulatory requirements for countersignatures in order to issue the policy (for example, residency requirements).

The signature of a licensed title producer is required in order to issue a title policy.

Real Estate Taxes

Please describe the general tax year, due dates, and delinquency dates, including lien dates and payment cycle.

The tax year is a fiscal year running from October 1 through September 30. Taxes are paid in equal semi-annual installments.  Due dates are March 31 and September 15. Agents are required to obtain Tax Certificates from DC confirming the status of payment.  DC aggressively pursues tax sales of properties in the year following any delinquency.  See Office of Tax and Revenue web site: http://otr.cfo.dc.gov/otr/cwp/view,a,1330,q,594366.asp

Search and Examination Fees

Is it permissible and/or customary to charge a separate search and/or examination fee, and under what circumstances?  If your jurisdiction is all-inclusive, please state that.

Yes, it is permissible provided it meets RESPA requirements.

Search Requirements

Is there a minimum period of time for a title search required: (a) by state law, (b) pursuant to marketable record title acts, or (c) by any other applicable title examination standards (e.g., state bar association)?  Please respond to each category.  If a minimum search period exists for any category, please state it.

There are no statutory guidelines in the District of Columbia for title searches.  We follow the Stewart Title Guaranty Co. underwriting guidelines concerning search requirements. 

Security Instruments (Deed of Trust vs. Mortgage)

Please describe the customary and permissible form(s) of security instruments used in your state. 

Who can be listed as the trustee on the Deed of Trust (e.g., residency and/or natural person requirements, etc.)? Can an underwriter or title agent be designated as the trustee, and, if so, is it customary?

Deeds of trust are used almost exclusively. A mortgage would be enforceable but would necessitate court action to enforce.

There are no restrictions in the District of Columbia as to who may act as a trustee.  Trustees do not need to be DC residents and can be an entity or a person.

Standard Exceptions and Requirements

Please identify the standard exceptions and requirements that are customarily used in your state. 

STANDARD EXCEPTIONS

  • Rights or claims of parties in possession not recorded in the public records.
  • Easements, or claims of easements, not recorded in the public records.
  • Encroachments, overlaps, boundary line disputes, or other matters which would be disclosed by an accurate survey and inspection of the subject property.
  • Any lien, or right to a lien, for services, labor, or material hereto or hereafter furnished, imposed by law and not recorded in the public records.
  • Taxes or special assessments which are not recorded as existing liens by the public records.

We require our agents to take exception for water and sewer liens since these have super priority just like real estate taxes.  We also require our agents to take exception for tenant purchase rights if the property is a residential rental property. 

State-specific Policy Variations

If there are state-specific changes to the provisions in the ALTA policies (e.g., Arbitration, Minerals), please describe.

The arbitration provision must be deleted from all policies.

Title Insurance Form and Filing Regulations

Please describe the form and/or rate filing requirements, if any, related to policies and endorsements.  Please describe any applicable rating bureau. 

All policy forms and rates must be filed with the Department of Insurance, Securities and Banking.  Discounting of title premiums is not permitted.   

Transfer Taxes

Is there a transfer tax in your state? If yes, is it uniform across the state or does it vary?  If it is uniform, please describe.

There is a single land records and taxing authority for the District of Columbia.  The Transfer Tax is 1.1% of consideration if the consideration is less than $400,000.  Otherwise, the transfer tax is 1.45% of the consideration.  The Transfer Tax applies to deeds and transfers of economic interests in entities that own real estate.  There is no transfer tax on a deed of trust.  See DC Code 47-901 et seq.

Usury

Is usury coverage available?

Yes. Considered an extra hazardous risk, however generally not a major issue. The basic ceiling is 24% but all commercial loans in excess of $2500 are exempt.  See DC Code 28-3301.

Withholding Taxes

What are your state’s requirements, if any, with regard to withholding proceeds from a sale, similar to but not including FIRPTA?

There is no such requirement in the District of Columbia. 

Witness Requirements

Are witnesses required on a deed or security instrument?  If so, please describe.

Attestation by a notary public is required.  There is no requirement for a witness.