Bulletin: DC2012001

Date:
March 26, 2012
To:
All District of Columbia Issuing Offices
RE:
Execution and Recordation in the District of Columbia

Dear Associates:    

We are all well aware of the basic requirements for executing and recording documents with the Recorder of Deeds of the District of Columbia.  However, the District of Columbia does have a number of unique requirements that must be complied with in order to successfully close and insure transactions.  The following is a brief summary of some of these issues.

Powers of Attorney

By statute, documents may be executed by an attorney in fact so long as the specific statutory requirements are complied with.  A DC power of attorney must be in the same form as a deed and must be recorded with or prior to the instrument that is being executed by the attorney in fact.  If you are relying on a previously recorded power of attorney, the instrument that you are recording must reference the power of attorney by recording date and instrument number.

DC powers of attorney must also contain on the top of the front page, in bold and capital letters, the following words: 

"THIS POWER OF ATTORNEY AUTHORIZES THE PERSON NAMED BELOW AS MY ATTORNEY-IN-FACT TO DO ONE OR MORE OF THE FOLLOWING: TO SELL, LEASE, GRANT, ENCUMBER, RELEASE, OR OTHERWISE CONVEY ANY INTEREST IN MY REAL PROPERTY AND TO EXECTUE DEEDS AND ALL OTHER INSTRUMENTS ON MY BEHALF, UNLESS THIS POWER OF ATTORNEY IS OTHERWISE LIMITED HEREIN TO SPECIFIC REAL PROPERTY." 

As an underwriting matter, please also obtain an affidavit from the attorney in fact stating that the power of attorney has not been revoked and that the principal is alive and well.

Corporate Signatures

DC has an unusual requirement when a deed or deed of trust is executed by a corporation. DC Code  §42-602  provides that the deed of a corporation shall be executed and acknowledged either (1) by an attorney-in-fact appointed for that purpose or (2) without appointment, by its president or a vice-president if also attested by the secretary or assistant secretary of the corporation.  The way to comply with this requirement is to include special language in the "in witness whereof clause" like the following: 

IN WITNESS WHEREOF; ABC Corporation has caused these presents to be executed in its behalf by _____________________ its vice president and by the execution and delivery of these presents; the said ABC Corporation does appoint ______________________ (signor) its true and lawful attorney in fact to execute; acknowledge and deliver these presents as its lawful corporate act and deed. 

Wet Settlement

DC’s Wet Settlement Act applies to purchase money loans.  Among other things, it requires that the documents be recorded and all funds disbursed within 1 business day of closing. 

Prompt Recordation

Pursuant to §47-1431 of the DC Code, all deeds, deeds of trust and other instruments affecting title to real property must be recorded within 30 days after execution.  A $250 penalty is imposed if you fail to timely record a deed.  In addition, failure to record a deed of trust within 30 days of the purchase will prevent the purchaser from claiming the purchase money exemption from recordation tax.

FP7/C Form

All deeds and deeds of trust must be accompanied by a completed and signed Real Property Recordation and Transfer Tax Form FP7/C.  The current version of this form may be found at the Recorder of Deeds web site http://otr.cfo.dc.gov/otr/cwp/view,a,1328,q,593393.asp

Transfers of Economic Interests

In many jurisdictions, when an entity is the property owner, recordation taxes can be avoided when the property is sold if the interests in the entity are transferred and a deed is not recorded.  In the District of Columbia, this is generally not the case since a transfer of more than a 50% interest in an entity is taxed as a transfer of the property.  In those instances, the parties are required to record an Economic Interest Deed (form on the Recorder of Deeds web site) along with a FP7/C.
 
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.  

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None