Did you know… that beginning this summer all parties in DC transactions will have to certify that there are no unpaid taxes or charges before an instrument will be recorded?

The District’s coversheet for recorded instruments, the FP7/C (often referred to as the “FP7”) has been revised. Effective July 1, 2016, the parties to a transaction will sign a self-certification on the FP7 stating that “there are no unpaid recordation or transfer taxes, or unpaid taxes, assessments or charges that may be collected under chapter 13A of Title 47 of the D.C. Official code.” The reason for this change is that by statute (§42-407 http://www.lexisnexis.com/hottopics/dccode/) the recorder of deeds is not to record any instrument for which taxes, assessments or charges are owing “under chapter 11 of this title [recordation taxes], under chapters 9 [transfer taxes] and 14 [late filing fee] of Title 47, or to a taxing agency as defined in § 47-1330(8)…” The self certification states that there are no unpaid charges that may be collected under all of chapter 13A of Title 47; not just to taxing agency defined in §47-1330(8). Chapter 13A is the tax sale provision of the DC Code and the charges due under it are much broader than the taxes due to a taxing agency. For example, attorney fees and fees for advertising the notice of the tax sale in at least 2 newspapers are some of the charges due under Chapter 13A.

Additionally, if the parties are claiming an exemption, and therefore are not paying a tax that otherwise would be due, should the exemption be disallowed, the parties will be responsible for the tax, penalty and interest from the time that the tax was due.