21 Jun Alabama, District of Columbia and Louisiana Legislative Update
The Alabama legislature recently amended its laws governing recording of instruments, effective August 1, 2012. Our December 6, 2010, February 18, 2011, May 6, 2011, and August 23, 2011 Compliance Memoranda discussed District of Columbia Acts B18-1067, 19-0008, 18-635, and A19-0147/B19-0419 effective November 17, 2010, February 11, 2011, March 12, 2011, and August 9, 2011, respectively, in which the Council of the District of Columbia (the “Council”) enacted and reenacted the District of Columbia’s Saving D.C. Homes from Foreclosure Emergency Amendment Act (the “Act”). The Council recently amended the Act, effective June 15, 2012. The Louisiana legislature recently enacted House Bill 1144, effective June 14, 2012, to provide for public notice in proceedings involving real property. The Louisiana legislature also amended its recordation, inscription of mortgages, tax sales and privileges and lien priority laws. All of this legislation is effective August 1, 2012.
Alabama Senate Bill 216
Except for instruments that convey only leasehold easements, or licenses or the recordation of copies of instruments evidencing original transfers of title to land by the United States or the State of Alabama, any instrument presented for record must be accompanied by proof of the actual purchase price paid for the property or if the property has not been sold, proof of the actual value of the real or personal property, which is the subject of the instrument being recorded. The Department of Revenue (the “Department”) will develop a form, which must be used for attesting to the actual value or actual purchase price of the property. The form will include only information related to the actual value or actual purchase price of the property. Any person utilizing the form developed by the Department must attest to the accuracy of the information being provided on the form, but will not be required to provide any further documentation or proof of the actual price or actual value of the property.
Upon presentation of any instrument for record, the judge of probate will calculate the amount of tax due based upon the actual purchase price paid or the actual value of the property. If no proof is provided at the time the instrument is presented for recording, the amount of the tax due will be based upon the value of the property as determined by the most recent assessment of property, and the judge of probate will assess penalties as set out below to be paid in addition to the tax due.
Any person who submits an instrument for recording and intentionally fails to submit proof of the value of the property or the actual purchase price paid for the property following a specific request for such proof from the probate office or who presents false proof of same, in addition to payment of the tax due as calculated on the actual value of the property, must pay a penalty of $100 or 25% of the privilege or license tax actually due, whichever is greater. A person submitting the required attestation form will not be deemed to have submitted false proof or otherwise be subject to liability where the form was submitted and attested to in good faith.
Failure or falsity of proof of the actual purchase price or value will not in any way affect the instrument recordation or the notice provided by the recording.
District of Columbia B19-0785
A foreclosure sale of property secured by a residential mortgage will be void if a lender files a notice of intention to foreclose on a residential mortgage without a mediation certificate. A borrower will have the same rights to assert a claim for a defective notice of default on residential mortgage as the law provides for a defective notice of intention to foreclose on a residential mortgage.
Except as provided above, a mediation certificate will serve as conclusive evidence that all other provisions of the Act and implementing regulations have been complied with and can be relied upon by a bona fide purchaser and a bona fide purchaser’s lenders or assigns.
Nothing in the Act will be construed to limit a borrower’s right to assert a claim for fraud or monetary damages against the borrower’s lender.
There is established as a nonlapsing fund, the Foreclosure Mediation Fund (the “Fund”), into which will be deposited the fees and penalties generated by the Foreclosure Mediation Program (the “Program”), the District’s share of the proceeds from the February 2012 consent judgments between the federal government and participating states, and any future designated settlements or funds. The February 2012 consent judgments are with Citibank, Wells Fargo, Ally Financial as successor of GMAC, Bank of America, and J.P. Morgan Chase.
The Fund will be used for one or more of the following purposes:
- Payment of mortgage-related or foreclosure-related counseling;
- Mortgage-related or foreclosure-related legal assistance or advocacy;
- Mortgage-related or foreclosure-related mediation;
- Outreach or assistance to help current and former homeowners secure the benefits for which they are eligible under the mortgage-related or foreclosure-related settlements or judgments; and
- Enforcement work in the area of financial fraud or consumer protection.
Louisiana House Bill 1144
Notwithstanding any provision of law to the contrary, when advertisements are required to be made in relation to judicial proceedings, in the sale of property under judicial process, or in any other legal proceedings of whatever kind in a parish that contains a municipality with a population of 300,000 or more, the advertisements and legal notices must be published in a newspaper or other publication that:
- Is located in the parish;
- Is published in English at least weekly;
- Meets the requirements of a newspaper under Louisiana law; and
- Has maintained a total circulation of a least 30,000 for at least 5 consecutive years prior to it being selected.
The newspaper or other publication will be selected in June of each year, for a term of one year, by the sheriff, constable, clerk, or other officer, as the case may be, who is charged with the conduct of such sales requiring advertisement.
Louisiana House Bill 469
If at any time the trust property of either an inter vivos trust or a testamentary trust includes immovable property (real property) or other property the title to which must be recorded in order to affect third parties, a trustee must file the trust instrument, an extract of trust, or a copy of the trust instrument or extract of trust certified by the clerk of court for the parish in which the original trust or extract of trust was filed, for record in each parish in which the property is located.
If the trust instrument also contains a transfer of immovable property or other property to the trust, the title to which must be recorded in order to affect third persons, then the extract must contain a brief legal description of the property.
Unless the trust and abstract of trust recite or otherwise note any modification or restrictions of the trustee’s powers or duties, the trustee will have all of the powers and duties granted to trustees under the Louisiana Trust Code.
Louisiana House Bill 452
The clerk of court now has the sole responsibility in Louisiana of canceling inscriptions of mortgage certificates ordered by the sheriff. Previously the recorder of mortgages for Orleans Parish was authorized to cancel such inscriptions in Orleans Parish.
It will not be necessary to delete, cancel, or partially release inscriptions that may appear on a mortgage certificate in connection with a judicial sale for the following:
- Any assignment, assumption, or modification of a canceled mortgage.
- Prescribed judicial mortgages, which have not been reinscribed or for which no notice of pendency of action of a revival action is shown on the mortgage certificate.
The sheriff will proceed with the judicial sale without regard to inscriptions on a mortgage certificate.
Louisiana Senate Bill 605
The Louisiana legislature recently amended Louisiana law governing tax sales.
A tax collector is not prohibited from sending more than one notice of tax sale.
No later than the first Monday of March of each year, or as soon thereafter as possible, the tax collector will search the mortgage and conveyance records of tax sale eligible property to identify its tax sale parties.
Prior to the tax sale, the tax collector will send a written notice by certified mail, return receipt requested, to each tax sale party, which includes the lender. The notice will advise the person that it is required that the statutory impositions on the immovable property (real property) be paid within 20 days after sending the notice or the tax sale title to the property will be sold according to law. There is a prescribed notice.
In the absence of actual notice of the sale to a lender or the demonstration of a reasonable effort to provide notice, where the name and address of the lender was reasonably ascertainable or where the transfer was recorded after the tax collector completed his or her pre-sale tax sale party research, the tax collector will cancel the sale of the property and refund the tax sale purchaser the tax sale purchase price.
For each transferred property upon which a tax sale is cancelled, the tax collector will send the transferee a tax notification, inclusive of tax sale costs accrued.
The tax sale will be conducted on any weekday within the legal hours for judicial sales, with bidding opening not earlier than 8:00 a.m. and closing no later than 8:00 p.m. If a tax sale is conducted by using an online or electronic bidding process that is conducted over the course of multiple days, bids may be placed on any day at any time on any sale property upon which bidding has not closed, provided that all sales of property close on a weekday within the legal hours for sale.
For each property for which tax sale title was sold at tax sale to a tax sale purchaser or adjudicated to a political subdivision, each collector must within 30 days of the filing of the tax sale certificate, or as soon as practical thereafter, provide written notice to the interested parties that tax sale title to the property has been sold at tax sale. The notice must be sent by postage prepaid U.S. mail to each party whose interest would be shown on a 30-year mortgage certificate in the name of the tax debtor and whose interest was filed prior to the filing of the tax sale certificate.
The notice must specify the property upon which the taxes are delinquent, the amount of taxes due, and the manner in which property will be redeemed.
Louisiana House Bill 941
A person acquiring or intending to acquire a mortgage, privilege, or other right in real property may rely upon an affidavit made by a registered or certified engineer or surveyor, licensed architect, or building inspector employed by the city or parish or by a lending institution chartered under federal or state law, that states he or she inspected the real property at a specified time and work had not then been commenced nor materials placed at its site to establish priority regardless of whether work has begun or materials were delivered to the job site after the effective date of the affidavit, but prior to the recordation of the mortgage, privilege, or other right, provided that the document creating the right was filed before or within 4 business days of the filing of the affidavit.