Close It! House of the Week: Jaw-dropping views of the Capitol, spiral staircase feature

Close It! House of the Week: Jaw-dropping views of the Capitol, spiral staircase feature

This week, we’re headed on over to a spacious penthouse loft of 1,369 square feet. This beautiful property has 2 bedrooms and 2 bathrooms, and is fitted with gorgeous, modern amenities. Also included in this residential, garden-style loft unit, is an assigned parking space and, its most unique feature, its cascading spiral staircase. It's listed at $869,000.

This condo has a two stunning, upgraded bathroom and includes two industrial style bedrooms with exposed ducts on the ceiling. In addition, the unit has a gourmet kitchen with granite countertops, new stainless-steel appliances, and an electric stove. Hardwood floors flow throughout the condo until they reach the condo’s spectacular 200 square foot private terrace that overlooks the city. Also, nearby the condo is Meridian Hill Park, perfect for those who like spending time outdoors.

Assuming a homebuyer puts down 20 percent on a conventional loan, her cash to close number will be approximately $197,834.79. Monthly payments will then be around $3,905.84 (this does not include HOA fees). For a complete picture of the cash to close, including the seller’s side of the transaction, try the Web version of Close It™ download the free Close It™ iOS app.

Seller Property Disclosure Requirements in DC

Question from an Agent:  My client, a seller of a DC property, has recently purchased a property and has never occupied it.  Is the seller still required to complete the property disclosure form or is the seller exempt?

Answer from an attorney:  There is no statutory exemption that would preclude the above seller from providing the property disclosure statement.   DC Code § 42-1301 (b), provides guidance and lists certain types of property transfers that are exempt from anyone having to fill out the Disclosure statement.  Some, but not all of these include:  transfers between co-tenants; foreclosure sales; court ordered transfers such as probate, bankruptcy, divorce; and transfers made by a person of a newly constructed residential property that has not been inhabited. 

Assignment OF TOPA Rights vs. TOPA Affidavit

I am often asked which is preferable – Assignment of TOPA Rights or a TOPA Affidavit? 

The answer is it depends on multiple factors i.e. is Owner/Seller/Landlord willing to pay consideration to a tenant; is there a ratified contract; how much time is there before settlement; etc.

Assignment

TOPA rights can be assigned with or without a contract – there must be consideration of at least $300 per current underwriting guidelines and this consideration can be in the form of cash, forgiven rent, waiver of rent, moving expenses, etc. If the rights are to be assigned before there is a contract, the agent must send out TOPA Form B via certified mail prior to the tenant signing the Assignment.  Form C will not be necessary, as the rights of first refusal will be assigned at the same time as the rights to purchase. If there is a contract, the agent must send out TOPA Form A via certified mail prior to the tenant signing the Assignment. 

Please note NOTICE either FORM A or FORM B MUST BE SENT VIA CERTIFIED MAIL TO MEET THE STATUTORY GUIDELINES AND TRIGGER THE RIGHTS SO THEY ARE ASSIGNABLE. Once the Assignment is fully executed, settlement can happen immediately – no waiting period.

Affidavit

If the agent wants to use the Affidavit, the appropriate TOPA forms must be sent via certified mail.  Ideally, the Affidavit should be signed after the 45 day period (30 days right to purchase plus 15 days right of first refusal). In most cases, the tenant will sign the Affidavit prior to the conclusion of the waiting period, but the 45 day period must pass. The reason an underwriter requires the 45 day period to pass is the affidavit is “retractable”; in other words, the tenant is allowed to change his or her mind making the affidavit no good. 

In addition, when an affidavit is used; the title company will need to get a Review of File Letter issued from the District (DCHD) prior to settlement. The Review of File letter will confirm there was not Notice of Intent to Purchase filed with the District and solidifies tenant’s intent – to purchase or not purchase.  This closes the underwriting loop and allows settlement to happen.

Judgment Creditor Lien: When does it Automatically Release in DC?

Listing Agent QuestionI have a client with a judgment creditor lien – arising from credit card debt – that has attached to the property we are trying to sell in the District of Columbia. The judgment creditor lien arose from a judgment issued in December, 2005. The judgment was issued in the amount of ~$10,000.00 at a rate of 15.50% per annum – that judgment has ballooned to over $55,000.00 courtesy of the power of compounding interest. This amount would force a short sale and cause major delays for closing. What do we do?

The Listing Agent’s question essentially boils down to this: When do judgment creditor liens automatically release in the District of Columbia?

A judgment creditor is a person or entity that has obtained a valid judgment for the payment of money from a court of competent jurisdiction. Once a valid judgment has been issued, the judgement creditor must perfect the lien by filing the judgment in the land records – this puts the world on notice that the judgment creditor has a lien against the property. Judgment creditor liens encumber the property and prevent debtors from selling the property without paying off the lien. 

DC Code §15-101, titled “Enforceable Period of Judgments; Expiration” states:

(a) Except as provided in subsection (b) of this section, every final judgment or final decree for the payment of money rendered in the – (1) United States District Court for the District of Columbia; or (2) Superior Court for the District of Columbia, when filed and recorded in the office of the Recorder of Deeds of the District of Columbia, is enforceable, by execution issued thereon, for the period of twelve years only from the date when an execution might first be issued thereon, or from the date of the last order of revival thereof.

(b) At the expiration of the twelve-year period provided by subsection (a), the judgment or decree shall cease to have any operation or effect. Thereafter, except in the case of a proceeding that may be then pending for the enforcement of the judgment or decreed, action may not be brought on it, nor may it be revived, and execution may not issue on it.

The ultimate answer to the Listing Agent’s question was that they needed to do nothing! In this particular case, the judgment was issued over twelve years ago. Federal Title & Escrow was able to verify that the judgment creditor had failed to renew their judgment creditor lien prior to expiration.  The lien automatically discharged pursuant to DC Code §15-101, and the settlement closed without a hitch.

 

Owner Occupancy

I often get asked at the settlement table - Why are 5 different lender documents required if the borrower is going to occupy the property?

The answer is the interest rate and the type of loan offered by the lender may be directly related to owner occupancy. If the property will be owner-occupied, the client usually gets a better deal on the interest rate and fees. The theory being owner occupants typically take better care of the property, are more likely to protect the lender’s interest in the property and are less likely to walk away from the property. At closing, the borrower will sign a Deed of Trust to secure the loan against the property and the Deed of Trust says the following:

“Borrower shall occupy, establish and use the Property as Borrower’s principal residency within 60 days after the execution of this Security Instrument and shall continue to occupy the property as Borrower’s principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless extenuating circumstances exist which are beyond Borrower’s control.”

The lender wants to be sure that it is your intention on the day of signing is you will be living in the property as your principal residence for at least a year and within 60 days.

 

 

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