DCLTA Meeting with Recorder of Deeds and Office of Tax and Revenue Regarding Homestead Tax Reduction Concerns

Several members of the DC Land Title Association Board of Directors met with senior members of the District of Columbia’s Recorder of Deeds Office, Assessment Services Division and Office of Tax and Revenue (OTR) on December 13, 2023 to discuss concerns the industry is having related to the filing of the Homestead/Senior Tax Exemption application. In the way of background, in 2020, the OTR’s Homestead Unit implemented a new policy with required the mandatory electronic filing of the Homestead Deduction, Disabled Senior Citizen and Disabled Property Tax Relief Application (ASD-100) This change went into effect as of October 1, 2021.

DCLTA Vice President Chris Darby began the discussion by pointing out some general areas concern title companies are experiencing with this transition from submitting a hard copy of the ASD 100, filled out at closing by the buyer to the new requirement that it be submitted electronically through an OTR portal.  This new process requires that the buyer submit this application Post-Closing, outside of the closing table. Given the general overwhelming nature of a real estate closing, we suspect that there are many buyers simply forgetting to submit these applications online when they leave the settlement company office.

In response to this concern, Frank Bessenyei, the Division Chief for Assessment Services at OTR suggested that perhaps his office put together a one pager to be provided to the buyers at closing and included in the hard copy of closing docs they take home. This document would provide step by step instructions on how to apply for the homestead/senior citizen and/or disabled property tax relief application, along with further detail regarding the time frame the buyer can expect to see their application either approved or denied and other relevant information association with the new filing system. The industry acknowledged that for many title companies this is already taking place but acknowledged the value in their being a standardized set of instructions, crated by OTR for all title companies to provide to their buyers.

The next issues brought to the attention of the District staff is the requirement found in the D.C. statute that a copy of the Homestead Application and proof of its submission be attached to the FP7-C at the time of recording when the buyer is a first time DC homebuyer and applying for the reduced Recordation Tax Rate provided to these individuals. Ida Williams, the Recorder of Deeds, reminded the industry representatives that in addition to submitting the hard copy of the application, they must also file the ASD-100 electronically with the Homestead office. Ida indicated that there is some evidence of these not being recorded electronically when auditing taxpayers accounts and reviewing whether the applications are getting filed.

It was suggested that we remind our members as to what exactly is required when presenting the Reduced Recordation Tax Rate for First-Time Homebuyers Application (Form ROD 11) and FP7-C at the time of recordation. The current mandate is that ROD will require only the following documents:

1. Screenshot of completed "Property Information" page of the Homestead online application.
2. Screenshot of completed "Owner Information" page of the Homestead online application.
3. Confirmation of Homestead submission by copy of the email confirmation as receipt or screenshot of the online receipt.

Additionally, it was advised that the deed must be recorded within a few business days of the electronic homestead application in order to avoid the risk of that the buyers homestead application will be denied due to the deed being presented for recordation weeks later.

Kevin Anderson, President of DCLTA, next discussed the issue being found when conducting closing of newly created condominium conversion projects. In this case, while the OTR has issued new 2000 lot numbers for the unit units, it is taking weeks to months before these lot numbers become visible on the OTR website. It then becomes impossible to file a Homestead Application until such time as the lot numbers become visible in the OTR system.

Frank Bessenyei, provided the solution to this issue (though it won’t be available until October of 2024). The District is currently working on a major upgrade to their operating system, called Core 21. This new system will provide that any new lot numbers issued by OTR, such as the new condominium lot numbers issued once a project is completed, be instantaneously visible to the public on the OTR online system, www.mytaxdc.gov. While this will certainly resolve this aspect of the Homestead credit, Kevin pointed out that while this is a great and welcome change in DC reporting capability, we still have 12 months to develop an alternative to the current solution. Currently, either the tile company or the buyer are required to monitor the OTR website until such time as the lot numbers become visible at which point the buyer may submit their Homestead application electronically. Given the potentially lengthy time span from the date of closing until the time the lot numbers become visible, Frank suggested a separate meeting with Kevin Anderson and anyone else interested in this issue to try to develop a temporary solution to this problem.

Chris Darby and Katie Griffin brought up the final issue discussed in the meeting and that being the audits associated with the Homestead Tax Reduction. Among other aspects of the audit process, a conversation was had regarding the ordering by title companies of Tax Certificates as part of a settlement and exactly what assurances we as an industry can derive from that document. Frank Bessenyei, offered to have a more in depth conversation with Chris Darby and any others in the industry to discuss these audits in more detail and possible solutions to some of the concerns we see as a result of these audits.

The meeting closed with a comment and suggestion from Frank Bessenyei, that we schedule these types of meetings on a regular basis (quarterly perhaps) allowing for both the industry and DC Government discuss any ideas, concerns or issues being realized by both groups. success being that to have the most effective partnership between the industry and DC Government

Should you have question or comments regarding this important meeting, please contact either Mark Bennett, the DCLTA Executive Director at mark@bennett-management-llc.com or 614-579-2630 or Kevin D. Anderson the DCLTA President at kanderson@standardtg.com or 202-888-0132.