Head's Up: Hidden Title Challenges

Long gone: drama-free, plain-vanilla deals, says Stewart Title DC office VP & associate senior underwriting counsel Gary Cortellessa. As the local market continues to surge, investors, particularly those from out of town, are confronting some of the subtle title intricacies to overcome (or what Gary calls “hair on the deal”) in the DC Metro market. A typical example for Stewart Title was an Old Town Alexandria waterfront project regarding water rights issues and boat basins. Another potential roadblock: the DC Tenants Opportunity to Purchase Act (TOPA), which gives residential tenants a first right of refusal. In Maryland, there are less stringent requirements to satisfy prior to the sale of a multifamily project that vary by county. There could also be issues hiding in large acreage: old restrictions still on the books that may hinder construction or development. Gary’s also been proactively helping clients make sense of the recordation tax issues and how to reduce these taxes through refinancing or amending and restating the security instrument. E-recording is helping to quicken and simplify closings in DC, Virginia and nationally. Baltimore City is trying a pilot program for e-recording (the first in Maryland). Gary sees investments in multifamily and mixed-use projects continuing to be strong so far, with assisted-living projects gaining momentum. For more information on our Bisnow partner, click here.