Feb. 12, 2004 – Real estate professionals in the territory can expect shorter waiting periods for tax-clearance documents with the Finance Department initiatives now in place to address the backlog of requests, a senator and a veteran Realtor agree.
Sen. Shawn-Michael Malone, who chairs the Senate Government Operations Committee, said in a Wednesday release that Finance "is well under way in alleviating the problem of the long delay in getting out tax-clearance letters."
Malone said he had met with Finance Commissioner Bernice Turnbull and April Newland, president-elect of the St. Thomas Board of Realtors, in an effort to find a solution to the "long-standing problem" of issuing tax-clearance letters on a timely basis.
Newland said on Thursday that Turnbull was "very cooperative," and that their meeting "was very productive."
It has been taking 60 to 90 days to obtain clearances, holding up closings on property sales, Rosemary Sauter-Frett, president of the V.I. Territorial Association of Realtors, said last month. (See "Plan advanced to reduce tax-clearance delays".)
The department reportedly has a backlog of about 200 tax-clearance requests. According to Sharon Hupprich, owner of Calypso Realty, the delay in processing them started last spring.
At the end of January, Turnbull moved to reduce the backlog by ending public business hours for the Finance Department's tax-clearance office on St. Thomas at 2 p.m. each day so that personnel can work from 2 to 5 p.m. exclusively on processing the tax-clearance requests.
Turnbull did not respond to questions submitted in writing at her request concerning the effect of the new schedule on the backlog.
Three additional "corrective measures" have now been worked out, Malone's release stated:
– Research for tax clearance will now be done from 1994, whereas it had previously been gone back to 1987. This will speed up the process because pre-1994 information was not computerized, he said.
– Taxes found owing in researching tax-clearance requests submitted before Jan. 9, the end of a tax-amnesty period, will not be subject to penalties and interest.
– Copies of records showing each year taxes were paid will be attached to the tax-clearance letter as confirmation to title companies and insurers. And, as requested by title insurance companies, the Finance Department will not levy penalties or interest on unpaid pre-1994 property taxes not accrued by the current buyer, or on any taxes found to be unpaid after a clearance letter was issued.
Newland said she thinks the move to begin checking records from 1994 instead of 1987 will help in getting the letters issued on a timely basis. "That's going to take the big logjam and clear it up very quickly," she said.
Meanwhile, Malone in a separate release issued on Thursday addressed another government situation having a negative impact on the territory's real-estate industry: that personnel in the Recorder of Deeds Office on St. Thomas have been conducting title searches manually since Jan. 29, due to a computer failure. (See "St. Thomas title searches being done manually".)
Malone said he has been told by private-sector interests that when the deeds office began computer data entry, "manual data entry was precluded altogether." "With the system down, industry professionals who would like searches implemented from Sept. 1, 1999, forward allege that they are unable to get the information needed" for property closings, he said.
In a letter to Lt. Gov. Vargrave Richards, whose office includes the deeds office, Malone asked Richards to meet with him and a representative of the St. Thomas Board of Realtors "to bring us up to date on what is being done to address this matter and to discuss any possible short- and long-term solutions, if necessary."
Malone said he understands that a request for proposals for a new computer system has gone out but wants to know what will be done in the meantime "in terms of recording property information to aid in facilitating the over 200 property closings pending."
Malone also told Richards that he has submitted draft legislation to allow the Lieutenant Governor's Office to waive recently enacted stamp tax increases for buyers who filed their tax-clearance letter requests before the measure became law.
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