2019 Connecticut Legislative Update
The 2019 legislative session adopted a $43 billion budget. They also passed a few important bills relating to real estate. Below is a brief summary of these bills:
Senate Bill 320. An Act Concerning Real Estate Closings and Attorneys and Law Firms Preferred by Mortgage Lenders. This important piece of legislation passed out of both the Senate and the House and will become law effective October 1, 2019. The bill expressly codifies that “no person shall conduct a real estate closing unless such person has been admitted as an attorney in this state….” For purposes of this subsection, “real estate closing” means a closing for (1) a mortgage loan, other than a home equity line of credit or other loan that does not involve issuing a title policy . . . ., (2) any transaction wherein consideration is paid by a party to effectuate a change in the ownership of real property in Connecticut.
Senate Bill 833. An Act Concerning Validation of Conveyance Defects Associated With An Instrument That Was Executed Pursuant to A Power of Attorney. This bill will become part of CGS §47-36aa, the Validating Act, on October 1, 2019. The bill will validate a deed that is recorded pursuant to a Power of Attorney, but which Power of Attorney is not recorded, so long as the deed has been of record for fifteen (15) years and no action has been commenced to set aside the deed. The only exemptions to validation will be (1) if the fiduciary in the deed is also the grantee (self-dealing), or (2) the deed fails to state the consideration reflecting fair market value.
Mansion Tax. Included in the budget is an increase to the CT State Conveyance Tax (the “Mansion Tax”) on the sale of residential real estate. The CT State Conveyance Tax will now include a third layer which begins at $2,500,000.00 and carries a tax rate of 2.25%. This will only apply to the portion payable to the State of Connecticut. Sales up to $800K are taxed at 0.75%. Sales from $800,000 through $2,500,000 are taxed at 1.25%. Sales that exceed $2,500,000 are taxed at 2.25%. The effective date has not yet been confirmed.
