On Sept. 25, the District of Columbia Court of Appeals affirmed that Commonwealth Land Title Insurance Company, as subrogee for its insured COMM 2013-CCRE12 K STREET NW, LLC, was liable for over $1 million in transfer and recordation taxes related to a ground lease at 2900 K Street NW. The case began in 2013, when Lano/Armada Harbourside, LLC sold five condominium units to Allegiance 2900 K Street LLC for $39 million. The sale was documented in a “Bargain and Sale Deed,” which stated that Lano/Armada reserved a leasehold interest in the property. On the same day, Allegiance and Lano/Armada executed a separate “Ground Master Lease,” granting Lano/Armada a leasehold estate expiring in August 2043, with options to extend up to 117 years. The lease required rent payments starting at $1,375,000 per year, increasing annually.
D.C. court hits Commonwealth Land Title Insurance over ground lease taxes
