As you may have heard, in response to the letter issued by the Vermont Department of Taxes on March 21, 2016, the Subordination Agreement form concerning Current Use liens has been modified. A copy of the both the letter and the new Agreement may be downloaded.
You will notice two changes to the new Agreement. First, it clarifies the State’s position that although the lien is subordinate to the mortgage, the lien is not extinguished in a foreclosure.
Second, the State has added a time of financing certification that there is no assessment (tax) due and owing on the property.
Effective immediately, lender and/or owner title insurance can be issued for property enrolled in the Current Use Program if:
1. A signed Subordination Agreement in the form attached is obtained and recorded in the land records; and
2. All title insurance commitments and final policies contain the following Schedule B, Exception (NB: inserted into the Addendum Page of a Short Form Loan Policy);
Land use change tax, if any, pursuant to enrollment of the Property in Vermont’s land use appraisal program (32 VSA Chapter 124), as evidenced by instrument recorded [date] in Book ___, Page ___ of the land records provided, however, that this policy affirmatively insures that at Date of Policy no land use change tax has been assessed or remains unpaid and subsequent assessments, if any, are not yet due and payable.
3. Note: the foregoing language does NOT get inserted into Schedule B, Part II (Matters that are Subordinate) of the final loan policy. It goes in Schedule B, Part I, Exceptions of the final policy.
If you have any questions, please contact the VATC office @ 800.876.6800 and speak with Andy Mikell.