HOUSE BILL NO. 549
AS AMENDED BY HOUSE AMENDMENT NO. 1
AN ACT TO AMEND CHAPTER 54, TITLE 30, AND CHAPTER 1, TITLE 25, OF THE DELAWARE CODE RELATING TO THE REALTY TRANSFER TAX, PROVIDING FOR SUCH TAX ON CERTAIN LEASES AND DOCUMENTS PERTAINING TO OTHER LIMITED INTERESTS IN REAL ESTATE, AND PERTAINING TO THE RECORDING AND ENFORCEABILITY OF THOSE LEASES AND DOCUMENTS.
Be it enacted by the General Assembly of the State of Delaware:
Section 1. Amend Section 5401 (a) (2), Chapter 54, Title 30, Delaware Code, by striking said subsection (2) in its entirety, and substituting in lieu thereof the following:
"(2) any lease other than those described or defined in subsection (d) below;".
Section 2. Amend Section 5401 (c), Chapter 54, Title 30, Delaware Code, by striking the words "or interest" as the same appear in the second line of said subsection (c), and substituting in lieu thereof the following:
"or interest or leasehold interest".
Section 3. Amend Section 5401 (c), Chapter 54, Title 30, Delaware Code, by striking the phrase "contract of sale," as the same appears in the 10th line of said subsection (c), and inserting in lieu thereof the following:
"contract of sale or lease,".
Section 4. Amend Section 5401, Chapter 54, Title 30, Delaware Code, by adding thereto new subsections (d), (e) and (f) to read as follows :
"(d) The term 'document' defined in subsection (a) above shall include the following:
(1) any writing purporting to transfer a title interest or possessory interest for a term of more than 5 years in a condominium unit or any unit properties subject to the Unit Property Act;
(2) any writing purporting to transfer a title interest or possessory interest under a lease for a term of more than 5 years ;
(3) any writing purporting to transfer a title interest or possessory interest of any lessee or other person in possession of real estate owned by the State or other political subdivision thereof ;
(0) the exercise of any right or option to renew or extend a title or possessory interest in an existing lease where such extension or renewal is for a term of more than five years.
(e) In determining the term of a lease under subsection (d) above, it shall be presumed for the purpose of computing the lease term that any rights or options to renew or extend will be exercised.
(f) For purposes of subsection (c), in the case of a document described in subsection (d) under which the consideration is based in whole or in part on a percentage of the income or receipts to be received in the future. actual consideration shall include the amounts actually received under such percentage of income or receipts provision ; provided, however, and notwithstanding any other provisions of this chapter, the tax imposed by this chapter shall be due and payable to the Division of Revenue within 30 days after the date such amounts become due and payable under the agreement."
Section 5. Amend Section 5402, Chapter 54, Title 30, Delaware Code, by adding thereto new subsections (d) and (e) to read as follows:
"(d) Every person who makes, executes, delivers, accepts or presents for recording any document defined or described in Section 5401 (d) of this chapter, or in whose behalf any such document is made, executed, delivered, accepted or presented for recording, shall be subject to pay for and in respect to the transaction or any part thereof, a realty transfer tax at the rate of 2 percent of the value of the property represented by such document, which tax shall be payable as follows:
(1) The tax on the consideration attributed to the first year of the term shall be payable at the time of making, execution, delivery, acceptance or presenting of such document for recording;
(2) The tax on the consideration attributed to each successive year of the term thereafter shall be paid annually to the Division of Revenue.
(e) There shall be no tax imposed on any document described in Section 5401 (d) entered into prior to the effective date of this Act."
Section 6. Amend Chapter 1 of Title 25, Delaware Code, by adding thereto a new Section 154 to read as follows:
§ 154. Enforceability of certain leases and documents pertaining to lands and tenements
Failure to record, within 15 days of the date of execution of the documents defined or described in Section 5401 (d) of Title 30, Delaware Code, in the office of the Recorder of Deeds in the county in which the lands or tenements or any part thereof are located shall make those documents unenforceable in any court of this State.
Section 7. Amend Section 5402 (a) of Chapter 54, Title 30, Delaware Code, by adding after the phrase "recording any document" and before the comma the phrase "except as defined or described in Section 5401 (d) of this Chapter".
Section 9. If any provision of this Act or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect any other section, subsection, sentence, clause or provision of this Act which can be given effect without the invalid provision or application, and to that end each provision of this Act is declared to be severable.
Section 10. The effective date of this Act shall be the day after signature by the Governor.
Approved July 6, 1973.