Paying off a mortgage is cause for celebration but many Virgin Islands property owners are dismayed to find — sometimes 50 or 60 years later — their liens remain, officials said Monday.
Currently, property liens remain in place unless documents proving the mortgage is paid off are filed with the Recorder of Deeds offices. It’s a small but necessary step. It not only gives the property owners full rights to the land but allows them to easily sell their parcel. If the Recorder of Deeds doesn’t have documentation that the mortgage was satisfied, it remains on the books even if there is a zero balance, staff from the Lieutenant Governor’s Office told the Senate Committee on Budget, Appropriations and Finance.
While most modern property owners don’t have to worry about this as procedures have been generally normalized, older loan agreements may not have mortgage-completion documents filed, said Cleopatria Portia Pierre, director of the St. Croix District Recorder of Deeds Office.
Banks and other mortgage lenders go out of business or leave the territory, private lending agreements between the buyer and seller may have taken place, or property owners simply may not have realized their completed mortgage needed to be filed. Then, when they go to sell, banks and title companies see the red flag of an open lien.
“This bill establishes a time limit for certain mortgages and other security interests to expire due to the passage of time, thus releasing property that would otherwise be considered encumbered,” Pierre said. “I have seen a lot of cases over time and this does affect the ability to sell properties.”
The bill, sponsored by Marise James, herself a real estate lawyer, would automatically record paid-off mortgages after five years.
Erica Dover, director of the St. Thomas and St. John Recorder of Deeds, said she’s seen “quite a few” properties with this problem stretching back to the 1960s, if not earlier.
“The liens are not dead because they have not been registered with the recorder’s office,” Dover said.
Committee Chair Sen. Donna Frett-Gregory suggested an amendment requiring the Lieutenant Governor’s Office to send out materials educating property owners on the need to file notice of completed mortgages. Another potential amendment would change the time frame from five years to seven, falling in line with the Fair Credit Reporting Act.
The committee unanimously approved the measure and sent it to the Rules and Judiciary Committee for further consideration.
Two other bills tried to address litter around the Virgin Islands.
One bill, sending $2.5 million to the Waste Management Authority, didn’t make it out of committee after Office of Management and Budget Director Jenifer O’Neal expressed concerns it would spend money already directed elsewhere.
“When we talk about what’s important, this is not it,” O’Neal said, confessing she was listening to a meeting pleading for hospital funds while testifying.
Frett-Gregory was bemused but said she understood.
Another bill sought to give businesses tax credits to offset money spent on approved beautification efforts.
While officials from the Internal Revenue Bureau and Public Works Department took issue with some of the proposed law’s nuance, such as what was litter removal and what was beautification, such as adding plants or structures that might require continual upkeep, other testifiers gave full-throated support to the idea.
Jody Olson, a community cleanup organizer, praised the volunteers who donated their time but said cleanups could only address litter after the fact. If businesses were able to hire crews, those people who might not otherwise be involved in litter patrols would come away with a greater understanding of the problem and be less likely to litter themselves.
“We have to reach people who are part of the problem,” Olson said.
