Tax Type
Recordation Tax
Description
Supplemental Writing;Primary Obligation Exempt
Topic
Exemptions
Date Issued
04-19-1985
April 19, 1985
Dear ****
In your letter of March 5, 1985, you request a ruling as to whether recordation of an assignment of lease is exempt from recordation tax under Va. Code § 58.1-807 C. You state that you
First, I assume that the document to be recorded states that it is an assignment of a lease made as additional security for the performance of an obligation of the lessor.
Second, it appears from your brief statement that the obligation of the lessor, for which the assignment will serve as additional security, is a permanent loan deed of trust which will be recorded free of tax under Va. Code § 58.1-804 C.
§ 58.1-807 C. allows an assignment of the lessor's interest in a lease to be recorded free of tax only if tax has been paid on the prior obligation for which the assignment is additional security. Because the permanent loan deed of trust will be recorded free of tax the exemption in § 58.1-807 C. does not apply. See opinion of the Attorney General dated December 31, 1974[see } 200-500]. The language in question was added to § 58.1-807 C. by 1982 Acts, chapter 630, which was after the 1974 opinion and after a related 1977 amendment (discussed below.) Therefore, I must presume that the 1982 General Assembly was aware of the effect of requiring payment of tax on the prior obligation.
Since the 1974 opinion referred to above the General Assembly amended § 58-60, now recodified as § 58.1-809, to allow a supplemental writing to be recorded free of tax even if the prior obligation was exempted under § 58.1-804 C. (permanent loan deed of trust). 1977 Acts, ch. 153. The proposed assignment appears to come within the definition of a supplemental writing.
If the sole purpose and effect of the proposed assignment is to secure or better secure payment of the permanent loan deed of trust I am of the opinion that the assignment is exempt from recordation tax as a supplemental writing under § 58.1-809.
Dear ****
In your letter of March 5, 1985, you request a ruling as to whether recordation of an assignment of lease is exempt from recordation tax under Va. Code § 58.1-807 C. You state that you
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- ". . . represent a Shopping Center which desires to secure permanent financing for a construction loan. The permanent lender is requiring that in addition to securing the permanent lender by a deed of trust placed against the Shopping Center, the Shopping Center owner also assigns its interest in the leases to the Shopping Center tenants to provide additional Security for the Permanent lender.'
- ". . . represent a Shopping Center which desires to secure permanent financing for a construction loan. The permanent lender is requiring that in addition to securing the permanent lender by a deed of trust placed against the Shopping Center, the Shopping Center owner also assigns its interest in the leases to the Shopping Center tenants to provide additional Security for the Permanent lender.'
First, I assume that the document to be recorded states that it is an assignment of a lease made as additional security for the performance of an obligation of the lessor.
Second, it appears from your brief statement that the obligation of the lessor, for which the assignment will serve as additional security, is a permanent loan deed of trust which will be recorded free of tax under Va. Code § 58.1-804 C.
§ 58.1-807 C. allows an assignment of the lessor's interest in a lease to be recorded free of tax only if tax has been paid on the prior obligation for which the assignment is additional security. Because the permanent loan deed of trust will be recorded free of tax the exemption in § 58.1-807 C. does not apply. See opinion of the Attorney General dated December 31, 1974[see } 200-500]. The language in question was added to § 58.1-807 C. by 1982 Acts, chapter 630, which was after the 1974 opinion and after a related 1977 amendment (discussed below.) Therefore, I must presume that the 1982 General Assembly was aware of the effect of requiring payment of tax on the prior obligation.
Since the 1974 opinion referred to above the General Assembly amended § 58-60, now recodified as § 58.1-809, to allow a supplemental writing to be recorded free of tax even if the prior obligation was exempted under § 58.1-804 C. (permanent loan deed of trust). 1977 Acts, ch. 153. The proposed assignment appears to come within the definition of a supplemental writing.
If the sole purpose and effect of the proposed assignment is to secure or better secure payment of the permanent loan deed of trust I am of the opinion that the assignment is exempt from recordation tax as a supplemental writing under § 58.1-809.
Rulings of the Tax Commissioner