Sec. 05.10.06.01. Due Diligence

A. Settlement agents conducting real estate settlements involving the sale of residential rental projects, or the release of federally-assisted mortgages or related documents encumbering the projects, shall make inquiries of the owner as to the nature of the project, and the possible termination of federal assistance which may be governed by the Act and these regulations.

B. If responses to the agent’s inquiries, the nature of the transaction and related documents, or any information otherwise known to the settlement agent raises a reasonable possibility that a sworn statement under §7-307 of the Act is required, the settlement agent shall use its best efforts to procure and file a sworn statement with the Department, and if unable to comply, shall notify the Department in writing before the settlement of the circumstances of the failure to deliver the sworn statement.

C. Settlement agents failing to comply with this regulation may be subject to civil liability and civil monetary penalties in accordance with the Act.