Oct 23, 2024 | Home Buyer Tips, Home Seller Tips, Homebuyer Tips, Homeowner Tips, Mortgage Tips, Real Estate, Real Estate Tips
What is the Homestead Act and How Does It Protect You from Creditors in Massachusetts?
The Massachusetts Homestead Act (MGL c. 188) is designed to protect the equity in your primary residence from being claimed by unsecured creditors. With the recent changes under the “Affordable Homes Act,” homeowners who have filed a *declared homestead* can now shield up to $1,000,000 of home equity from creditors. For elderly (age 62 or older) and disabled homeowners, the protection is even greater: eligible homeowners can “stack” their exemptions, safeguarding up to $2,000,000 in equity.
This protection applies to unsecured debts, meaning that creditors cannot force the sale of your home to recover these types of debts if you have filed a homestead declaration. However, it is essential to understand what this act does not cover.
What is the Elderly Homestead Exemption in Massachusetts?
The *elderly homestead exemption* allows homeowners who are age 62 or older to further protect the equity in their principal residence. By filing a homestead declaration and meeting the age requirement, elderly homeowners can “stack” their exemptions with other qualifying residents, effectively doubling the equity protection to $2,000,000. This provision also applies to disabled homeowners who meet specific disability criteria.
This expanded exemption offers significant peace of mind, ensuring that a substantial amount of home equity remains secure in the event of financial difficulties.
What is Not Protected by a Declared Homestead?
While the Massachusetts Homestead Act provides robust protections, it does not shield against all claims. The following types of debts and obligations are *not* covered by a declared homestead:
- Secured Debts: Mortgages, home equity loans, and property tax liens. If you default on your mortgage or property taxes, the lender or the government can still foreclose on your property.
- Spousal or Child Support Obligations: Court-ordered payments related to divorce or family support are not protected under the homestead declaration.
- Liens for Work Done on the Property: Mechanic’s or contractor’s liens resulting from work or improvements on the home are not exempt.
- Certain State or Federal Liens: Examples include IRS tax liens or state tax obligations that override the homestead protection.
Can a Lien Be Placed on a Homestead Property in Massachusetts?
Yes, a lien can be placed on a homestead property in certain situations. For instance, if you owe money for unpaid taxes, a creditor like the IRS or the Massachusetts Department of Revenue can place a lien on your home, even if you have filed a homestead declaration. Similarly, if a creditor wins a lawsuit against you and secures a judgment lien, they can place it on your property. However, the Homestead Act ensures that your home cannot be forcibly sold to satisfy *unsecured* judgment debts up to the protected amount.
It is important to seek legal guidance if you are concerned about potential liens or creditor claims affecting your homestead protection.
Providing title, escrow, closing and settlement services to clients throughout Massachusetts and New Hampshire
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“The Law Office of Attorney David R. Rocheford, Jr. is by far the most exceptional real estate law office that I have had the pleasure of working with. The professionalism is by far second to none.”
SENIOR LOAN OFFICER, SALEM FIVE MORTGAGE SERVICES
“Attorney David Rocheford has provided settlement and title services for me and Greenpark Mortgage several years. He has assisted all of my clients, including my family and friends with mortgage closings. Always providing excellent service. Reliable and trustworthy!”
Oct 8, 2024 | Home Buyer Tips, Real Estate
As a new homeowner in Massachusetts, safeguarding your property against fraud is paramount. The Massachusetts Registries of Deeds has your back with their innovative Owner Alert Service – a free, user-friendly tool designed to keep you informed and your property secure.
Your Property, Your Peace of Mind
Imagine waking up one day to find that someone has fraudulently recorded a document against your property. It’s a nightmare scenario that, unfortunately, can happen. But what if you could be instantly notified of any recording activity related to your property? That’s exactly what the Owner Alert Service offers.
What is the Owner Alert Service?
The Owner Alert Service is a free notification system available to property owners in Massachusetts. When you subscribe, you’ll receive an email alert whenever a document is recorded against your property in the Registry of Deeds. This real-time notification system serves as your first line of defense against potential property fraud.
Benefits That Speak Volumes
- Instant Notifications: Stay informed about any activity related to your property in real-time.
- Fraud Prevention: Quickly identify and address any suspicious or unauthorized recordings.
- Peace of Mind: Rest easy knowing you have an extra layer of protection for your valuable asset.
- Cost-Free: Enjoy this invaluable service at absolutely no cost to you.
- User-Friendly: Easy to set up and manage, even for those who aren’t tech-savvy.
How to Sign Up: Your Step-by-Step Guide
- Visit the https://cns.masslandrecords.com/WelcomeUser.aspx.
- Click on the “Create New Account” button.
- Complete the initial registration form.
- Check your email for your password and follow the instructions provided.
- Log in using your email address and password.
- Input up to two names (individual or business) and the corresponding city or town for monitoring.
That’s it! You’re now protected by the Owner Alert Service.
Real Estate Professionals:
For real estate professionals, the Owner Alert Service is more than just a tool – it’s a value-added service you can offer your clients. Imagine being able to tell your clients, “I’ve got your back even after the sale is complete.” It’s a powerful way to build trust and long-term relationships.
Protect Your Property
Don’t wait for a problem to occur. Take proactive steps to secure your property today!
Sign Up Now
Remember, in the world of real estate, knowledge is power. The Owner Alert Service empowers you with timely information about your property, allowing you to act swiftly if any unauthorized changes occur. It’s not just a service; it’s your property’s first line of defense.
By leveraging this free tool, you’re not just protecting your property – you’re securing your peace of mind. So why wait? Sign up for the Owner Alert Service today and take control of your property’s security!
Aug 19, 2024 | Home Selling Tips
Selling a house in the current market can be tricky, but there are certain mistakes an owner can make that will cause a Worcester County area home to sit still without a decent offer and cause the listing to go stale.
In order to prevent that from happening, make sure you are not making one of the following mistakes when putting your property on the market.
Overpricing
While your home may hold sentimental value, many times that value does not translate into dollars.
Be realistic about your asking price and know the details about your current market.
Look at the list price of similar houses on the market to get a rough idea of what you should ask for your property.
Make special note of the actual closing sales price as well as the time on market and listing to sales price ratio.
A licensed real estate agent can provide these details as well as give you their expert opinion based on experience and comparable properties.
Neglecting Repairs
Glaring problems with a property will cause the buyer to think the home was not properly maintained.
While it may cost some money, repairing things like holes in the walls, broken light fixtures or missing tiles can change a buyer’s entire attitude about a property.
Ask for help if you aren’t comfortable doing these things yourself.
A real estate professional will have a whole list of qualified referrals who they trust to help you get things fixed up.
Ignoring Curb Appeal
Overgrown and unweeded yards can cause potential buyers to drive right by.
Also, having junk in the front of your house or peeling paint can deter someone from considering the property.
Step across the street and take an honest look at your house – and then make necessary adjustments.
Fixing these items may be as easy as one weekend day of clean up and a little elbow grease.
And even though it’s not expensive to fix these issues, it can make thousands of dollars difference in the sale of your home.
Creating Or Allowing Foul Odors
Odorous foods, pet dander and the smell of smoke can be extremely distasteful to buyers.
Even if you are used to the smell, others entering your house will not be.
Make sure you air out the house, smoke only outdoors, and put away the litter boxes before an open house or showing.
Also, ask someone who isn’t at your home often to come in and give it a smell test.
Brutal honesty here might hurt a little bit, but it’s a lot better than allowing this problem to prevent a quicker sale of your home.
Without even realizing they’re sabotaging a potential sale, homeowners can make several mistakes when first trying to sell their home.
To find out what you can do to make your property really stand out to potential buyers, contact me, I can introduce to some of the finest Real Estate Professionals in our area. 978-728-5104
Aug 16, 2024 | Uncategorized
By Attorney Christopher Carreira
In Massachusetts, a title examination involves searching at least 50 years of records related to a property at the Registry of Deeds, the Equity Court, the Bankruptcy Court, and even the Probate and Family Court. The purpose of this examination is to ensure that the new homeowner does not face any legal issues in the future with the documents that are publicly available to the law firm closing the transaction. An attorney typically reviews the examination for accuracy.
Title Issues
It is difficult to find someone who has not encountered a title issue at some point. These issues could include a missing mortgage discharge, a deed with typographical errors in the legal description, or a grantor clause with an incorrect name spelling. Fortunately, the Real Estate Bar Association of Massachusetts has a handbook of standards and forms to guide us in resolving these issues. This handbook contains over 200 pages of information on various title issues.
Title Insurance Companies
However, not every problem has a clear solution. It is often necessary for a title insurance company to approve a fix before any action can be taken. Title insurance companies are frequently involved when a buyer is obtaining a mortgage or when a new homeowner wants to insure the title to the property. If a problem is discovered later, lawyers may be needed to resolve the issue in court. Each title insurance company has a team of lawyers to answer questions and litigate title issues, but these lawyers do not always agree with each other.
An Example
A homeowner had two mortgages on her property. She lost her job due to illness, fell behind on her mortgage payments, and had to rely on credit cards. Six months later, she was able to return to work but needed to file a Chapter 13 bankruptcy case to eliminate her credit card debt and catch up on her mortgage payments. As part of the case, she was able to eliminate her second mortgage because the property was worth less than the amount owed on her first mortgage at the time of the bankruptcy filing.
As she got older, she decided to sell her property and downsize to a condominium. She signed a Purchase and Sales Agreement and was two weeks away from closing when the buyer’s lender’s closing attorney advised that the second mortgage needed to be paid off. She explained that the bankruptcy court had eliminated it, so it did not need to be paid off. The closing attorney called his title insurance company, which insisted that a discharge of the mortgage was necessary for marketable title. Despite numerous letters from the closing attorney, the mortgage company refused to discharge the mortgage, delaying the closing date.
The Solution
Frustrated, the homeowner called another attorney, who advised that the mortgage did not need to be discharged and that a copy of the Bankruptcy Court’s order could be recorded at the Registry of Deeds to resolve the issue. The homeowner was puzzled as to why the original attorney had not thought of this solution. Unfortunately, the original closing attorney was only able to work with one title insurance company, which was very conservative and did not allow the court order to clear the title issue. Fortunately, the homeowner suggested the buyer switch attorneys to complete the closing. The new closing attorney worked with three title insurance companies, two of which agreed with the proposed solution of recording the Bankruptcy Court order.
The Cost
After months of wasted time and extra money spent on mortgage payments and bills, the new buyer was finally able to move into the property. However, they had to accept a higher interest rate and payment than originally qualified for because the new closing attorney closed the transaction with one of their three title insurance companies. This situation highlights the importance of having options.
Aug 16, 2024 | Uncategorized
A brief summary By: Mark Jones, Esq., Associate Senior Underwriting Counsel Stewart Title Company
A common question that comes up in underwriting title insurance is how do we take title from the estate of a deceased person? There are typically three main ways that we can accept a title from an estate: (1) by License to Sell issued by the Probate Court; (2) by Power of Sale under an allowed Will; or (3) by a deed from the heirs at law or devisees in a Will. It is important to remember, however, that depending on which method is used to pass title, other claims or liens which impact title may need to be addressed in order for a policy to issue without exception.
Decree of Sale of Real Estate by Personal Representative (License to Sell)
There are a couple variations in the types of Licenses to Sell, but the end result for each is that the estate sells free and clear of any liens that would otherwise attach to the estate. Instead, those liens would attach to the proceeds of the sale. These liens include the automatic lien for administrative expenses, any creditor’s claims filed in the probate court (creditors have one year after death to assert claims), and any MassHealth liens filed with the probate court. Keep in mind, any liens that encumbered the real estate prior to death, such as a mortgage, still require a discharge. Also, a license does not eliminate the need to deal with Federal and Massachusetts Estate Taxes. Releases of estate taxes from both the IRS and DOR or an appropriate affidavit must be obtained and recorded at the Registry of Deeds.
The typical license we see is a general license to sell by the Personal Representative (“PR”) in the estate. A PR would file with the court a Petition for the Sale of Real Estate in order to receive permission to sell. This is a license under G.L. c. 202, section 19 and the court will only allow the petition if it is filed within one year of the allowance of the PR’s bond. The license must be used within one year of issuance. The terms of the license must be scrupulously followed. Most importantly, the sale price must be for the same amount or more than set forth in the license. My personal preference, and the best practice, is to have the license recorded along with the deed to make life easier on future title examiners but it is sufficient that the decree is only docketed in the probate case.
Power of Sale in a Will
Taking a deed under Power of Sale in a Will is similar to a deed under a License to Sell in that any liens against the estate would attach to the proceeds of the sale. Again, releases of estate tax liens or estate tax affidavits must be recorded at the Registry of Deeds. In order to take a deed from a PR, the Will must contain a Power of Sale, the Will must be allowed by the court, and the PR must be appointed by the court. The Power of Sale must be closely reviewed to confirm that the power to sell includes real estate and that there are no other conditions tied to the PR’s power to sell. A PR is a fiduciary and therefore is bound by both statutory and common law fiduciary duties. For this reason, a deed from a PR that is for nominal consideration is problematic and may not be insurable. It is important to remember that a PR’s ability to sell under Power of Sale in a Will is not limited to time and not only cuts off claims of creditors but also all claims of legatees and devisees. The PR’s powers, however, are not indefinite. Specifically, if an Order of Complete Settlement is issued or the PR files a closing statement, the Personal Representative no longer has the ability to sell the real estate.
Deed from Devisees in a Will or Heirs at Law
Unlike deeds under Licenses to Sell and Power of Sale in a Will, any claims or liens filed in the probate court against the estate will have to be released or satisfied before we can insure a title given by devisees in a Will or heirs at law. One of the first and critical steps in determining whether title can be insured by such a deed, is establishing the identity of the devisees or heirs at law. Prior to the adoption of the MUPC, it wasn’t always easy to identify the devisees of a decedent if the will broadly identified individuals by group, rather than by name; however, with the adoption of the MUPC, the forms that are filed as part of a petition provide detailed information on devisees. In situations where a decedent died testate, and the devisees are clearly established in the probate filing, the devisees can convey the real estate; however, that conveyance is subject to divestment by the PR if the PR seeks to sell the property in order to completely administer the estate. Property conveyed by devisees is also subject to claims for the administration of the estate for a period of six years after the approval of the PR’s bond. To insure the title, we would generally require that the probate be closed with an order of complete settlement. This eliminates the potential for divesture by a PR and eliminates the potential for claims arising out of the administration of the estate.
If the decedent died intestate, unless the probate petition is filed as a formal proceeding, there is no determination of heirs and one cannot immediately rely on the filed forms to establish the heirs at law from a title perspective. For this reason, deeds from heirs in an informal proceeding may not be immediately insurable. If an informal probate has been filed for a decedent that died intestate and a PR has been appointed, it will generally be necessary for the PR to file a petition for an order of complete settlement that includes a specific request to determine the heirs. Once allowed, title conveyed from the heirs will be insurable.
As you can see, taking title from devisees or heirs at law can be far more complicated than taking title from a PR who has obtained a license or has been permitted to sell by the terms of the Will. Should you have questions on how to transfer title so that it is insurable when there is a probate involved, don’t hesitate to reach out to any member of our underwriting team. We will work with you to determine the best and easiest path to insurability.
The probate court provides links to many of the probate related forms, along with instructions for completion. To view, follow this link: https://www.mass.gov/lists/probate-and-family-court-forms-for-wills-estates-and-trusts
