Nov 20, 2024 | News, Real Estate, Real Estate Trends, Statistics, Uncategorized
Natural disasters such as floods, wildfires, hurricanes, and rising temperatures are impacting decisions in the real estate market. Here’s how:
Many buyers now consider flood-risk data before making offers. Research shows that buyers viewing high-risk homes are increasingly shifting their focus to safer properties, with some even abandoning purchases due to flood-risk concerns.
Rising disaster frequency has led to increased home insurance premiums, particularly for flood and wildfire protection. This added expense can influence home affordability and appeal.
Homeowners are investing in climate-resilient upgrades, such as fireproofing, flood barriers, and durable roofing, to protect property value and safety.
Coastal and disaster-prone areas like Florida and California are seeing the most significant impact. Meanwhile, regions with fewer natural disasters, like the Midwest, remain less affected.
Governments and policymakers are encouraged to use climate data for better zoning and disaster mitigation strategies. These measures could help safeguard at-risk communities while maintaining the stability of the housing market.
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“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!”
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
Jul 9, 2024 | Uncategorized
In the world of real estate transactions, the significance of acknowledgements cannot be overstated. Whether you’re a notary, a title examiner, or a real estate professional, understanding the requirements and potential pitfalls of acknowledgements is crucial. In this blog post, we’ll delve into the Massachusetts requirements for acknowledgements, explore common pitfalls to watch out for, and discuss the implications of fraudulent deeds and mortgages.
What is an Acknowledgement?
An acknowledgement is a formal statement by the grantor that the execution of the instrument was their free act and deed. This statement is essential in verifying the voluntary nature of the signature and ensuring the validity of the document. In Massachusetts, there are statutory definitions that provide a framework for acknowledgements, emphasizing the need for satisfactory evidence of identity and voluntary signing.
Requirements for Acknowledgements In Massachusetts, the acknowledgement process involves verifying the identity of the individual signing the document through satisfactory evidence, such as a current government ID with a photo. Additionally, the signatory must confirm that their signature was voluntarily affixed for the stated purposes within the document. Notaries and real estate professionals must be familiar with these requirements to ensure compliance and validity of the documents.
Pitfalls to Watch Out For
One of the common pitfalls in acknowledgements is the omission of the name of the person who appeared in the acknowledgement clause. This seemingly minor defect can have significant implications, leading to challenges in recording the deed or mortgage and potential issues in bankruptcy cases. Additionally, defects in acknowledgements can impact the marketability of title, posing challenges for sellers and buyers alike.
Entity Authority and Fraud Risks When dealing with deeds and mortgages involving entities, it’s crucial to ensure that the acknowledgement contains the necessary language to reflect the entity’s authority. Failure to do so can result in validity issues and potential challenges in the future. Moreover, the risk of fraudulent deeds and mortgages underscores the importance of thorough verification and due diligence in the acknowledgement process.
Acknowledgements play a vital role in real estate transactions, serving as a cornerstone for validating the voluntary nature of signatures and ensuring the integrity of documents. By understanding the Massachusetts requirements for acknowledgements, being vigilant of potential pitfalls, and addressing entity authority and fraud risks, real estate professionals can navigate transactions with confidence and uphold the validity and marketability of title.
In summary, acknowledgements are not just procedural formalities but essential safeguards in the realm of real estate, warranting careful attention and adherence to statutory requirements. By staying informed and proactive, professionals can mitigate risks and uphold the integrity of real estate transactions. If you have any questions at all about this subject or any other Massachusetts Real Estate legal matter, please give one of our Attorneys a call.
Jul 9, 2024 | Uncategorized
In real estate transactions, the use of a power of attorney can be a critical tool, especially when the principal is unable to be physically present to sign documents. Understanding the nuances of power of attorney in real estate transactions is crucial for all parties involved. Here, we delve into the intricacies of power of attorney, shedding light on its types, considerations, and potential pitfalls.
Types of Power of Attorney
There are different types of power of attorney, each with its own implications. A general power of attorney grants broad authority to the agent, allowing them to act on behalf of the principal in almost all regards. On the other hand, a limited power of attorney is specific to a particular purpose or transaction, providing a narrow grant by the principal to an agent. Additionally, the durable power of attorney allows the agent to continue acting on behalf of the principal if they become disabled or incapacitated.
Key Considerations
When dealing with power of attorney in real estate transactions, specific granting clauses and signature blocks are crucial. It is essential to ensure that the power of attorney is durable to be valid for current transactions. Reviewing the entire document is also emphasized to ensure it grants sufficient authority for the intended actions.
Recording Requirements
Recording requirements for power of attorney documents are critical. The original document must be recorded at the registry of deeds where the land is located. It is noted that recording a copy is not sufficient, and the original document is essential for reliance on the power of attorney.
Common Issues and Red Flags
There are common issues to watch out for when dealing with power of attorney in real estate transactions. Self-dealing transactions and non-arms-length considerations can lead to potential title claims due to breaches of fiduciary duty by the agent. It is important to ask questions and vet the use of power of attorney to ensure its legitimacy.
By being aware of the types of power of attorney, considerations for its use, recording requirements, and common issues to watch out for, real estate professionals can navigate power of attorney transactions with confidence. Understanding the legal and ethical standards surrounding power of attorney in real estate is crucial for ensuring compliance and protecting the interests of all parties involved. If you have any questions at all about using Powers of Attorney in Massachusetts real estate transactions, please give one of our Attorneys a call.
Apr 10, 2024 | Uncategorized
By: Rhonda Duddy, Esq., Massachusetts and New Hampshire Underwriting Counsel, Stewart Title
The recently proposed NAR settlement comes after several years of litigation. The plaintiffs in the lawsuits are home sellers alleging that NAR and other organizations participated in a conspiracy to raise, fix, maintain, or stabilize real estate commissions in violation of Section 1 of the Sherman Act and corresponding state law.
In 2023 the jury awarded the plaintiffs $1.8 billion. Although NAR denies the allegations, they announced on March 15, 2024 that they wished to settle the matter rather than move forward with an appeal. Defendants Keller Williams, RE/MAX and Anywhere Real Estate settled earlier this year. The sole remaining defendant is Home Services of America.
The total monetary settlement amount that NAR has proposed is $418 million, broken down as follows:
Within 30 days following the filing of the first motion for preliminary approval of the Settlement Agreement, NAR will deposit $5 million into escrow; within 90 days following final approval of the Settlement Agreement, NAR will deposit $197 million into escrow; no later than 1 year after the initial $197 million payment, NAR will deposit $72 million in principal, and no later than 2 years after the initial $197 million NAR will deposit another $72 million in principal. No later than 3 years after the initial $197 million payment, NAR will deposit into escrow the remaining principal, along with interest on each of the installment payments. The obligation to make these installments will be evidenced by a promissory note.
The practice changes NAR has proposed to implement are primarily outlined in Paragraph 58 of the 108-page Settlement Agreement and include the following:
- Eliminate and prohibit any requirement by NAR, any Realtor® MLS, or Member Boards that listing brokers or sellers must make offers of compensation to buyer brokers or other buyer representatives and eliminate and prohibit any requirement that such offers, if made, must be blanket, unconditional, or unilateral;
- Prohibit Realtor® MLS participants, subscribers, other real estate brokers, other real estate agents, and their sellers from (a) making offers of compensation on the MLS to buyer brokers or other buyer representatives or disclosing on the MLS listing broker compensation or total broker compensation;
- Require each Realtor® MLS to eliminate all broker compensation fields on the MLS and prohibit the sharing of the offers of compensation to buyer brokers or other buyer representatives;
- Eliminate and prohibit any requirements conditioning participation or membership in a Realtor® MLS on offering or accepting offers of compensation to buyer brokers or other buyer representatives;
- Agree not to create, facilitate, or support any non-MLS mechanism for listing brokers or sellers to make offers of compensation to buyer brokers or other buyer representatives;
- Require that all Realtor® MLS participants working with a buyer enter into a written agreement (before the buyer tours any home) with the following provisions:
1. The agreement must specify and conspicuously disclose the amount or rate of compensation it will receive or how this amount will be determined;
2. The amount of compensation reflected must be objectively ascertainable and may not be open-ended; and
3. Such a Realtor® or participant may not receive compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer.
- Prohibit Realtors® and Realtor® MLS participants from representing to a client or customer that their brokerage services are free or available at no cost to their clients, unless they will receive no financial compensation from any source for those services;
- Require Realtors® and Realtor® MLS participants acting for sellers to conspicuously disclose to sellers and obtain seller approval for any payment or offer of payment that the listing broker or seller will make to another broker, agent, or other representative acting for buyers (such disclosure must be in writing, provided in advance of any payment or agreement to pay to another broker acting for buyers and specify the amount or rate of any such payment);
- Require Realtors® and Realtor® MLS participants to disclose to prospective sellers and buyers in conspicuous language that broker commissions are not set by law and are fully negotiable;
- Require that Realtors® and Realtor® MLS participants and subscribers must not filter out or restrict MLS listings communicated to their customers or clients based on the existence or level of compensation offered to the buyer broker or other buyer representative assisting the buyer;
- Rescind or modify any existing rules that are inconsistent with the practice changes reflected in the Settlement Agreement; and
- Develop educational materials that reflect and are consistent with each provision in these practice changes and eliminate educational materials, if any, that are contrary to it.The Agreement also provides that the practice changes shall not prevent offers of compensation to buyer brokers or other buyer representatives off of the multiple listing service, nor will it prevent sellers from offering buyer concessions on a Realtor® MLS (e.g., buyer closing costs) so long as such concessions are not limited to or conditioned on the retention of or payment to a cooperating broker, buyer broker, or other buyer representative.
The Settlement Agreement further states that these practice changes will terminate 7 years after the class notice date.
The Settlement Agreement is still pending the federal court’s approval. We will continue to keep you updated as more information becomes available. If the Settlement Agreement is approved, the changes will go into effect within 60 days.
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