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Stigmatized Property Disclosure Laws: A Close Look at Massachusetts

In the complex world of real estate, one of the most debated topics is the necessity of property disclosure from sellers to prospective buyers. This debate becomes even more intriguing when we delve into the specifics of what is perceived as ‘material facts’—information that could potentially influence a buyer’s decision to purchase a property. These facts can range from structural issues, pest infestations, to a property’s less tangible history, such as deaths or crimes that occurred on the premises.

While property disclosure laws vary by state, we will focus on Massachusetts and the particularities of its legislation—specifically focusing on the disclosure of deaths (natural or otherwise) and crimes on the property.

Understanding Massachusetts Law Chapter 93, Section 114

According to Massachusetts law, particularly Chapter 93, Section 114, sellers are not legally obligated to inform potential buyers if the property in question is “psychologically impacted.” More explicitly, this means if a property was the site of a felony, suicide, or homicide, or that the real property has been the site of an alleged parapsychological or supernatural phenomenon, the seller is not required to disclose this information.

However, it’s essential to differentiate between ‘mandatory disclosure’ and ‘honesty in disclosure.’ While the law doesn’t require sellers to proactively reveal this information, they are obligated to provide truthful responses if buyers directly question them about the property’s history. Misleading a buyer or outright lying in response to direct inquiries can potentially lead to legal repercussions.

Understanding the Rationale and its Implications

The rationale behind this law is to protect sellers from the societal stigmas attached to properties where untoward incidents occurred. In many cultures and societies, properties with a history of death or crime are considered ‘stigmatized’ or ‘tainted,’ and this perception can significantly affect their market value.

However, this law also implies a greater responsibility on the buyers. Potential home buyers in Massachusetts should be aware of this law and take it upon themselves to ask detailed and comprehensive questions about the property’s history.

The Importance of Honesty in Real Estate Transactions

Despite the specifics of the law, the principle of honesty remains a fundamental cornerstone of any real estate transaction. While sellers are not legally bound to disclose certain information, maintaining transparency can foster trust and pave the way for smoother transactions.

Moreover, sellers should consider the ethical implications of withholding such information. While the law might not require them to disclose, the moral question of whether or not to share such details remains a personal decision.

Conclusion

Navigating the intricacies of property disclosure laws can be challenging, but understanding the local laws is crucial for both sellers and buyers. For sellers, it’s about striking a balance between their legal rights and ethical responsibilities. For buyers, it’s about asking the right questions and ensuring they are fully aware of what they are investing in. Regardless of the legal nuances, honesty and transparency should always be the guiding principles in real estate transactions.

Probate and Real Property Transfers

When you’re grieving the loss of a loved one, the last thing you want to do is sort through the complex details of their assets – especially real property. But knowing more about what happens to real property after death can help avoid unwarranted surprises. There are many factors that play a role in how real property is transferred, like whether or not the deceased person had a will, or if the property is part of a trust or co-owned with others. In some instances, a probate proceeding may be required to ensure an orderly transfer of the decedent’s assets – including real property. Let’s explore when and how the title to real property is transferred during a probate proceeding.

What is probate?

Probate is the formal legal process of ensuring the validity of a person’s will, reviewing their assets and finalizing the executor of the estate, or the person responsible for distributing assets to beneficiaries and heirs as described in the will. Typically, this person is a close remaining relative. If the deceased individual (or decedent) did not have a will, the death is considered what is referred to as intestate. In this circumstance, the court uses state-specific probate and intestate succession laws to make fair and just determinations about the assets and assigns an administrator or personal representative to administer the estate.

How does probate work?

Although the probate process varies by state, there are some routine steps in every jurisdiction. Below is a simplified version of each:

1. File a petition. A petition for probate must be filed with the court in the jurisdiction where the decedent lived at the time of death by the individual who intends to act on behalf of the decedent. Once filed, the court will schedule a hearing to appoint the executor or name an administrator.

2. Give notice. Notice must be given to all parties who may hold an interest in the decedent’s estate, such as heirs and beneficiaries named in the will. The executor or administrator holds the responsibility of giving notice, which must be sent by mail or process service. Notice must also be provided to potential creditors. This is usually accomplished by publication in a newspaper with a wide circulation and must be published for several days or weeks, depending on state requirements.

3. Inventory and appraisal of all assets. Once the probate case has been opened, the next step is to determine the list of the decedent’s assets and respective value, then present them to the court. This is particularly important when it comes to real property, which will need to be appraised before it is put on the market, if a sale of the property is required.

4. Transfer remaining assets and close the estate. Once all claims, debts and expenses are paid; real property has been legally transferred to appropriate heirs or sold; and funds disbursed to beneficiaries, all records and receipts are submitted to the court with a petition to close probate. Once the court examines the records, and if there are no objections, then an order to close the estate will be filed by the court.

What happens when real property is sold through probate?

The executor or administrator of the estate is generally tasked with administering the sale of real property. The court controls the process of the sale, including how the property is marketed, which offer is accepted and negotiations that are made. There are some unique nuances to probate sales, which may include, but are not limited to, the following:

  • Real property is often sold at a price relatively lower than average, with minimum overbid requirements in some states.
  • The buyer may be asked to remit a deposit (10 percent of the sale price) when making an offer.
  • Property is generally sold “as-is.”
  • The closing process can take longer than a traditional sale.

Once the court approves the sale and a buyer has submitted an offer and deposit, the closing process can begin. In order to facilitate the closing, the Escrow Officer or Closing Agent may request copies of documents filed in probate court, which can include, but are not limited to: A Letter of Testamentary that confirms the individual has been granted authority to conduct matters on behalf of the estate; a certified copy of the death certificate recorded in the county where the decedent lived; and a copy of a filed disclaimer of interest from any beneficiary who rejects their rights to the property.

Is probate always required to transfer real property after death?

No, not all real property is subject to probate. There are certain circumstances where probate can be avoided when transferring real property after death, such as if title to the decedent’s real property was held in a trust; if it was jointly owned with a co-owner who had rights of survivorship; or if the property was shared with a spouse or domestic partner in a community property state, regardless if the spouse or domestic partner was on title.

How long does it take to transfer real property in probate?

A probate case should take less than a year but can extend to several years if there are unforeseen circumstances, such as a challenge to the validity of the will, a complicated list of assets, or an inability to locate beneficiaries. Also, when dealing with real property, title issues such as improper recordings after a divorce or an incorrect legal description in the court order can cause further delays.

Probate proceedings can be complex. Taking the time to discuss the process with an attorney and to understand the steps and court requirements can help provide insight and lessen overwhelming feelings about the process. At Old Republic Title, we’ll work with you to make sure your property rights are protected for years to come. For more helpful resources about title insurance and settlement services, contact an Old Republic Title representative today.

Copyright Old Title – Reprinted from https://www.oldrepublictitle.com/blog/probate-and-real-property-transfers/

This material is for educational purposes only and does not constitute legal advice. Old Republic Title strongly recommends that consumers obtain guidance and advice from qualified professionals, including attorneys specializing in real property law, probate law, or tax law to get more detailed and current information as to their particular situation.

Four Takeaways from NAR’s New Generational Trends Report

The National Association of REALTORS® (NAR) recently released its latest report on Home Buyers and Sellers Generational Trends for 2023, reviewing market trends for 2022. Check out our summary of four major takeaways from this year’s report and what they mean for the real estate industry:

1. Baby Boomers overtook Millennials as the largest demographic of home buyers, making up 39 percent of the market in 2022, compared to 29 percent in 2021. They also remained the largest demographic of home sellers, jumping from 42 percent in 2021 to 52 percent in 2022.

One reason for this rise is, as NAR deputy chief economist Dr. Jessica Lautz explains, “Baby Boomers have the upper hand in the homebuying market. The majority of them are repeat buyers who have housing equity to propel them into their dream home…[and] they are living healthier and longer and making housing trades later in life.” Younger Boomers (ages 58-67 in 2022) may be seeking larger multigenerational homes or are choosing to move closer to family and friends, while Older Boomers (ages 68-76) may be seeking less property maintenance responsibility as they enter retirement.

2. First-time buyers made up only 26 percent of all home buyersa sharp decrease from 34 percent last year, and the lowest number since NAR began tracking data in 2013. Seventy percent of Younger Millennials (ages 24-32) and 46 percent of Older Millennials (ages 33-42) were first-time home buyers. Behind these groups, 21 percent of Gen Xers (ages 43-57) were also first-time home buyers.

3. When relocating, all generations are moving farther distances, with Millennials typically moving the shortest distance of just 15 miles and Younger Boomers moving the furthest of 90 miles. The most common reason for such a move is to be closer to family and friends.

4. Gen Z (ages 18-23) now makes up 4 percent of buyers, an increase from 2 percent in 2021. Thirty percent of Gen Z buyers are moving directly from a family member’s home into their own first home and many are relying on family support systems to make the purchase. Gen Z also surprisingly expects to reside in their first home for 19 years, a much-longer stint than previous generations. As the most internet-savvy and climate-conscious generation, Gen Z buyers have likely done their research and are seeking a home that will sustain them for as long as possible. One thing is for sure: this generation is no longer “statistically irrelevant” and is gaining traction in the market.

Industry professionals can continue to cater to each generation by using data to create a good first impression, understanding and honoring customer preferences, and offering care and respect to the values and needs of each. For example, Baby Boomers will appreciate careful assistance with paperwork and inspections, touring areas that offer criteria that they value (e.g., affordability, lower tax rates, ample access to health care, moderate climates and low crime rates) and personalized touches, such as a hand-written thank-you note upon closing. For more ideas, check out our flyer on understanding generational trends.

There’s a reason countless Americans have relied on Old Republic Title for over a century. Through changing markets and generational trends, we continue to offer personalized service and a variety of title insurance resources designed to help our customers protect one of their biggest investments. Whenever you’re ready to buy or sell your home, Old Republic Title will be there to help.

 

Copyright ©2023 “Home Buyers and Sellers Generational Trends Report 2023.” NATIONAL ASSOCIATION OF REALTORS®. All rights reserved. Reprinted without permission. July, 2023. https://cdn.nar.realtor//sites/default/files/documents/2023-home-buyers-and-sellers-generational-trends-report-03-28-2023.pdf

Selling with a Solar Agreement – 10 Tips for Guiding Your Clients

The solar industry is booming. There are currently more than 1.5 million residential solar installations in the U.S. and that number is projected to reach nearly 4.2 million by 2024. Solar panels have become such a popular energy solution that in May 2018, California regulators approved a plan to mandate solar panels on all new home construction. Soon, this type of legislation could come to other sunny states to reduce environmental footprints.

One way builders and homeowners are looking to install solar systems is through a lease or power purchase agreement (PPA) (i.e., a “solar agreement”) with a third-party solar provider. These solar agreements are currently available in a little over half of all U.S. states, and provide homeowners with a way to use solar panels without the upfront cost of purchasing a system. But solar agreements are known to create unique challenges when selling a home.

Some issues that sellers have experienced so far include:

  • Buyers shying away from a house because of the solar agreement (due to things like lease length, lease payment, lease contracts, maintenance considerations, technology obsolescence and more)
  • Buyers who may not meet the solar company’s qualifications to lease
  • Potential issues involving the proper transfer of the solar agreement

If you’re working with a seller who currently owns a home with a solar agreement, you may be able to help them navigate complications with the sale. While every situation is different, here are a few steps to consider:

  1. Start early: If you represent the seller, ask them early in the selling process whether the property is tied to a solar agreement. The terms for transferring a solar agreement may impact the marketability of a property, and disclosure to potential buyers is important.
  2. Request a copy of the solar lease agreement: Ask your client for a copy of the current solar agreement. If they don’t have a copy, they should request it from their solar company.
  1. Seek advice. Unfortunately, misconceptions about solar agreements are common. It’s important that buyers and sellers fully understand the terms of their solar agreement, including its transfer rights and requirements at the time of the sale of the home. Many solar companies have dedicated representatives to assist with the lease transfer process, but you may wish to advise your clients to consult with an attorney first.
  1. Cover all your bases: When selling a home subject to a solar agreement, it helps to work with a trusted company like Old Republic Title. We can alert you to potential title problems, such as an unrecorded solar easement and other possible title issues that need to be addressed prior to closing.
  2. Keep lines of communication open: Early in the process, provide your closing team with as much information as possible about the transaction. What they don’t know could cause delays to the closing process.
  3. Highlight the Value of Solar Power: Homeowners should be encouraged to emphasize the financial and environmental benefits of owning a solar power system. These advantages include substantial savings on utility bills and a reduced carbon footprint, which can be attractive selling points for potential buyers.
  4. Get an Appraisal: A fresh appraisal of the home that takes the solar panels into account can add significant value to the property. An experienced real estate agent or appraiser can assist in this process to ensure an accurate valuation.
  5. Prepare Necessary Documentation: Homeowners should be encouraged to gather all documents related to the solar system, including warranties, service agreements, and details about the system’s ownership. This information can be helpful to potential buyers and increase their confidence in the purchase.
  6. Feature the Solar System in the Listing: The solar system should be prominently mentioned in the home’s listing. Homes with solar panels can sell for more than homes without, so it’s important to highlight this unique feature to attract potential buyers.
  7. Clarify Financing Details: If the solar system was financed, homeowners should be aware of the requirements and liabilities associated with this. An experienced agent can help explain these details to potential buyers, ensuring a smooth and transparent transaction.

If you would like to learn more about how you can guide the sale of a home subject to a solar agreement, or find out what information your closing team might need, contact your Old Republic Title representative today.

Execution of Documents in a Foreign Country

When sellers or buyers meet with the closing agent/attorney to sign their closing documents, it is easy to take for granted the formalities that are required for properly executing a deed or mortgage and other closing documents. Even if the signer is in another state, usually they have access to a notary public at their bank or a local business, and with careful instruction from the closing agent to the notary, the requirements are easy for the signer to complete. However, early and careful planning is needed to ensure the required services and facilities are available so that closing will not be delayed when the signer is in a foreign country.

All the same formalities which are required in a particular state are required when documents are executed out of the country.  For example, for documents to be validly recorded with the land evidence records in the State of Connecticut, the documents must be in writing, properly acknowledged, and attested by two (2) witnesses. Please be sure to confirm the requirements of your particular State when sending documents to be executed in a Foreign Country.  A proper acknowledgment can generally not be achieved by simply executing the documents before a foreign notary.  To obtain a proper acknowledgment of a document, it is best to execute the document at the American Embassy located in the country in which the signer is located.  The notaries at the American Embassy are not considered “foreign”.  This requires early planning, as the embassies and consulates generally require an appointment for this service, and often are booked several weeks out. Therefore, your client should  contact the Embassy well in advance to schedule the notarial service. No seal or further authentication is required if executed at the Embassy.

It is also possible to have a document notarized by a local foreign notary, but an additional step is required.  Specifically, the notarization must be authenticated for use in the United States.  In countries that are party to the Hague Apostille Convention, this is a simplified process that does not involve Embassies or Consulates. In times past, figuring out the various unique legal requirements of multiple nations was difficult. The confusion not only slowed down the processing times, but also led to widespread fraud that was hard to detect. In response, Apostille laws were agreed upon by a large number of countries and signed at a Hague convention in 1961. See the Hague Conference website for complete information on the Apostille process. Apostilles authenticate the seals and signatures on public documents.

If your document is acknowledged by a person authorized to perform notarial acts by the laws or regulations of a foreign country, such as a Notary Public, Judge, Clerk or Deputy Clerk of any court of record, then such acknowledgment must contain the official seal of the person performing the notarial act.

Notwithstanding the foregoing, your State may have certain statutory provisions and Standards of Title sections that sanction and authorize the notarial act. Pursuant to the Connecticut General Statutes, Uniform Recognition of Acknowledgment Act, Section 1-57 et seq., if the notarial act is performed by a person authorized by the laws or regulations of a foreign country to perform the act, there is sufficient proof of the authority of that person to act if the official seal of the person performing the notarial act is affixed to the document or the title and indication of authority to perform notarial acts of the person appears either in a digest of foreign law or in a list customarily used as a source of such information.

Credit: Stewart Title

Hiring a Realtor when buying or selling a house is a smart choice.

Buying or selling a house can be a complicated and time-consuming process, and for most people, it’s the biggest financial transaction they’ll ever make. That’s why it’s crucial to work with a real estate agent who can guide you through the process and help you make informed decisions. Here are some reasons why hiring a Realtor is so important:

  1. Knowledge and expertise: Real estate agents have a deep understanding of the local market, including current trends, pricing, and inventory. They can provide valuable insights that can help you make informed decisions about buying or selling a property. Realtors are also familiar with the legal and financial aspects of real estate transactions, and they can help ensure that all paperwork is completed correctly and on time.
  2. Marketing and exposure: When selling a property, real estate agents can use their marketing expertise to attract potential buyers and increase exposure. They can create professional listings, take high-quality photos and videos, and promote the property through various channels, including online listings, social media, and open houses. This can help attract more potential buyers and increase the chances of a successful sale.
  3. Negotiation skills: Negotiating a real estate deal can be complex and challenging. Realtors have the experience and negotiation skills to help you get the best possible price for your property, whether you’re buying or selling. They can also help you navigate any issues or conflicts that may arise during the transaction.
  4. Professional network: Real estate agents have access to a vast network of industry professionals, including home inspectors, contractors, and attorneys. They can recommend trusted professionals who can help you with any aspect of the transaction, from inspections to repairs to legal issues.
  5. Save time and reduce stress: Buying or selling a house can be a time-consuming and stressful process. Working with a real estate agent can help you save time and reduce stress by handling many of the details for you. They can coordinate showings, handle paperwork, and communicate with other parties involved in the transaction.

In conclusion, hiring a Realtor when buying or selling a house is a smart choice. Realtors have the knowledge, expertise, and resources to help you navigate the complex real estate market and make informed decisions. They can also save you time and reduce stress by handling many of the details for you. If you’re buying or selling a property, consider working with a real estate agent to help you achieve your goals.