Massachusetts Real Estate Practices
- Attorney Involvement
- Cancellation/Commitment Fee
- Certificate of Release (of Mortgage)
- Good Funds Requirements
- Joinder of Spouses
- Liens and Limitations
- Mortgage Tax
- Payment Customs
- Policy Countersignatures
- Real Estate Taxes
- Search and Examination Fees
- Search Requirements
- Security Instruments (Deed of Trust vs. Mortgage)
- Standard Exceptions and Requirements
- State-specific Policy Variations
- Title Insurance Form and Filing Regulations
- Transfer Taxes
- Withholding Taxes
- Witness Requirements
Please describe any requirements under applicable state law for attorney, abstractor or other special professional involvement, for example, in the search, examination, opinion of title, signing, closing, disbursement, recording, preparation of documents, and/or policy-issuance.
Massachusetts is an “attorney state,” and all closings must be handled by them. Title examination may be performed by an independent non-attorney, but the attorney must review the abstract render the opinion of title.
Does your state permit or require a cancellation fee or commitment fee upon cancellation?
There is no required cancellation fee, and one is generally not charged for business consideration.
Certificate of Release (of Mortgage)
If anyone other than the lender (such as a title agent, settlement agent, underwriter or attorney) has the authority to release the security instrument, please describe.
The lender issues the release. A servicer can issue the release, but it must be supported by documentary evidence that the servicer is in fact servicing the loan (e.g., servicing agreement, letter to the borrower to make payments to the servicer, etc.) An attorney practicing in Massachusetts can release a mortgage by use of an affidavit. The affidavit, however, is very comprehensive and must be accompanied by evidence to support it. See Gen. Laws, Chapter 183, sec. 55 (subsection g). The requirements of the statute are stringent and compliance with these requirements can be a complicated process.
Please describe the kinds of deeds that are customary for commercial and residential transactions. Please describe the kinds of deeds that are generally not insurable.
With the exception of the western part of the state, which uses warranty deeds, deeds with only quitclaim covenants are used in all other transactions. Deeds from executors and administrators of an estate contain no covenants.
Good Funds Requirements
Is there a good funds requirement in your state?
Yes, Chapter 183 Section 63B (9-4-19)
Joinder of Spouses
If a non-title holding spouse is required to join in the execution of a deed or a security instrument, please describe. Any analogous rights, such as those in a civil union or equivalent, should also be addressed.
A non-title spouse does not have to join in or otherwise consent to a deed unless (i) a homestead has been filed of record by the title holder (Gen. Laws, Chapter 188) or (ii) the title-holding spouse is suing or being sued by his or her spouse for divorce (Probate Rule 411).
Liens and Limitations
Quick Reference Guide:
Is there a mortgage tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe.
There is no mortgage tax in Massachusetts. There is a tax only on deeds and long-term leases.
Who customarily pays for:
(a) Owner’s Policy? The owner’s policy is paid for by the purchaser.
(b) Transfer Tax & Recording Fee? The transfer tax on deeds is paid for by the seller and the recording fees are generally paid for by the buyer except with respect to the fees to record title-clearing evidence (e.g., discharge or satisfaction of seller’s mortgage).
(c) Survey Charges? Survey charges are paid for by the buyer, with the exception that the seller may be charged for work necessary to clarify a questionable description
(d) Closing/Settlement Fees? Closing and settlement fees are paid for by the buyer.
Please describe any statutory or regulatory requirements for countersignatures in order to issue the policy (for example, residency requirements).
The policy is signed by the attorney-agent.
Real Estate Taxes
Please describe the general tax year, due dates, and delinquency dates, including lien dates and payment cycle.
Real estate taxes are assessed on January 1 of each year for the fiscal year that begins the immediately following July 1 and ends 12 months later on June 30. Payments are generally due quarterly – July, October, January and April – and are considered delinquent if not paid when due. Some municipalities collect on a half-year basis.
Search and Examination Fees
Is it permissible and/or customary to charge a separate search and/or examination fee, and under what circumstances? If your jurisdiction is all-inclusive, please state that.
Search fees can be charged separately (i.e., broken down on the HUD statement). Massachusetts is not an all-inclusive state.
Is there a minimum period of time for a title search required: (a) by state law, (b) pursuant to marketable record title acts, or (c) by any other applicable title examination standards (e.g., state bar association)? Please respond to each category. If a minimum search period exists for any category, please state it.
On residential real estate where there is mortgage financing the attorney is required to do a 50-year search in order to avoid liability under consumer-protection statutes.
Security Instruments (Deed of Trust vs. Mortgage)
Please describe the customary and permissible form(s) of security instruments used in your state.
Who can be listed as the trustee on the Deed of Trust (e.g., residency and/or natural person requirements, etc.)? Can an underwriter or title agent be designated as the trustee, and, if so, is it customary?
Mortgages are used in Massachusetts.
Standard Exceptions and Requirements
Please identify the standard exceptions and requirements that are customarily used in your state.
EXCEPTIONS FROM COVERAGE
Except as provided in Schedule B – Part II, if any such Schedule is attached, this policy does not insure against loss or damage (and the Company will not pay costs, attorneys’ fees or expenses) that arise by reason of the following General Exceptions:
1. Rights of present tenants, lessees or parties in possession.
2. Any lien, or right to a lien, for services, labor or materials heretofore or hereafter furnished, imposed by law and not shown by the public records.
3. Discrepancies, conflicts in boundary lines, shortage in area, easements, encroachments, and adverse circumstances which an accurate land survey and inspection of the premises would disclose.
4. Liens for real estate taxes and assessments, which become due and payable subsequent to the date of this policy, plus unpaid water and sewer charges, if any.
5. IF THE INSURED PREMISES IS A CONDOMINIUM UNIT:
A. Covenants, conditions, restrictions, reservations, easements, liens for assessments, options, powers of attorney and limitations on title, created by the laws of the State of the insured premises or set forth in the Master Deed or Declaration of Condominium, in the related By-laws, or in the Declaration of Trust, as duly recorded in the appropriate Land Records Office and as the same may have been lawfully amended, and in any instrument creating the estate or interest insured by this policy.
B. Loss or damage arising as a result of liens for common charges and attorney's fees pursuant to Chapter 400 of the Acts of 1992. (Massachusetts)
State-specific Policy Variations
If there are state-specific changes to the provisions in the ALTA policies (e.g., Arbitration, Minerals), please describe.
Title Insurance Form and Filing Regulations
Please describe the form and/or rate filing requirements, if any, related to policies and endorsements. Please describe any applicable rating bureau.
Is there a transfer tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe.
The transfer tax is imposed on the seller on deeds or long-term leases and is charged as follows: (a) $2.28 per $500 of consideration in all areas except Cape Cod; (b) $5.70 per $1,000 of consideration on Cape Cod. Additionally, on Nantucket and Martha’s Vineyard the buyer is required to pay a fee of 2% of the purchase price to the county land bank.
Is usury coverage available?
Usury coverage is generally available on first mortgages; it is available on second mortgages in most instances.
Include the following exception in your Massachusetts Usury Endorsement: “provided that notice is given under MGL Chapter 271, section 49.”
What are your state’s requirements, if any, with regard to withholding proceeds from a sale, similar to but not including FIRPTA?
Are witnesses required? If so, please describe.
No witnesses are required, but instruments must be acknowledged.