Connecticut Real Estate Practices
- Attorney Involvement
- Cancellation/Commitment Fee
- Certificate of Release (of Mortgage)
- Good Funds Requirements
- Joinder of Spouses
- 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.
Historically, by custom, real estate closings in Connecticut have been conducted by attorneys and pursuant to state statutes only attorneys licensed to practice law in the State of Connecticut may be title insurance agents.
Effective October 1, 2019, Public Act 19-88 requires that “real estate closings” must be conducted by a Connecticut licensed attorney in good standing. The statute defines "real estate closing" as a closing for “(1) a mortgage loan transaction, other than a home equity line of credit transaction or any other loan transaction that does not involve the issuance of a lender's or mortgagee's policy of title insurance in connection with such transaction, to be secured by real property in this state, or (2) any transaction wherein consideration is paid by a party to such transaction to effectuate a change in the ownership of real property in this state.”
Does your state permit or require a cancellation fee or commitment fee upon cancellation?
A commitment fee or a cancellation fee is neither required nor prohibited.
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.
Under certain circumstances, Conn. Gen. Stat. § 49-8a permits the recording of an affidavit by an attorney or an officer of a title insurer, which affidavit constitutes a release of lien.
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.
The customary deed form is a warranty deed, but this custom can be varied by contract.
Good Funds Requirements
Is there a good funds requirement in your state?
Yes, Sec. 36a-758 (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.
Non-title-holding spouses need not join in deeds or mortgages.
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.
Who customarily pays for:
(a) Owner’s Policy?
(b) Transfer Tax & Recording Fee?
(c) Survey Charges?
(d) Closing/Settlement Fees?
Who customarily pays for:
(a) Owner’s Policy? Buyer pays.
(b) Transfer Tax & Recording Fee? Seller pays transfer tax. Seller pays recording fee for clearance items (e.g., release of mortgage); Buyer pays recording fee for instruments of conveyance and financing instruments.
(c) Survey Charges? Buyer pays.
(d) Closing/Settlement Fees? Buyer and seller each pay their own.
What kinds of countersignatures, if any, are required to issue the policy?
Policies issued by an agent must be signed by a Connecticut attorney agent.
Real Estate Taxes
Please describe the general tax year, due dates, and delinquency dates, including lien dates and payment cycle.
Real property is assessed by the municipality every October 1st; most towns require payment in two installments, the first installment being due the July 1st following the assessment date and the second installment being due the January 1st following that. A few towns permit payment in quarterly installments.
For more specific real estate tax information, please refer to the respective closing customs of the eight County Bar Associations.
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.
A separate search fee is customary.
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.
The minimum period of time for a title search is forty years pursuant to the Marketable Record Title Act. By custom and underwriting practice, shorter search periods are generally used for refinance transactions.
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?
Mortgage only. Deeds of trust are not used.
Standard Exceptions and Requirements
Please identify the standard exceptions and requirements that are customarily used in your state.
The standard general exceptions are:
Liens for all real estate taxes and assessments for the year October 1, ______ and all subsequent years, which are not yet due and payable. [Requires confirmation that all prior taxes are paid.]
Encroachments, overlaps, boundary line disputes, or other matters which would be disclosed by an accurate survey and inspection of the Land.
Easements, or claims of easements, not shown by the Public Records.
Rights or claims of parties in possession not shown by the Public Records.
Any lien, or right to a lien, for services, labor, or material heretofore or hereafter furnished, imposed by law and not shown by the Public Records.
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.
Rates for policies and endorsements must be filed with the Connecticut Department of Insurance.
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 called a conveyance tax. One portion of the conveyance tax goes to the State; the other portion goes to the municipality where the property is located.
Rates for the State portion of the conveyance tax are uniform throughout the State but vary depending on the type of property. Refer to Conn. Gen. Stat. § 12-494 et seq., and Department of Revenue Services Form OP-236.
The municipal portion of the conveyance tax varies across the State. This rate is available by contacting the town clerk’s office.
Is usury coverage available?
Usury coverage is generally available. Conn. Gen. Stat. Section 37-4, -5, and -6 exempts from usury limits “….any bona fide mortgage of real estate for a sum in excess of five thousand dollars.” See Conn. Gen Stat. Section 37-9 (entitled “Loans to which prohibitions do not apply”).
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 on a deed or security instrument? If so, please describe.
Two witnesses are required on a deed or a mortgage. In addition, the grantor’s/mortgagor’s signature must be acknowledged.