New Massachusetts Homestead Act Set To Become Law

by Rich Vetstein on November 18, 2010 · 0 comments

in Homestead, Massachusetts Real Estate Law

New Homestead Law Went Into Effect 3/16/11 (click here to download)

Automatic $125,000 Homestead For All Mass. Residents; Up to $500,000 In Homestead Protection

For less than $100, a Massachusetts homestead provides a simple and inexpensive asset protection device which shields a principal home from up to $500,000 in certain creditor’s claims. Now the Legislature has passed the long awaited revisions to the Massachusetts Homestead Act (Senate Bill 2406), giving homeowners expanded protection. Pending some minor amendments, the Governor is expected to sign the bill.

Here’s a summary of highlights of the amended bill:

  • All Massachusetts homeowners will receive an automatic homestead exemption of $125,000 for protection against certain creditor claims on their principal residence without having to do anything.
  • All Mass. residents are eligible for a $500,000 “declared homestead exemption” by filing a declaration of homestead at the registry of deeds. For married couples, both spouses will now have to sign the form–which is a change from prior practice.
  • If you already have a homestead recorded at the registry of deeds, you do not have to re-file it. You are all set, and have the full $500,000 protection.
  • Homesteads are now available on 2-4 family homes, and for homes in trust.
  • The existing “elderly and disabled” homestead will remain available at $500,000.
  • If you have a homestead as a single person, and get married, the homestead automatically protects your new spouse! Homesteads now pass on to the surviving spouse and children who live in the home.
  • You do not have to re-file a homestead after a refinance. There’s always been confusion here, with lenders requiring homeowners to either subordinate or release homesteads. Under the new law, homesteads are automatically subordinate to mortgages, and lenders are specifically prohibited from having borrowers waive or release a homestead.
  • Closing attorneys in mortgage transactions must now provide borrowers with a notice of availability of a homestead.

As part of all residential real estate transactions, I always ask clients if they would like me to prepare a homestead declaration for a nominal fee ($40 + $35 state recording fee). Now that the protections are enhanced and attorneys are obligated to disclose, every homeowner should opt to declare a homestead. Please contact us at 781-247-4250 if you would like a homestead recorded on your property.

More info: Secretary of State Homestead Guide

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