Massachusetts Real Estate Law

Massachusetts Purchase And Sale Agreement Basics

by Rich Vetstein on May 11, 2010

in Condominium Law, Massachusetts Real Estate Law, Offer To Purchase, Purchase and Sale Agreements

Signing or not signing?TRID Update: Please review our article on new changes with the PS Agreement 

As a real estate attorney, I always take the time to fully explain to our clients the intricacies of the Massachusetts Purchase and Sale Agreement.

The purchase and sale agreement is the governing contract between the Buyer and the Seller regarding the proposed property to purchase. Most Buyers submit an initial Offer to Purchase to a Seller, which spells out the terms of the contract.  The purchase and sale agreement supersedes the offer, and can be thought of as the “long form” contract. At first blush, the purchase and sale agreement, like most legal documents, can be difficult to read and comprehend.

Deal Terms

First, like all contracts, the purchase and sale agreement sets out the terms of the deal. These terms primarily are taken from the offer. This includes the names of the parties, the legal description of the property (taken from the current deed), the purchase price, the mortgage commitment date, the closing date, any Seller credits, and any agreed upon fixtures that will remain with the property or be taken by the Seller.

Title and Deed

Second, the purchase and sale agreement deals with the title to the property and the deed. It lays out the framework for a conveyance (a real estate transfer) in Massachusetts. The agreement spells out that the Seller conveys the deed to the Buyer in return for consideration, then the deed is recorded and the Buyer becomes the owner of the property. However, in Massachusetts, once the deed is recorded at the proper Registry of Deeds, then any title issues “run with the land.”  Thus, the new owner becomes responsible for any outstanding encumbrances or liens that were not properly discharged. In order to protect the Buyer, the purchase and sale agreement provides that the Seller must convey “good, clear and marketable” title. Acting as the buyer’s or lender’s counsel, or both, attorneys will review the title exam and work with the Seller’s attorney to clear any title issues, so that the buyer will receive a certification of title and an owner’s title insurance policy.

Seller Responsibilities

Third, the purchase and sale agreement lays out the responsibilities of the Seller. This includes maintaining insurance and upkeep on the property until closing, obtaining a smoke and carbon monoxide certificate at closing, paying the broker’s commission, obtaining a 6(d) certificate for a condominium, and requiring that the taxes be paid by Seller up until the closing date (through an adjustment to the HUD Settlement Statement). The agreement also provides that the Seller’s agent (either the realtor or the attorney) holds the buyer’s deposit in an escrow account.

Anything But “Standard”

There is a note of caution about the standard form Massachusetts purchase and sale agreement. The standard form provides several hidden advantages to a Seller, I’ve written about on this Blog. Thus, buyers must have an experienced attorney revise the agreement and flag those built in deficiencies. For example, if a Buyer were to default prior to closing, the standard form document provides no cap on the damages; a skilled attorney will know to cap the damages at the deposit. The same is true if a buyer loses his rate lock if there is a delay of the closing; a skilled attorney would use language to protect the buyer in this situation.

An experienced attorney will produce a Rider to the purchase and sale agreement that will have language that protects a Buyer’s deposit and provides an aggressive layer of due diligence. For example, if the Buyer is purchasing a condominium, the Rider should have the Seller make representations that the association is not contemplating any special assessments, there are no pending lawsuits against the association, and the budget is in good order. Other issues include seller repairs, septic system/Title V compliance, radon gas, UFFI insulation, lead paint, and buyers’ access to the property while it is under agreement.

Since the P&S is “anything but standard,” an experienced real estate attorney who review and negotiates the document will certainly add value to the closing process.

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Massachusetts Senate Passes Foreclosure Protection, Homestead Update, and Consumer Protection Bills

by Rich Vetstein on May 5, 2010

in Foreclosure, Homestead, Landlord Tenant Law, Massachusetts Real Estate Law, Mortgage Crisis

Update (June 28, 2010): The bill is heading up to Gov. Patrick’s office for approval.

The Massachusetts Senate recently passed wide-ranging legislation that updates the homestead law, protects tenants in foreclosed properties from arbitrary evictions, criminalizes mortgage fraud and certain unsolicited loans. The legislation, part of a series of consumer protection bills that passed the Senate, was approved unanimously.

Metrowest Senator Karen Spilka, who spearheaded the changes, writes about them on her blog (and she has a Facebook Page!).

Foreclosure Bill

  • Tenants in foreclosed buildings can only be evicted for just cause, or if the building is purchased by a third party. Also, a lender cannot evict a tenant for failure to pay rent unless it has posted and delivered a written notice including critical information, including a contact number for the new owner. This does not prohibit a lender from evicting tenants for other valid reasons, such as interfering with the quiet enjoyment of other tenants, using a unit for illegal purposes, or refusing to allow the lender to enter the unit to make repairs.
  • For homeowners, the legislation temporarily extends the 90-day right to cure period, enacted by the legislature in 2007, to 150 days. The 2007 law gave homeowners 90 days to come up with past due payments on their mortgage, before the lender could require full payment of unpaid balance. This was intended as a cooling off period for the lender and homeowner to work out a new payment plan to avoid foreclosure.
  • Bill requires at least one meeting or telephone conversation between the homeowner and the lender to discuss a commercially reasonable alternative to foreclosure. The lender’s representative must have the authority to agree to the revised terms. The right to cure period can be reduced from 150 days to 90 days if the lender makes a good faith effort to negotiate a commercially reasonable alternative to foreclosure.
  • Allows the 150-day right to cure to be granted once every 3 years; currently, the 90-day right to cure is only available once every 5 years.
  • Creates a 2-year pilot program within the Division of Banks that requires all property owners, including lenders, trustees, and service companies, to register and maintain vacant and/or foreclosing properties in the Commonwealth.

Coverage on this bill from the Boston Globe can be found here.

Homestead Law Update

  • Updates the homestead law to protect up to $500,000 of a home’s value. It also includes unsecured debts, such as credit card debt, that were incurred before the homestead was filed.
  • Extending homestead protection to manufactured homes, and multifamily properties of up to 4 units.
  • Requiring homeowners with more than one property to file a declaration, signed under the penalty of perjury, of which dwelling is their primary residence and therefore eligible for homestead protection to avoid fraud.
  • Clarifying that the proceeds of fire/casualty insurance or sales/takings are protected from creditors. Fire/casualty proceeds are protected until re-occupancy; a homestead is declared on new home; or for 2 years after the date of the fire/casualty.
  • Protecting the proceeds from sales or taking until a new homestead is declared or for 1 year, whichever occurs first.
  • Allowing trustees of trusts to file homestead declarations on behalf of trust beneficiaries who reside in the property as their principal place of residence.
  • Creates an automatic homestead of $125,000 for all homeowners.

Other Consumer Protection Provisions

  • As advocated by the Attorney General, the bill would criminalize residential mortgage fraud.
  • Prohibits financial institutions and lenders from sending consumers unsolicited loans which are a negotiable check, money order, draft or other instrument that may be used to unknowingly activate a loan that was not solicited by the consumer.  10 day right of rescission on these loan products.

The three bills now move to the House of Representatives for further action.

The homestead law update is long-awaited and much needed. I wrote about it in the Fall here.

The foreclosure bill is quite a victory for tenant and distressed property owner advocates.

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Real Estate Professionals: Mark Your Calendars For GBREB Under Agreement Networking Night On June 3

by Rich Vetstein on May 5, 2010

in Massachusetts Real Estate Law, Real Estate Marketing

To Register Email Kristin Langone at GBAR: [email protected]

This will be a super fun night at a very swanky new venue. Think a little piece of Ocean Drive, Miami Beach in Metrowest. All real estate professionals are welcome: Realtors, mortgage professionals, appraisers, home inspectors, attorneys, etc.

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Home Buyer Tax Credit: What You Need For April 30 Deadline

by Rich Vetstein on April 27, 2010

in Massachusetts Real Estate Law, Offer To Purchase, Purchase and Sale Agreements, Tax Credit

As we head to the April 30th deadline for the $8,000 Home Buyer Tax Credit, here’s a quick summary of the rules.

  • Buyers must be under contract on or before April 30, 2010, and close on or before June 30, 2010. Buyers will need to attach to their 1040 tax returns a copy of the signed purchase contract and HUD-1 Settlement Statement.
  • There’s been quite a bit of debate as to whether a signed offer to purchase or signed purchase and sale agreements is sufficient for the April 30 deadline. I’ve been erring on the side of caution by recommending getting the P&S signed by Friday, but some realtors and attorneys disagree and say that a signed offer is enough. I’d like to see some formal IRS guidance here. The IRS rules require the names of all parties on the “binding contract,” and the offer typically is addressed to “owner of record.” If Realtors are going to use the offer, ensure that all parties names are legibly shown on the offer. Bottom line: consult a tax attorney or CPA on tax credit issues, and contact us to get your purchase and sale agreement done by Friday.
  • The maximum credit amount remains at $8,000 for a first-time homebuyer –– that is, a buyer who has not owned a primary residence during the three years up to the date of purchase.
  • The new law also provides a “long-time resident” credit of up to $6,500 to others who do not qualify as “first-time home buyers.” To qualify this way, a buyer must have owned and used the same home as a principal or primary residence for at least five consecutive years of the eight-year period ending on the date of purchase of a new home as a primary residence.
  • The new law raises the income limits for people who purchase homes after Nov. 6. The full credit will be available to taxpayers with modified adjusted gross incomes (MAGI) up to $125,000, or $225,000 for joint filers. Those with MAGI between $125,000 and $145,000, or $225,000 and $245,000 for joint filers, are eligible for a reduced credit. Those with higher incomes do not qualify.

New Requirements

Several new restrictions on purchases that occur after Nov. 6 go into effect with the new law:

  • Dependents are not eligible to claim the credit.
  • No credit is available if the purchase price of a home is more than $800,000.
  • A purchaser must be at least 18 years of age on the date of purchase.

For all qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 tax returns.

A new version of Form 5405, First-Time Homebuyer Credit, is now available here. A taxpayer who purchases a home after Nov. 6 must use this new version of the form to claim the credit. Likewise, taxpayers claiming the credit on their 2009 returns, no matter when the house was purchased, must also use the new version of Form 5405. Taxpayers who claim the credit on their 2009 tax return will not be able to file electronically but instead will need to file a paper return.

Here’s an IRS produced video outlining the program.

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Do Buyers Need A Signed Offer Or Purchase And Sale Agreement For The April 30th Tax Credit Deadline?

by Rich Vetstein on April 26, 2010

in Closings, Massachusetts Real Estate Law, Offer To Purchase, Purchase and Sale Agreements, Tax Credit

As we head towards a major deadline for the popular $8,000 home buyer tax credit, we’ve been asked a number of times by real estate agents and mortgage professionals whether buyers need a signed offer to purchase or signed purchase and sale agreement by the upcoming April 30th tax credit deadline. We’re advising that buyers need a signed purchase and sale agreement by the deadline, as explained below.

In order to qualify for the $8,000 federal home buyer tax credit, the IRS states that buyers need to sign a “binding contract” for the sale by April 30, 2010.

In Massachusetts, there is a two-part system for real estate contracts. The parties first sign an Offer To Purchase, then about 2 weeks later, they sign a more comprehensive Purchase and Sale Agreement. Under the Massachusetts case of McCarthy v. Tobin, a signed standard form Greater Boston Real Estate Board Offer To Purchase may be considered a valid and binding contract even though a purchase and sale agreement must be signed at a later date. However each transaction/offer is unique and may have contingencies or future considerations which take it out of this case law rule. And remember, most of these types of cases are litigated in the courts, so it’s really fact-specific.

Under IRS rules, to claim the $8,000 credit, the buyer will have to attach to their tax return a copy of the “binding contract” showing an execution date on or before April 30, 2010. We just don’t know whether the IRS will interpret a signed Offer To Purchase as a “binding contract.” There is no question a signed Purchase and Sale Agreement is sufficient. However, there’s a risk that the IRS could reject reliance on a signed Offer to Purchase or it could delay qualification for the credit. This is a new rule so we just don’t know how the IRS will interpret it, and that raises a risk.

Accordingly, the prudent approach is to have all buyers claiming the credit sign a purchase and sale agreement by April 30th.  That is what we are advising our buyers, their Realtors and loan officers. We are also now inserting a special tax credit provision in purchase and sale agreements protecting the buyer’s eligibility for the credit.

Of course, our office is well-equipped to get a Purchase and Sale Agreement completed and signed by the Friday deadline. We’ll be working around the clock this week for our buyers and sellers! Contact us at 508-620-5352 or by email.

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Will Short Sales Get A Boost From Obama’s HAFA Program?

by Rich Vetstein on April 20, 2010

in Foreclosure, Massachusetts Real Estate Law, Short Sales

The Obama Administration’s Home Affordable Foreclosure Alternative program, known as HAFA just kicked off on April 5th. The HAFA program promises to streamline short sale transactions. However, read the fine print, and there are a lot of unanswered questions about the program and how it will affect short sale transactions in the “trenches.”

Is the new program really going to streamline the process or create more headaches for the industry?

To begin, it’s important to clarify that the HAFA program is part of the federal Home Affordable Modification Program (HAMP). HAFA guidelines will only apply to short sale or deed in lieu of foreclosure requests made by borrowers who have applied for a HAMP loan modification. That means borrowers will have had to go through all the time, hassle and endless forms under the HAMP modification program before even being eligible for a HAFA streamlined short sale approval. This requirement will likely substantially reduce the number of HAFA-required short sales. HAFA also requires participating lenders to forgive a borrower’s loan deficiency if the lender accepts a short sale. This is a significant deviation from many lenders’ policies. There is even some debate about which lenders actually fall within the mandate of HAFA. For all of these reasons, it is far too early to speculate regarding the impact of HAFA on the current backlog of short-sale requests. It is very unlikely, however, that HAFA is going to quickly streamline the short sale process.

What are the benefits of the HAFA program?

HAFA does create the opportunity for standardization of short sale and deed in lieu of foreclosure forms. Given the wide range of agreements currently in use, standardization will help borrowers to better understand the terms of any negotiation. HAFA also requires lenders to standardize their criteria for the approval of a short sale or deed in lieu. Again, that kind of practice will enable borrowers to better anticipate the likelihood that a particular offer will be accepted and what the acceptance means.

Short sales seem to be picking up right now. But, in the end, will the already in place REO system be a better way to alleviate these troubled loans?

Short sales and REO sales are complementary processes. Both alternatives are necessary to systematically deal with property subject to defaulted loans. All available statistics indicate that when a mortgage loan is in default, the mortgaged property begins to fall in value. It’s easy to understand why. Even the most honorable borrower faced with a loan in default is unlikely to continue necessary maintenance much less improvement. Short sales allow these properties to be sold much more quickly than would occur if a full foreclosure and sale after redemption was required. As such, less reduction in property value results from the short sale alternative.

Not every parcel, however, is going to qualify for short sale treatment. In these cases, lenders will be forced to institute a foreclosure. Accordingly, an effective REO disposition process must be maintained by mortgage lenders. Whether short sales or foreclosure and REO resale becomes the norm for troubled properties remains to be seen. In any event, everyone benefits from a timely process which retains as much value as possible in our homes.

Here in Massachusetts, short sale transactions appear to be on the rise. However, there are plenty of stories of buyers waiting many many months to close. If you are considering buying a short sale property, read our post on short sale transactions, and be prepared to wait it out, which may well be worth it given the reduced price you’ve likely negotiated.

Source:  Housing Wire

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More Legal Commentary On Ibanez Foreclosure Decision From Real Estate Attorneys

by Rich Vetstein on April 17, 2010

in Foreclosure, Massachusetts Real Estate Law, Mortgage Crisis, Mortgages

Reporter Steven Altieri of the real estate trade journal Banker & Tradesman recently published an article on the Ibanez foreclosure case, Impending SJC Ibanez, Title Ruling May Invalidate Thousands Of Foreclosures, Why Real Estate Attorneys Expect The Worst, And What It Means To The Industry.

Since we’ve written about the case extensively here, Steve asked for my views about the impact of the case and recent matters I’ve handled with Ibanez title defects:

Framingham real estate attorney Richard Vetstein recently represented a family who had bought a house out of foreclosure about a year ago, then invested in excess of $100,000 in improvements to the property with the intention of selling it to their daughter. But before they could complete the sale, a title issue came up and put the transaction on hold.

In Vetstein’s client’s case, when the original owner was foreclosed upon, the mortgage company did not have a properly recorded assignment. To clear the title, Vetstein had to track down the original owner in Alabama, and persuade him to sign over the deed to the property.

“They can close now that the title issue is solved, but in a lot of cases that [is] not going to be able to be solved,” said Vetstein. “We were lucky, that’s what it came down to.”

Steve asked me how I would handicap the appeal of the case:

Vetstein, who has blogged on the Ibanez case at length, thinks the court might uphold the Ibanez decision.

“Given the current constitution of the court and their tendencies of recent years to be kind of moving towards some pro-consumer decisions, I wouldn’t be surprised if they upheld the land court probably by a slim margin,” Vetstein said. “And so for people who are stuck with an Ibanez issue, that is in essence the worst-case scenario.”

Indeed, it’s unlikely that a “pro-consumer” verdict upholding the Ibanez decision would actually help consumers on the whole. Home buyers or investors who thought they had gotten a good deal and a clean title on a foreclosed property will instead be saddled with hefty legal bills and an inability to sell their property.

Lastly, Steve asked if the Ibanez ruling has created an business development opportunties for real estate attorneys:

“I don’t know of any real estate attorney using Ibanez as a business development opportunity, mainly because solving these title defects, if at all, is incredibly difficult and in some cases impossible,” Vetstein said. “It’s a ‘lose-lose’ in many situations.”

One aspect of the case could potentially provide plenty of work for attorneys. Should the SJC uphold the Ibanez decision, Vetstein reasons that there will be many claims against the foreclosing lenders and the foreclosure attorney, for failing to convey good title.

“There will also be claims for rescission of these transactions,” he added. “There is a class action against lenders and foreclosing attorneys which could encompass many millions in potential damages.”

Banker & Tradesman is a great publication. If you don’t want a paid subscription, you can follow them on Twitter and Facebook.

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Make Mortgage Contingency Dates Workable & Don’t Wait Until Last Minute For Extensions

by Rich Vetstein on April 17, 2010

in Massachusetts Real Estate Law, Offer To Purchase, Purchase and Sale Agreements, Realtors

This week, a very interesting decision involving the negotiation of a residential purchase and sale agreement came down from the Massachusetts Appeals Court in Coviello v. Richardson. Click here to view the decision. The case highlights the need for realtors and real estate attorneys to be proactive with respect to mortgage contingencies and requests for extensions.

The Facts

In the case, on February 12, 2008, buyer (Coviello) and seller (Richardson) signed the standard form Offer to Purchase, which provided that a Purchase and Sale Agreement would be executed by 5:00pm on February 26th. Under the mortgage contingency clause of the offer, which gives the buyer the right to cancel if she cannot obtain financing, the buyer was required to secure a firm mortgage commitment by February 29th. The realtor, who prepared the offer, made the first mistake here: requiring her client, the buyer, to obtain a firm mortgage commitment not even 2 weeks after the parties signed the offer. This was and remains completely unrealistic.

Predictably, the buyer and her broker had immediate concerns that they would be unable to meet the mortgage commitment deadline. The broker asked the buyer’s attorney, Scott Kriss, if he would ask the seller to agree to extend the commitment deadline for an additional week. According to the decision, the request was not immediately conveyed to the seller.

Two hours before the 5:00pm deadline to sign the purchase and sale agreement, Attorney Kriss sent an email to the seller’s attorney, Alan Sharaf, requesting the extension. The seller, who was dealing with a high-risk pregnancy, refused to extend the deadline. No agreement could be reached, and there was no tender or signing of the purchase and sale agreement. (It does appear that the pregnant seller got “cold feet” and backed out of the deal–the request for a one week extension is eminently reasonable and wouldn’t have exposed her to any significant risk).

The buyer sued, claiming that the seller’s refusal to agree to the extension was a breach of the deal. The Land Court initially ruled in favor of the buyer, but the Appeals Court overruled the decision in favor of the seller, holding that a jury would have to decide whether the seller repudiated the contract or would have proceeded with the original terms. The case will be heading to trial.

Take Away

In our opinion, the lesson for realtors and attorneys from this case is (1) make the mortgage contingency dates workable in the offer, and (b) if you are asking for an extension at the 11th hour, protect your buyer in case the seller refuses to agree.

First, the realtor should have used a more realistic mortgage contingency deadline. In the current underwriting environment, realtors should allow at least 30-45 from the signing of the offer for a mortgage commitment.

Second, in our opinion, the buyer’s attorney’s apparent delay in asking for the extension until the 11th hour certainly didn’t help the situation. He could have protected the buyer a lot more had he coupled the request for the extension of the mortgage commitment deadline with either (a) notice that if the seller would not agree, the buyer would opt out of the deal entirely, or (b) a tender of the purchase and sale agreement with the original deadlines (assuming the buyer would take on the risk of being unable to make the deadlines). This would have “boxed in” the seller to either agree to the extension or go through the deal, essentially calling her bluff. At least it would have enabled the buyer to have been in a much better position for litigation because now the fight is over whether the seller would have gone through the original deal. Granted, it appears that the pregnant seller had already made up her mind that she wasn’t going through the deal, no matter the reason.

To the credit of the realtor and attorneys involved, it’s much easier for me to play Monday morning quarterback.

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Our Blog Rocks Google

by Rich Vetstein on April 13, 2010

in Blogging, Massachusetts Real Estate Law, Real Estate Marketing

We created this cool video through the YouTube/Google Search Story creator. Not only is it a neat marketing tool, but for us, it really showcases how high we are ranking on Google these days. We are consistently on Google’s first page — and even #1 — for search results relating to all major topics of Massachusetts and national real estate law.

If you are a realtor, mortgage lender, or other real estate professional interested in contributing to our blog through guest posts and gaining some serious “Google Juice,” please contact us, and we’d be happy to discuss it.

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Recent Flooding Impacts Spring Sales Season And Raises Thorny Disclosure And Inspection Issues

by Rich Vetstein on April 9, 2010

in Home Improvement, Insurance, Massachusetts Property Values, Massachusetts Real Estate Law, Realtors

While folks here in Massachusetts are finally drying out from the Big Flood of 2010, it’s clear that it has negatively impacted the spring real estate market, and will have repercussions for years ahead for buyers and sellers of affected properties.

Impact On The Market

As recently reported in the Boston Globe, realtors around the state have said the flooding caused canceled and delayed closings, final walk-throughs under inches of standing basement water, and postponements of listing homes for sale. Also, lenders are requiring re-inspections and second appraisals to ensure that homes haven’t lost significant value due to the flooding. This is unfortunate as we’re in the middle of the usual busy spring sales season, made even busier by the soon-to-expire $8,000 first time home buyer credit. (Hey President Obama, how about extending the credit for Massachusetts like you did for the tax filing deadline!).

Disclosure Dilemma

Sellers who’ve been affected by the flooding are asking themselves and their realtors how they should handle the inevitable question from buyers: did your basement flood? Under Massachusetts disclosure law, while sellers are under no obligation to volunteer information, they must answer truthfully to any question posed directly by buyers regarding the condition of their property. Real estate agents are held to a higher standard. They must affirmatively disclose any fact that may have a material impact on whether the buyer would purchase the property. You better bet that whether a home experienced water penetration is “material.”

So, realtors and sellers would be wise to come clean if a home was affected by the recent flooding. The key is how to present the flood damage in the best possible light. Which brings me to the next topic…

Get It Fixed, And Done Right

How did you repair the water damage, and are you taking any steps to prevent it from happening again? Tough questions, because this was a 50 or even 100 year storm event. A flooded basement two weeks ago may never get a drop of water again.

Regardless of whether you are now going to invest in a perimeter drain/sump pump system, homeowners should hire licensed contractors who will pull permits to repair all flood damage. Having it done right will prevent even greater headaches later in the form of mold, dry rot and the like. As my friend general contractor George Lonergan of Lonergan Construction points out, pulling permits gives  sellers the ability to show buyers that flood damage has been repaired correctly by licensed and qualified contractors with sign offs from the local building inspector.

Lastly, I want to point out to buyers that they shouldn’t simply walk away from a home which experienced flooding or has a sump pump system. Many properties in river watershed communities like Wayland, Sudbury, and Natick for example have historically been subject to flooding and wet basements. Seeing a well run and working dry basement system/sump pump/french drain is a good sign actually. What you don’t want is what looks like a dry basement which later floods and then requires a sump pump system later on.

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The Condominium HO-6 Insurance Policy: Fannie, Freddie & FHA Required

by Rich Vetstein on April 6, 2010

in Condominium Law, Fannie Mae, FHA, Insurance, Massachusetts Real Estate Law

“Walls In” Condo Unit Coverage Required By Many Lenders

A HO-6 policy is like a regular homeowner’s policy, but for a condominium unit, and with a lot more extras. HO-6 insurance policies cover the interior of the unit and personal property inside–commonly known as “studs in” or “walls in” coverage.

HO-6 Now Required By Lenders

Under the new Fannie Mae (FNMA) and FHA overhaul of condominium lending guidelines, lenders are now requiring HO-6 policies for new condo unit purchases. Sounds like common sense, but HO-6 policies weren’t always required by lenders, and many condominium unit owners were under the mistaken impression that the master condominium insurance policy covered all damage to the interior of their unit as well as damage to furniture, appliances, etc. That isn’t so. In most cases, that master insurance policy covers common areas such as the hallways, roof, basement, elevator, boiler, and common walkways, for both liability and physical damage–but not the inside of units.

Coverages

HO-6 policy benefits include:

  • Coverage for damage to personal property such as furniture, computer equipment and clothing
  • Fill in the gaps of the master insurance policy and cover losses under master policy deductibles
  • Personal liability coverage
  • Interior walls and floor coverings coverage
  • Coverage for improvements or upgrades (most master insurance policies only cover the original condition and value of the unit).
  • Usually has small deductible and fairly inexpensive

Under the new lending rules, an HO-6 insurance policy must provide coverage for no less than 20% of the condominium unit’s appraised value.

High Deductible Protection

Another benefit of obtaining an HO-6 policy is that in certain situations, it will provide gap coverage caused by the often high deductibles on a master insurance policy. These days, condominium associations have been cutting costs by increasing their deductibles, anywhere from $10,000 to even $50,000. What’s more, condominium documents often provide that the unit owner is responsible for losses falling below the deductible. A well-tailored HO-6 policy will protect you in this situation. Here is a good article about the tug-of-war on deductibles.

Loss Assessments

HO-6 policies can also provide coverage for assessments applied an individual unit due to a direct loss to the condominium. The loss must be a “peril” covered under the unit owner’s individual policy, not be levied by a governmental agency, and not be related to earthquake damage. A standard condo policy typically includes up to $1,000 in loss assessment coverage. Additional coverage can be covered for a nominal amount.

The HO-6 policy is a must have for every condominium owner!

If you need an HO-6 policy, please contact my good friend, Kate Kissane at Morrill Insurance in Sudbury, MA. Email: [email protected] or tel: 978-443-9912. 

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Federal Aid And Tax Extension To May 11 Available To Massachusetts Homeowners Affected By Flooding

by Rich Vetstein on April 1, 2010

in Insurance, Massachusetts Property Values, Massachusetts Real Estate Law

President Obama and the Federal Emergency Management Agency (FEMA) on Monday night declared a “major disaster” exists in Massachusetts due to rainstorms and flooding that began earlier this month and continues. The 7 affected Massachusetts counties are Bristol, Essex, Middlesex, Norfolk, Plymouth, Suffolk, and Worcester counties. Federal funds to homeowners in those counties affected by the recent flooding will be available. (Most flooding damage is not covered by standard homeowner’s policies, so this aid is very helpful to those hardest hit). The FEMA Massachusetts flooding resource page is here.

Also, the IRS and Mass. Department of Revenue announced tax filing extensions to May 11 are available to flood victims in the above affected counties. The extensions are automatic for all filers.

Very important:  If you are considering applying for aid, document all damage and repair efforts. Take photographs and video of the flooding and resulting damage. Keep copies of all receipts for sump pumps, air blowers/fans, equipment, contractors, plumbers, electricians, etc. Keep copies of all estimates for repairs. Basically, treat this as any other insurance claim.

The federal aid package includes:

  • Rental payments for temporary housing for those whose homes are unlivable. Initial assistance may be provided for up to three months for homeowners and at least one month for renters. Assistance may be extended if requested after the initial period based on a review of individual applicant requirements. (Source: FEMA funded and administered.)
  • Grants for home repairs and replacement of essential household items not covered by insurance to make damaged dwellings safe, sanitary and functional. (Source: FEMA funded and administered.)
  • Grants to replace personal property and help meet medical, dental, funeral, transportation and other serious disaster-related needs not covered by insurance or other federal, state and charitable aid programs. (Source: FEMA funded at 75 percent of total eligible costs; 25 percent funded by the state.)
  • Unemployment payments up to 26 weeks for workers who temporarily lost jobs because of the disaster and who do not qualify for state benefits, such as self-employed individuals. (Source: FEMA funded; state administered.)
  • Low-interest loans to cover residential losses not fully compensated by insurance.  Loans available up to $200,000 for primary residence; $40,000 for personal property, including renter losses. Loans available up to $2 million for business property losses not fully compensated by insurance. (Source: U.S. Small Business Administration.)
  • Loans up to $2 million for small businesses, small agricultural cooperatives and most private, non-profit organizations of all sizes that have suffered disaster-related cash flow problems and need funds for working capital to recover from the disaster’s adverse economic impact.  This loan in combination with a property loss loan cannot exceed a total of $2 million. (Source: U.S. Small Business Administration.)
  • Loans up to $500,000 for farmers, ranchers and aquaculture operators to cover production and property losses, excluding primary residence.  (Source: Farm Service Agency, U.S. Dept. of Agriculture.)

How to apply for assistance: Those in the counties designated for assistance to affected residents and business owners can begin the disaster application process by registering online at www.disasterassistance.gov/ or www.fema.gov or by calling 1-800-621-FEMA (3362) or 1-800-462-7585 (TTY) for the hearing and speech impaired. The toll-free Teleregistration numbers will operate Monday through Friday from 7 a.m. to 1 a.m., on weekends – Saturday and Sunday from 7 a.m. to 10 p.m., until further notice.

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TitleHub Has Arrived: Stay Informed And Stay Connected To Your Real Estate Transaction

by Rich Vetstein on March 28, 2010

in Blogging, Closings, Electronic Closings, Massachusetts Real Estate Law, Realtors

After months in the making, I am very pleased to announce the roll-out of TitleHub Closing Services, LLC, a cutting-edge closing settlement service that uniquely provides a full platform of legal and technology-based services. TitleHub’s mission is to transform the convoluted real estate closing process into an easy, customer-focused and technologically enhanced experience. In collaboration with my colleague Marc Canner, Esq., we have created a company that we believe will serve as the model for the next generation of residential real estate title and closing services.

Buyers, sellers, realtor and lenders will “stay informed” and “stay connected” to their transactions through:

  • Our innovative, content-packed website (www.titlehub.com) which serves as a great informational resource.
  • Our “E-Closings” system. This is a secure on-line document management system that allows borrowers and real estate professionals unlimited real-time access to obtain status updates of their deals and the ability to upload and download key transactional documents (recorded condominium documents, executed Purchase and Sale Agreement, Good Faith Estimate, HUD-1 Settlement Statement, etc). Click here for more information.
  • Exclusive partnership with the Massachusetts Real Estate Law Blog.
  • Social media interaction. Check us out on Facebook, Twitter, Linked In and Active Rain.
  • Seminar Series; We offer topical seminars to realtors and lenders to help them stay current with the complicated real estate legal landscape as well as seminars to learn new marketing, blogging, and social media techniques.
  • Paperless Solutions. We do have the ability to electronically record deeds and mortgages at registry of deeds which offer the service. In the future, we hope to be at the forefront of true e-closing paperless transactions, once there is broader lender and regulatory acceptance.

If you are a realtor or mortgage professional interested in TitleHub’s platform, please contact us at [email protected], and we’ll give you a demonstration.

The TitleHub Leadership Team
Marc E. Canner, Esq., President/CEO
Richard D. Vetstein, Esq., Vice President and Director of Marketing
Patrick T. Maddigan, Esq., Director of Operations & Business Development

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10 Questions To Ask Before Buying A Massachusetts Condominium Unit

by Rich Vetstein on March 27, 2010

in Condominium Law, FHA, Leasing, Massachusetts Real Estate Law, Purchase and Sale Agreements

brownstone1.jpgBuying a condominium unit can be more involved than buying a single family home. This is because you have to worry about both the unit itself and the condominium project as a whole.

10 Questions You Must Ask Before Purchasing A Condominium Unit

To borrow from a famous phrase, not all condominiums are created equally. Some condominiums are very well run; some are quite poorly run and underfunded. Buyers interested in purchasing a condominium unit must do their homework:  not only about the condition of the individual unit they are interested in purchasing, but on the financial health and governance of the condominium as a whole. Remember, you are buying into the entire project as much as you are the unit, and your decision will impact your daily living and your ability to re-sell.

Here are the 10 questions buyers should ask when deciding to purchase a condominium unit:

  1. What is the monthly condominium fee and what does it pay for? The monthly condominium fee can range quite dramatically from condominium to condominium. The fee is a by-product of the number of units, the annual expenses to maintain the common area, whether the condo is professionally managed or self-managed, the age and condition of the project, and other variables such as litigation. For budgeting and financing you need to know the monthly fee and exactly what you are getting for it.
  2. What are the condominium rules & regulations? Condominium rules can prohibit pets, your ability to rent out the unit, and perform renovations. Make sure you carefully review the rules and regulations before buying.  Needless to say, the buyer’s attorney should review and approval all condominium documents, including the master deed, declaration of trust/by-laws, covenants, unit deed and floor plans to ensure compliance with state condominium laws as well as Fannie Mae and FHA guidelines, as necessary.
  3. How much money is in the capital reserve account and how much is funded annually? The capital reserve fund is like an insurance policy for the inevitable capital repairs every building requires. As a general rule, the fund should contain at least 10% of the annual revenue budget, and in the case of older projects, even more. If the capital reserve account is poorly funded, there is a higher risk of a special assessment.  Get a copy of the last 2 years budget, the current reserve account funding level and any capital reserve study.
  4. Are there any contemplated or pending special assessments? Special assessments are one time fees for capital improvements payable by every unit owner. Some special assessments can run in the thousands, others like the Boston Harbor Towers $75 Million renovation project, in the millions. You need to be aware if you are buying a special assessment along with your unit.  It’s a good idea to ask for the last 2 years of condominium meeting minutes to check what’s been going on with the condomininium.
  5. Is there a professional management company or is the association self-managed? Usually, a professional management company, while an added cost, can add great value to a condominium with well run governance and management of common areas. But for smaller condominiums, self-management works just fine.
  6. Is the condominium involved in any pending legal actions? Legal disputes between owners, with developers or with the association can signal trouble and a poorly run organization. Legal action equals attorneys’ fees which are payable out of the condominium budget and could result in a special assessment.  In some states, you can run a search of the condominium association in the court database to check if they’ve been involved in recent lawsuits.
  7. How many units are owner occupied? A large percentage of renters can create unwanted noise and neighbor issues. It can also raise re-sale and financing  issues with the new Fannie Mae and FHA condominium regulations which limit owner-occupancy rates. If your buyer is using conventional financing, check if it is a Fannie Mae approved condo. If FHA financing, check if it’s an FHA approved condo. (Thanks mortgage specialist Lou Corcoran for the links)
  8. What is the condominium fee delinquency rate? Again, a signal of financial trouble, and Fannie Mae and FHA want to see the rate at 15% or less.
  9. Do unit owners have exclusive easements or right to use certain common areas such as porches, decks, storage spaces and parking spaces? Condominiums differ as to how they structure the “ownership” of certain amenities such as roof decks, porches, storage spaces and parking spaces. Sometimes, they are truly “deeded” with the unit, so the unit owner has sole responsibility for maintenance and repairs. Sometimes, they are common areas in which the unit owner has the exclusive right to use, but the maintenance and repair is left with the association.  Review the Master Deed and Unit Deed on this one.
  10. What Does The Master Insurance Policy Cover? The condominium should have up to $1M or more in coverage under their master condominium policy. For buyer’s own protection, they should always buy an individual HO-6 policy covering the interior and contents of the unit, because the master policy and condo by-laws may not cover all damage to their personal possessions and interior damage in case of a roof leak, water pipe burst or other problem arising from a common area element. Ask for a copy of the master insurance policy and don’t forget to check the fine print of the by-laws. Sometimes, there’s language that would hurt a unit owner in case of a common area casualty. Condominiums over 20 units should also have fidelity insurance to protect against embezzlement.

I posted this list on the Realtor ActiveRain website and it was the featured post, generating a slew of great comments from real estate brokers around the country.

Of course, a good real estate attorney will help buyers and their realtors with this “due diligence.” As part of our standard condominium representation, we will review the following condominium documents and issues:

  • Master Deed and amendments
  • Declaration of Trust/By-Laws, Rules & Regulations
  • HOA Covenants/Restrictions
  • Unit Deed and Floor Plans
  • Condominium Budget and Capital Reserve Fund
  • Fannie Mae/FHA Compliance Provisions
  • Condominium Annual and Special Meeting Minutes
  • Pending or Contemplated Special Assessments or Litigation

We will also build in provisions into your purchase and sale agreement to protect you in case there are unanticipated or undisclosed issues with the condominium which affect your willingness to move forward with the transaction. Happy condo hunting!

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Richard Vetstein Quoted In Boston Globe Article About Recent Developers’ Rights Case

by Rich Vetstein on March 24, 2010

in Massachusetts Real Estate Law, Permitting/Zoning

Boston Globe reporter Jenifer McKim read my blog post, Four Toed Salamanders And SLAPP Suits, and decided that it would be a great topic to write about. Her superb article, How A Salamander Raised A Rights Issue, was published today, and I was fortunate enough to be quoted:

Richard Vetstein, a Framingham real estate lawyer, said the decision was a victory for developers in a state that has an especially tough permitting process.

“Whether it is zoning, whether it is wetlands, you name it, vernal pools, you can invoke some pretty serious regulation and have a property get bogged down pretty quickly,’’ said Vetstein, who wrote about the salamander case on his Massachusetts Real Estate Law blog.

The case is very interesting, pitting free speech rights against developers’ rights to build.

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Controversial Ibanez Foreclosure Case Heading Up To Massachusetts Supreme Judicial Court

by Rich Vetstein on March 23, 2010

in Foreclosure, Massachusetts Real Estate Law, Mortgage Crisis, Mortgages, Title Defects

Update (July 27, 2010): Oral argument is scheduled for October 7, 2010.

Good news for those eagerly following the controversial U.S. Bank v. Ibanez case, which invalidated thousands of foreclosures across the state. On March 22, the Massachusetts Supreme Judicial Court (the highest appellate court in the state) agreed to take the case on direct appellate review (as I originally predicted). This sets the stage for one of the most important real estate decisions in recent years.

The SJC’s acceptance of the case now expedites what will be the final word in this case, good news for everyone affected by this ruling. A final decision, however, is still many months away. Both sides still have to file briefs, and the case will be scheduled for oral argument probably within 4-5 months, with a decision coming several months later. (Appeals take time).

Click here and here for my prior posts on this case. Here is Globe reporter Jenifer McKim’s story on the development.

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A Real Estate Attorney’s Guide To Choosing A Massachusetts Real Estate Broker

by Rich Vetstein on March 16, 2010

in Massachusetts Real Estate Law, Realtors, Technology

As a real estate attorney, it should come as no surprise that people often ask me to recommend a real estate broker. I often give out several names, but I also give out this Guide To Choosing A Realtor, to help them focus on all the issues and ask the right questions.

Guide To Choosing A Massachusetts Real Estate Broker

Choosing a Realtor is the first and perhaps the most important decision a home buyer will make. For purchasing a home, your real estate broker is really a Project Manager, guiding you through the entire home buying process from going to open houses to closing and beyond. She will not only help you find your “dream home” and negotiate with the sellers, but she will help you assemble a team including a mortgage lender, home inspector, a real estate attorney, a contractor, and other service professionals. For sellers, your Realtor is the key to maximizing the return on your most important investment.

Given the overwhelming number of realtors in the marketplace, choosing the right one can be overwhelming. Here are my tips to selecting the best Realtor. It’s best to use all the tools available to find the best fit.

Step 1: Search, Create A List, Do Your Due Diligence.  You’ll want to obtain as many as 5-10 names. Take it seriously and do your due diligence.

  • Word of Mouth. Ask people you trust for recommendations. Ask your friends, family, financial planner, attorney, or local politician. Call local agencies and ask who their top producers are.
  • Ask Around Town. Good Realtors are actively involved in their communities, serving on town boards, school communities, new family networks, and chambers of commerce. These brokers know the neighborhoods like the back of their hands. They know the market. They can tell you who just sold, bought, and what listing expired. They know the best elementary schools. They know whether the quiet street in the summer turns busy when the school buses start rolling down. Find them.
  • Use the Internet. The Internet is an incredibly powerful tool to find potential Realtors and vet recommendations. Understand that all savvy, sales oriented Realtors have a web presence and they know how to leverage internet marketing and social media. Google the town/city and “homes realtors” and see what comes up. If you have a name of a Realtor, Google them and check out their website or blog. Check out his listings and just solds. Read their articles on ActiveRain, a realtor blog site. Check their Facebook or Twitter pages.
  • Use Multiple Listing Service as a Tool. Virtually every Realtor website enables you to access Multiple Listing Service (MLS) information. With MLS access, you should be able to get a sense of which Realtor has a high number of listings and sales in the town or neighborhood you desire. You will also see how the Realtor markets a listing. Is the listing well presented? Are the photographs high quality and sufficient? Is the home staged? Are the descriptions captivating and accurate?
  • Check License/Designations. You can check a Massachusetts Realtor’s state license status here on the Real Estate Board of Registration site. An indication of additional expertise is whether the Realtor holds a special certification such as Certified Residential Specialist (CRE), Accredited Buyer’s Representative (ABR), Certified Real Estate Brokerage Management (CRB). Click here for more info about these certifications.

Step 2: Interviews. Armed with the above information, a buyer or seller should narrow the pool with phone or personal interviews, and ask the tough questions.

  • Basics. Are you a full time broker? How many years experience do you have? What is your educational background and real estate training?
  • Listings. How many listings have you had in the last 2 years? How many sales of those listings? How many expired listings have you had in the last 2 years? What causes do you attribute to expired listings? How long, on average, do your listings take to sell?
  • Marketing. What’s your marketing strategy for new listings? What’s your pricing strategy? Do you recommend home staging? What marketing outlets do you find most effective, i.e, print advertising, MLS, online, direct mail, etc. Can you provide us with a Comparative Market Analysis (CMA)?  What type of research tools to you use? Would you recommend a broker’s open house or public open house for our listing?
  • Preparation. A good test of a Realtor’s acumen is whether he comes well prepared to your meeting. Is he armed with market data, listings, research, trends and the like? Does he have an initial pricing strategy? Does he have a game plan for searching properties?
  • Type of Agency?  Some Realtors represent solely buyers. Some focus only on sellers. Most cater to both. But there are different agency rules for each type of representation. By law, your Realtor must explain which agency you are operating under, and review and have you sign the Massachusetts Mandatory Licensee-Consumer Relationship Disclosure form. We’ve prepared a handy fact sheet on broker agencies which you can download here.
  • Communication. Are you available to us when we need you? Do you use an assistant? Can we contact you after hours? By email or text? Are you good with demanding clients? How many current clients do you have? Being accessible and responsive separates the good realtors from the average.
  • Recommendations. Do you have written recommendations from clients or can we contact your 3 most recent clients?

Step 3. Select your Realtor. Go with your instincts. Remember, a good Realtor does not tell her client what he or she wants to hear. You are looking for independent, professional advice.

Feel free to print out this list and use it as a handy guide as you interview and select your Realtor. If you want some names of several excellent realtors in all of the major areas and towns, shoot me an email.

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New Massachusetts Smoke Detector Law Goes Into Effect April 5: Upgrade To The Latest Photoelectric Technology

by Rich Vetstein on March 13, 2010

in Massachusetts Real Estate Law, Safety

This year, please consider purchasing a new photoelectric smoke detector for the kitchen and bathroom areas which is required by the new Massachusetts smoke detector regulations which go into effect on April 5, 2010. The new regulations require that certain properties be equipped with the latest photoelectric smoke detectors which are not as prone to false alarms as older ionization based detectors. Click here for my prior post about these changes.

The law specifically requires photoelectric detectors covering the area within 20 feet of a kitchen or bathroom containing a bathtub or shower. The older ionization detector is prohibited in these places due to their tendency to be set off by steam.

The new regulations only apply to single family homes sold on or after January 1, 2010. But why run the risk? The safety of your family and children should be paramount.

Here’s a great Guide to the smoke detector law put out by the Department of Fire Services.

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Four Toed Salamanders and SLAPP Suits

by Rich Vetstein on March 9, 2010

in Massachusetts Real Estate Law, Permitting/Zoning

spotted-salamander_721_600x450The recent case of Brice Estates v. Smith where an abutter trespassed on a developer’s land to photograph endangered female four toed salamanders got me thinking about the frequent convergence of developer’s rights vs. citizen’s free speech rights in real estate disputes. In the case, the abutter sought refuge under the pro-free speech anti-SLAPP law, but the court said that he was still trespassing.

A SLAPP is an acronym for Strategic Litigation Against Public Participation. Before being legislatively outlawed, real estate developers would often use SLAPP lawsuits to muzzle abutters who would organize and complain during town meetings and sue to stop real estate projects. The abutters couldn’t afford to defend against the SLAPP suits, so they would back down.

Concluding that citizens’ free speech rights were being suppressed by SLAPP suits, the Massachusetts Legislature in 1994 outlawed them in what’s now referred to as the “anti-SLAPP Act.” The law protects such free speech activities such as filing zoning appeals, reporting violations to state agencies, and lobbying. The anti-SLAPP Act has been one of the most litigated pieces of legislation within the last 15 years.

Anyways, back to the four toed salamanders. Proving the existence of endangered wildlife (spotted frogs, diamond backed terrapins, barn owls, you get the picture) is a sure fire way to get a real estate project derailed, or at least subject to much stricter permitting, delays and scale downs. And that’s exactly what the abutter did in the Brice Estates case when he tip-toed onto the developer’s land with his Nikon to do his best National Wildlife photo-essay. So naturally, the developer sued the abutter for trespassing.

Arguing that the trespass claim was really a SLAPP suit, the abutter said that the developer sued him just for reporting the salamander to the state. The court disagreed, ruling that trespassing wasn’t a constitutionally protected right.

So the moral of the story is that a quest to find a female four toed salamander can get you into some legal trouble.

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What Does A Massachusetts Real Estate Closing Attorney Do Exactly?

by Rich Vetstein on March 3, 2010

in Closings, Massachusetts Real Estate Law, Purchase and Sale Agreements, RESPA

Signing or not signing?A lot more than you might think. Plus, Massachusetts law now requires attorneys to preside over residential real estate closings.

Many buyers and sellers often wonder what a real estate closing attorney does other than conduct the closing. Well, quite a bit of work actually.

The closing attorney acts as the “quarterback” of the closing process, performing many time consuming tasks preparing a transaction from intake to closing. Important note: many borrowers don’t realize that they may request to select their own closing attorney instead of the bank attorney. The new RESPA rules which went into effect on January 1 encourage lenders to allow borrowers to select from a list of attorneys or their own personal attorney. This will most often save you several hundred dollars because you won’t have to hire a separate attorney to review/negotiate the purchase and sale agreement.

Intake/Title Examination

When the title order arrives from the lender, the closing attorney first orders a municipal lien certificate, which verifies the real estate taxes and other municipal charges on the property. Insurance binders and payoffs of mortgages are also ordered.

The closing attorney is responsible for examining the title to the property. For purchases, the title is researched going back 50 years. The closing attorney carefully reviews the title examination to ensure there are no title defects; if there are any issues, the attorney will work with all parties to resolve them. Some title defects are extremely difficult to resolve. (By law, the closing attorney must provide new home buyers with a certification of title).

Title Insurance

The closing attorney also coordinates the issuance of title insurance to the lender and the new home buyer. I always recommend that buyers obtain their own title insurance policies because even with the most accurate title examination, there can be hidden title defects that could derail a later sale or refinance. Look no further than the Land Court Ibanez foreclosure mess for what can happen when you don’t get an owner’s title policy.

The Closing

As the closing day approaches, the closing attorney will coordinate with the lender for the preparation and delivery of numerous documents to be signed at closing, including the mortgage, promissory note, truth in lender disclosures, and most importantly, the HUD-1 Settlement Statement. The closing attorney will also coordinate with the seller to receive the deed to the property, final utility bills, smoke detector/CO2 certificates and condominium 6(d) certificates. As outlined in the Settlement Statement, the closing attorney is responsible for handling a number of issues at closing:

  • Payoff and discharge of mortgages
  • Payment and allocation of real estate taxes and utilities (water, oil, etc.)
  • Payment of realtor commissions
  • Disclosure and payment of lender fees and closing costs
  • Funding of mortgage escrow account
  • Payment of transfer taxes and recording fees
  • Payment of pre-paid interest
  • Distribution of sale proceeds
  • Title V septic certification and condominium 6(d) certification

The closing attorney then conducts the closing. He will explain the numerous loan and closing documents signed by buyer and seller, collect and distribute all funds, and otherwise ensure that the closing is properly conducted.

Post Closing

After the closing, the attorney processes the loan funding, performs a title rundown to ensure there are no changes in the title, then records the deed, mortgage and other recordable instruments. The attorney will also ensure that all paid off mortgages and liens are discharged. Title insurance policies are issues several weeks after the closing.

Seller Attorney Responsibilities

Customarily, a seller’s attorney in Massachusetts has the following responsibilities:

  • Generate the first draft of the purchase and sale agreement
  • Order mortgage payoff statements
  • Assistance with any title clearing efforts such as obtaining old mortgage discharges, death certificates
  • Draft the quitclaim deed and power of attorney
  • Prepare trustee’s certificate
  • Obtain condominium 6d certificate, smoke detector certification, final water/sewer readings (Realtor typically will obtain these as well)
  • Representation of seller at closing

We are experienced Massachusetts real estate closing attorneys. Please contact us if you need legal assistance with your purchase, sale or refinance transaction.

 

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