Monday, July 28, 2014

Why you should hire a lawyer to create a deed

Almost every day a customer comes to the registry of deeds and announces "I want to add a name to my deed."  When we reply "you should hire a lawyer to do it." At that, many become indignant.  We explain that there are no blank forms of deeds available and that there are many variables and details that go into creating a new deed so while anyone could conceivably do it, we strongly recommend against it.

Today I came across an example of why it's inadvisable to start one's legal draftsmanship career with a deed.  The particular deed I saw conveyed the property to "John Smith and Mary Smith as husband and wife."  That was it.  There was no "tenants by the entirety."  Fortunately, the couple had conveyed away the property while both were still alive because that deed would have created a tenancy in common.  (Simply identifying the parties as "husband and wife" means nothing without the "tenants by the entirety" language).  Had one of the spouses passed away while still owning the property under that deed, the decedent's half of the property would have passed through his or her estate and not to the surviving co-owner.

Friday, July 25, 2014

Flood Insurance Premium Relief

Governor Patrick signed a new law yesterday that provides some potential relief to people who own homes in flood zones.  Previously, lenders could and often did require homeowners to obtain flood insurance for the entire value of the property.  This new law, however, gives the homeowner the option of obtaining flood insurance only in the outstanding amount of the mortgage.  For example, if someone owns a home that's worth $200,000 but only owes $100,000, that person can opt to obtain only $100,000 in flood insurance.  Of course, if the house is destroyed by flood, the homeowner's equity would vanish, but when the alternative is flood insurance premiums so high that people are driven to foreclosure, many will be willing to take that risk.  More information about this new law is available in this story from the Patriot Ledger. 

Thursday, July 24, 2014

Two way traffic coming to downtown Lowell

This August the traffic pattern in downtown Lowell will undergo a big change.  The web of one way streets that have been in place for a half century will become two way.  The streets involved in this transition are as follows:

Central Street from Market to Merrimack which is currently one way heading towards Merrimack will become two way;

Merrimack Street from Prescott to Dutton which is currently one way heading towards City Hall will be two way;

Shattuck Street which runs from Merrimack to Market and is one way heading towards Market will be two way;

Market Street from Shattuck to Central which is one way heading towards Central will be two way. 

Dutton Street will remain two way and Middle and Palmer Street will remain one way as will Prescott Street. 

There will be new lane markings, cross walks, "no left/right turn" signs, and new parking regulations.  It will take a while for those who have known only the current system to get used to these changes and their consequences.  There are several reasons the change is being made.  One is to make navigating downtown Lowell easier and more direct; two is to calm traffic and thereby promote pedestrian activity; and three is that research has shown that retail districts do better with two way traffic.

Wednesday, July 23, 2014

Condo Docs

Today's Globe business page has a story about a bill pending in the legislature that would create financial incentives for condominium associations to quickly get condo owners copies of paperwork related to the operation of the condominium such as insurance policies and budgets when requested.  The bill seems to be in response to complaints that delays by associations (or by the management companies employed by associations) create major inconveniences and sometimes financial losses for owners trying to sell or refinance their units.

I'm not aware of the particulars of the bill but it's long been apparent from here at the registry of deeds that many condo associations have difficulty keeping up with the requirements imposed on them by law.  This is particularly true of smaller condo developments which lack the scale needed to make the employment of a management company affordable.  Individual homeowners trying to run the association on their own face a real challenge.  We constantly receive calls from people seeking copies of their "condo docs."  For us, that term means the master deed that first created the condominium and the declaration of trust that created the condominium association.  These can usually be found on our website (under the name of the condominium development or association) and can be downloaded and printed from there.  These two documents, however, often exceed 100 pages combined.  Other documents that are often lacking are those tracking changes in the makeup of the condominium board.  With each change there should be a document that details the departure of the former trustee and the election/acceptance of the new trustee.  This does not seem to be done routinely and often results in a last minute scramble when such documentation is needed by someone.

I'm not sure the legislation cited in the Globe story addresses these issues.  Perhaps some type of consumer handbook for condominium owners that simplifies the legal requirements of maintaining a condominium association would be worthwhile. 

Monday, July 21, 2014

Electronic Recording Statistics

Electronic recording continues to be a major part of our operations.  Here's a month-by-month breakdown of the number of documents recorded electronically to the total number recorded by all means:

January: 1373 of 3919 documents recorded electronically (35%)
February: 1126 of 3382 documents recorded electronically (33%)
March: 1307 of 3886 documents recorded electronically (34%)
April: 1683 of 4227 documents recorded electronically (40%)
May: 1516 of 4476 documents recorded electronically (34%)
June: 1766 of 5095 documents recorded electronically (35%)

First half of 2014: 7398 of 21066 documents recorded electronically (35%)

Wednesday, July 09, 2014

Mid year statistics

With the month of June in the past we can now look at statistics for the first six months of 2014 compared to the same period in 2013.  The trends are not good.

The number of deeds recorded in the first six months of 2014 was down 8% from the number recorded in 2013 (3045 vs 3313)

The number of mortgages recorded in 2014 was down 48% from the number recorded in 2013 (3948 vs 7623)

The number of foreclosure deeds recorded in 2014 was down 20% from the number recorded in 2013 (68 vs 85).

The number of orders of notice recorded in 2014 was down 26% from the number recorded in 2013 (153 vs 207)

And the overall number of documents recorded in 2014 was down 30% from the number recorded in 2013 (24973 vs 35884).

Back to blogging

For a couple of weeks I've refrained from posting here.  It started as only a day or two that was missed but then grew.  Future posts might not come every day but I will be consistently updating this site with new posts.  Thanks for sticking with it.

Monday, May 05, 2014

Tenancy by the Entirety Election



A recent email caused me to dust off my recollection of the distinction between “old” and “new” tenancies by the entirety.  Here’s the gist of the email:

Maybe 20 or 30 years ago there was an article in the Boston Globe about a new  law which took care of the following situation: A married couple owns a house, but they were just listed as tenants in common, not tenants by entirety.  At that stage of the game, the only way to rectify the ownership would be to sell the house to a "straw", and then have the straw immediately sell the house back to the couple, by entirety.  The law was enacted to allow the couple to simply fill out a declaration with the Registry (probably similar to homestead), instead of going through the selling and buy-back.  Can you tell me the name of the form?

Here’s my answer:

I think you're mixing up two concepts related to spousal ownership of property.

The law regarding property held as Tenants by the Entirely changed significantly in 1979.  Prior to that, the wife was deemed to have no ownership interest in the property other than the expectation that she might outlive her husband and only then become the owner.  The change in 1979 modernized the concept by giving both spouses equal ownership rights in the property while both were alive while also retaining the right of survivorship.  Which law controlled depended on when the Tenancy by the Entirety had been created.  If before 1979, the old law controlled; if after, the new law controlled.  It was in that context that the legislature enacted MGL c. 209, s. 1A which allowed a married couple with a pre-1979 tenancy by the entirety to "elect" to have it treated as a post-1979 tenancy by the entirety simply by filing an "election" document at the registry of deeds.  Here's the text of the statute:

"Section 1A. Tenants by the entirety holding under a deed dated prior to February eleventh, nineteen hundred and eighty may elect to have their tenancy treated as being subject to the provisions of chapter seven hundred and twenty-seven of the acts of nineteen hundred and seventy-nine; provided, however, that such election is made in writing, identifying the real estate with reference to the book and page of the registry of deeds wherein such deed is filed. Such election shall be executed by the grantees named as tenants by the entirety on the deed who are electing to be subject to this section, duly notarized, and recorded in said registry."

The second concept you refer to is the use of a straw.  Formerly, it was not permitted for someone to transfer property to himself.  If I owned property by myself, got married, and wanted to make my spouse a co-owner of the property, I could not execute a deed from me to me and my spouse.  Instead, I had to convey the property to a straw who in turn would convey the property to me and my spouse (my property professor in law school used to joke that the grantor index at the Suffolk County Registry of Deeds made Mary Maguire look like the wealthiest land owner in Boston, but that was just because she was secretary to the busiest real estate lawyer and she was grantor on countless straw deeds). 

At some point - certainly before the mid-1980s, either the law or the practice changed and it became acceptable to convey property to yourself.  Consequently, the use of straw deeds is extremely rare these days. 

There is a statute, c.209, s.3, which does mention property transfers between spouses ("Section 3. Transfers of real and personal property between husband and wife shall be valid to the same extent as if they were sole.") but I think the evolution of conveyancing law applied to all cases and not just married couples. 

I would think that if a married couple today owned property as tenants and common and wanted to convert to tenants by the entirety, the only way to do that would be to execute a deed from themselves to themselves specifying the new tenancy.  There may be another way; I'm just not aware of it.  In any case, it's something you should hire a lawyer to do for you so that lawyer would be in the best position to provide legal advice in your case.