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.

Friday, May 02, 2014

Electronic Recording Statistics

With all Registries of Deeds in Massachusetts expected to begin offering electronic recording as an option by July 1, 2014 or shortly thereafter, that technology should gain increased attention in the coming months.  We've accepted electronic recordings since 2005 so it is standard operating procedure here in Northern Middlesex. 

For the first four months of 2014, 36% of the documents recorded here came to us electronically (5489 of 15414).  The monthly statistics show a slight increase in April.  Here they are:

January - 35% electronic recording (1373 or 3919)
February - 33% electronic recording (1126 of 3382)
March - 34% electronic recording (1307 of 3886)
April - 40% electronic recording (1683 of 4227)

Thursday, May 01, 2014

April recording statistics

The statistical malaise in the real estate market continued through April with the overall number of documents recorded down by 30% from April of 2013.  Deeds were down 15%, declining from 582 in April 2013 to 497 in April 2014; mortgages were down 48%, declining from 1290 to 669; foreclosure deeds were down 26%, declining from 19 to 14; but orders of notice were up 41%, rising from 27 to 38.

While the year-to-year comparisons show a decline in recordings, month-to-month statistics in 2014 show that April was slightly up in most categories.  For overall documents recorded, it was the first month in 2014 that exceeded 4000 (we recorded 4227 with January at 3919 being the next busiest).  Also, it was the first time that the number of mortgages recorded in the month exceeded 600 - 669 to be exact with March's 593 the next busiest mortgage month.  The number of deeds recorded has been more consistent - consistently low, unfortunately.  One troublesome sign is the spike in the number of orders of notice which signal the start of a new foreclosure proceeding.  In April there were 38 orders of notice while March had 19, February had 25, and January had just 14.