Deed statistics by town

Each month I compiles some statistics of recordings here at the Middlesex North Registry of Deeds. This helps us measure our volume of recordings but it also serves as an indicator of the state of the local real estate market. However, as with all quantitative analysis, unless you know exactly what is being measured, the numbers presented can be misleading.

For example, when I post something about total number of deeds recorded for the month, that almost always refers to all Recorded Land deeds and does not include Registered Land deeds. One reason for that is that registered land is a relatively small percentage of our recordings and, in most cases, are distributed evenly among the towns in the district (with the one exception being Billerica, which has a lot of registered land).

A second caveat on "number of deeds" involves the amount of consideration stated on the deed. A significant percentage of deeds recorded each month transfer property between related parties (as in a sole owner transferring to herself and her spouse; or a married couple transferring it from them as joint owners to them as trustees of a family trust). The consideration stated on these deeds is usually $1 so they can't be considered arms-length transactions.

Because I've been consistent in (1) not counting registered land deeds and (2) counting $1 deeds, the comparisons have been consistent and are able to reflect recording volume and real estate trends. Going forward, I won't change how existing reports are compiled.

However, I plan to add a new deed report into the statistical mix. This one will be done at the end of each month and will compare deed recordings for the entire year up until that point ("year to date") for the current year with the same period of the previous year. For each annual period I will show "all deeds" which will reflect Recorded and Registered Land without regard to consideration. For the same periods, I will also show the number of deeds with consideration greater than $60,000 and less than $1.2mil. These boundaries are meant to eliminate non-arms length transactions at the lower end, and properties of extraordinary value at the upper end. I will use that set of deeds and their values to calculate the median price of deeds recorded during the respective periods.

Perhaps it's best to illustrate for the period January through April for 2017 and 2018:

Billerica
All deeds: 2017 = 265; 2018 = 297; up 12%
Deeds >$60K: 2017 = 140; 2018 = 167; up 19%
Median price: 2017 = $382,500; 2018 = $392,000; up 2%

Chelmsford
All deeds: 2017 = 279; 2018 = 256; down 8%
Deeds >$60K: 2017 = 147; 2018 = 147; no change
Median price: 2017 = $335,000; 2018 = $350,000

Dracut
All deeds: 2017 = 261; 2018 = 268; up 3%
Deeds >$60K: 2017 = 160; 2018 = 177; up 11%
Median price: 2017 = $250,000; 2018 = $322,000; up 29%

Lowell
All deeds: 2017 = 638; 2018 = 620; down 3%
Deeds >$60K: 2017 = 412; 2018 = 399; down 3%
Median price: 2017 = $235,000; 2018 = $256,000; up 9%

Tewksbury
All deeds: 2017 = 235; 2018 = 224; down 5%
Deeds >$60K: 2017 = 122; 2018 = 106; down 13%
Median price: 2017 = $357,500; 2018 = $385,500

Tyngsborough
All deeds: 2017 = 106; 2018 = 83; down 22%
Deeds >$60K: 2017 = 64; 2018 = 48; down 25%
Median price: 2017 = $275,000; 2018 = $337,000; up 23%

Westford
All deeds: 2017 = 142; 2018 = 174; up 23%
Deeds >$60K: 2017 = 79; 2018 = 92; up 16%
Median price: 2017 = $407,500; 2018 = $500,000

Wilmington
All deeds: 2017 = 166; 2018 = 198; up 19%
Deeds >$60K: 2017 = 83; 2018 = 85; up 2%
Median price: 2017 = $430,000; 2018 = $484,000; up 13%

Community Preservation Act funding increase

Here's an article I wrote for this month's Merrimack Valley Housing Report about potential changes to the Community Preservation Act. 

In the fall of 2000, the Massachusetts State Legislature adopted the Community Preservation Act (CPA) to provide a mechanism and funding source for cities and towns to preserve open space, provide affordable housing, preserve historic structures, and provide recreational space. To participate in the CPA, residents of a community must choose to impose on themselves a property tax surcharge of up to 3 percent. This decision is made by voters by referendum at a municipal election. If the CPA is adopted, the community creates a Community Preservation Committee that recommends projects to the board of selectmen or city council which have the ultimate authority over the expenditure of CPA funds.

When it was first implemented, the CPA proposed a dollar for dollar state match to any funds raised locally for CPA projects. The state’s matching fund, called the Community Preservation Trust Fund, obtains its money from a surcharge imposed on documents recorded at the registry of deeds.

Almost all registry of deeds recording fees include a $20 per document Community Preservation Act surcharge. When you record a deed, for example, the total amount you pay is $125. Of that, $100 is the actual recording fee, $20 is the CPA surcharge, and $5 is a registry of deeds technology surcharge. The exceptions are municipal lien certificates, which carry a $10 per document surcharge; and declarations of homestead, which have no CPA surcharge.

As with all funds collected, the registry of deeds transfers these fees to the Department of Revenue on a daily basis. The DOR is the administrator of the CPA Trust Fund.

One of the problems with depending on registry of deeds recording fees to fund the CPA (or anything else) is that the revenue stream is tied to the real estate market. When real estate is booming, a substantial amount of revenue is collected, but when the market slows, so does the money coming in. For example, in 2003 when the Middlesex North Registry of Deeds recorded 146,956 documents, $2.8 million was collected for the Community Preservation Act. But in 2014, only 53,584 documents were recorded. That yielded just $983,000 is CPA funds.

This decline in funding for the CPA Trust has coincided with an increase in the number of communities choosing to participate in the CPA. This increased demand for matching funds has caused the match to decline from 100 percent in the early days of the CPA to matches of less than 30 percent of the amount raised by the municipality today.

To address this issue, the Massachusetts State Legislature is now considering an increase in the CPA surcharge on registry recordings from $20 to $50 per document. Whether this change (or any other) is made should be known by the end of this legislative session in June.

As for the local impact of the Community Preservation Act, eight of the ten communities in the Middlesex North Registry of Deeds district have voted to participate in CPA since its inception. Carlisle, Chelmsford, Dracut, Tyngsborough and Westford all adopted it in 2001; Dunstable and Tewksbury in 2006; and Billerica in 2016. Only Wilmington and Lowell have failed to take advantage of it. This is especially unfortunate for Lowell since the surcharge on documents recorded at the registry of deeds for properties in Lowell since 2000 has generated $5.8 million in CPA matching funds, all of which has gone to other communities.

 

REBA Spring Conference Report

Yesterday I attended the 2018 Spring Conference of the Real Estate Bar Association of Massachusetts at the Four Points Sheraton in Norwood, Massachusetts. My Register of Deeds colleague Mary Olberding (Hampshire County) and I formed a two-person panel for a breakout session on the Massachusetts Deeds Indexing Standards.

Two of the topics that dominated our discussion were acknowledgements and addresses.

Here is what we said about acknowledgements:

The Deed Indexing Standards contain a list of documents that must be acknowledged before being recorded. If a document is not on that list, it does not need to be acknowledged to be recorded.

The minimum information needed to make an acknowledgement sufficient for recording is the signature of the notary; the printed name of the notary; the expiration date of the notary’s commission; and some language that reflects that the document has been acknowledged.

Most registries will reject a document that lacks the written name of the person whose acknowledgement has been taken in the acknowledgement clause.

Most registries do not require the notary stamp to be affixed in order to record a document. (But since the notary statute requires a notary to affix his stamp when taking an acknowledgement, the notary should comply with the statute and always use the stamp).  

On a document that has multiple grantors, it is sufficient if the signature of just one grantor has been acknowledged. However, on a declaration of homestead executed by two people, both signatures must be acknowledged for the document to be recorded.

For out-of-state and out-of-country acknowledgements, registries will defer to the person recording the document to determine the adequacy of the acknowledgement. Because the law of the place where the acknowledgement is taken controls the adequacy of the acknowledgement, registries will assume compliance with the appropriate law and record the document.

Regarding out-of-state or out-of country acknowledgements, these standards use the terms “notary public” and “justice of the peace” as generic references to any public official authorized to take an acknowledgement in that jurisdiction. For example, a document acknowledged in Connecticut by a “commissioner” could be recorded in Massachusetts.

Here is what we said about addresses:

A deed must contain two addresses: the mailing address of the grantee and the address of the property being conveyed by the deed. The grantee mailing address is so the municipal tax collector will know where to send the property tax bill. The property address is so the municipal assessor can identify the property to update ownership information in assessing records.

In many cases, a deed presented for recording fails to state that property address. When confronted with this omission, the customer presenting the document for recording will hurriedly write an address in the margin of the deed. The address so written is often wrong. However, this is the address entered by the registry of deeds in the searchable index. While those in the real estate law business understand that an incorrect address does not negate the property transfer, most homeowners think it does and will become very agitated when they discover the discrepancy. To avoid an expensive fix, please make an extra effort to ensure the correct property address is clearly stated on a new deed before it reaches the registry of deeds.

Remember that most liens are indexed only by the debtor’s name, not by any property address or town. Consequently, trying to narrow a search by limiting the results to a particular city or town will exclude things like attachments and federal tax liens that are indexed with a town code of “none.”

While searching by property address can be a useful starting point, it can also be unreliable. Most registries of deeds did not consistently enter property addresses in the index until the late 1990s. Also, the registry will index an address however it appears on the document presented for recording. While a post office address may be 3-5 Main Street, one-third of the documents recorded will say 3 Main Street; another third will say 5 Main Street; and the remainder will say 3-5 Main Street. Similarly, a street with a numeric name – like 3^rd Avenue or Third Avenue – will be entered in the index in whatever way it appears in the document being recorded.