If you’re buying or selling residential real estate in MA, you’re likely going to be seeing an American Land Title Association (or ALTA) settlement statement. Its purpose is to explain all of the money transferring hands in your transaction in the form of direct payments, loans, and adjustments. Everything is separated between the borrower/buyer and seller in different sections with labels on each column and row.
Pay special attention to loan fees and impound charges (aka escrows) which exist to approve the buyer and protect the lender, respectively.
Don’t forget there are charges associated with selling! Check out our more in-depth video on this topic, linked in the video above.
If you have any further questions about ALTA settlement statements or other documents, contact Stiles Law by calling (781) 319-1900
When co-owners of real estate cannot agree on when or how to sell their property, each of the co-owners are entitled to petition for partition. A petition to partition is a lawsuit which asks a court to order the sale or division of the property. “Any person, except a tenant by the entirety, owning a present undivided legal estate in land […], shall be entitled to have partition in the manner hereinafter provided.” M.G.L. c. 241 § 1. A beneficiary of a trust, a shareholder of a corporation, or member of an limited liability company are not entitled to partition. See e.g. Minkin v. Commissioner of Revenue, 425 Mass. 174, 180 (1997). The probate courts and the land court has concurrent jurisdiction of all petitions for partition. M.G.L. c. 241 § 2.
The petitioner may request the sale or division of the subject real estate. Sale may only be ordered if the court finds that the land cannot be divided advantageously. M.G.L. c. 241 § 31. If the court orders sale, the land will be sold at public auction unless the court finds that the interests of all parties will be served by a private sale. Id.
After the petition is filed and the court has determined that the petitioner is entitled to partition, the court will enter an interlocutory decree that partition be made. Id. at § 10. After the decree issues, a warrant is issued to a disinterested commissioner. Id. at § 12. Once the commissioner’s return is confirmed, a final decree enters. The final decree is recorded at the registry of deeds and the decree has the effect of transferring the property. In a partition by sale, a deed is delivered by the commissioner which transfers the property.
The court will address other matters related to the partition. For instance, accounting issues including the expenses of the partition proceedings, including: counsel’s fees, fees for the commissioners, title exams, and preparation of plan. Fees and expenses will be shared by all co-owners in proportion of their interests.
While petitions for partition are common, it is less common that the entire process is completed. The added expenses which include attorney’s fees, commissioner’s fees, and the potential for below market sale prices convince most parties to agree to a sale prior to a final decree. If you are the co-owner of real estate and want to explore your right to a partition, contact Benjamin Cote to set an appointment.
Have you heard of opportunity zones? The Tax Cuts and Jobs Act of 2017 created an incentive for investors with capital gains to give back to a community in need. Click to see the map.
For example, if someone has stock investment gains and wants to sell, we call this capital gains. If they invest their stock “winnings,” if you will, into a qualified opportunity fund to invest in a neighborhood located within the qualified opportunity zone, they can get a tax break on their gains.
Watch the video to learn more about deferring and reducing the taxes on these types of investments and how they differ from 1031 like-kind exchanges.
If taken advantage of properly, in partnership with the government, an investor can direct funds into real estate or businesses in opportunity zones to create jobs, opportunities, and housing. The more success the investment has, the more the investor benefits. If you have any questions about opportunity zones and how to invest wisely, contact us by calling (781) 319-1900.
Recently. the governor signed legislation in hopes to even the playing field between hotels and short-term rentals. This change is directly affecting investors who have bought multiple condo units to then rent out through AirBnB. Through these multiple purchases, these investors have created a sort of virtual hotel where they have been able to run a central office anywhere, regardless of where their units may be. Despite running their virtual hotel, they have not been paying the same fees and taxes as a traditional hotel. This legislation is aimed to address this issue in hopes to achieve fairness across the board.
Recently, in Boston specifically, Mayor Marty Walsh, signed a bill that pulled back the ability to enter short term rentals. AirBnB initially was unhappy with this, and a lawsuit ensued. Since the lawsuit has been resolved, AirBnB is now enforcing that measure. Ultimately, the new law requires that a person who owns a short-term rental will be restricted to only hosting through their primary residence. AirBnB is now compliant with the city, so if an individual has a property that is not registered with the city, the application will not list it on the AirBnB website.
The restrictions are as follows:
1. If you own a house, you are able to rent out a room of your primary residence.
2. If you own a house and you are going away and during that period you would like to rent out your home, you are able to do this.
3. If you own a two/three family, you are able to rent it out, but are limited to only renting out one of the units. 4. You can only be a host for one property in the city of Boston.
These changes are meant to address Boston’s shortage of apartments to rent. Long-term rental properties are now returning to the market. 2,000-2,300 units are now open for long-term rental, so while this may be detrimental to some investors, it has led to opportunities for others to buy condos.
If you have any questions about renting or purchasing a condominium, contact Stiles Law by calling (781) 319-1900.
Another question came in from a viewer asking: “I have a friend who is also a neighbor who would like to purchase a portion of our land, can we even do that?”
The simple answer is that it depends, but more than likely you will be able to. There are a few things you’ll want to think about first. The first question you will need answered is if giving or selling this portion of land will put you in a non-conforming status. You’ll want to confirm with your building inspector that you will remain in conformity with your town zoning bylaws.
You also need to take your mortgage into consideration. If you have a mortgage on your property and you sell your land to your neighbor, that land will need to be in compliance with your lender. You will have to get a partial release of that mortgage which will allow a parcel to be excluded from the mortgage contract.
Something else you will want to think about is granting an easement. An easement is the right to use land you don’t own. Regardless, you’re going to want to gain the services of a licensed engineer, a professional to gather measurements and map everything out so that you are able to have these documents recorded properly with the registry of deeds.
Your last option in this situation could potentially be a land swap. If it is at equal value you can do it without money being exchanged. This still requires a land surveyor, who would measure it out and create new parcels. Once created you would then trade those through the quitclaim deeds and then record them at the registry of deeds.
If you have any questions about selling your land or taken part in a land swap, contact Stiles Law by calling (781) 319-1900.
There is a case that came down that is relevant to the process of conducting a foreclosure. Thompson v. JPMorgan Chase Bank, N.A., No. 18-1559, 2019 WL 493164 (1st Cir. Feb. 8, 2019). In short, lenders and servicers were not using the precise language of the default provision in the mortgage when notifying borrowers of their impending foreclosure. The United States First Circuit Court of Appeals ruled that Massachusetts law required “strict compliance” when a lender exercises its right to foreclose. Id. citing Pinti v. Emigrant Mortg. Co., 472 Mass. 226 (2015). So what does that mean for the buyer or subsequent owner of a foreclosed property?
If you are buying a bank-owned property, before spending any money, confirm with the bank if they are compliant with Thompson v. JP Morgan Chase. Your attorney and title insurance underwriter will review the notices that were sent against the default provision contained in the mortgage. If the notice is not identical, the foreclosure may be deemed invalid. If the lender has complied with the requirements of Thompson, then the transaction will proceed as an ordinary bank-owned purchase.
Overall, It is clear that Thompson is a case where if you are looking to buy a bank-owned property it slows the process down quite a bit. With that, it halted a lot of purchases. If a closing was derailed because of Thompson, we can help you. Call us at Stiles.
\If you have any questions about buying a bank-owned property, contact Stiles Law by calling (781) 319-1900.