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Some Legal Basics:
Lets get you up to speed on a few basics in Massachusetts and the different
methods of ownership.
Deeds:
Real estate is conveyed using a Deed. When you buy a property, the Registry of Deeds in your county takes the deed and records it (constructive notice), then scans it into their database and mails you back the original. The original doesn't really maintain any value. The reason is when sell the property, you are going to have to create a new deed to convey your right, title, and interest in the property to the new buyer. So don't fret if you misplaced your deed, you can always get a copy by going on line at the registry of deeds web site easy enough.
Types of Deeds:
The type of deed refers to the quality of the deed and the obligations that may trail the issuance of the deed on behalf of the seller or grantor. In Massachusetts we use what is called a
Quitclaim Deed.
Now a quitclaim deed in most other states means a deed where the seller is in no way guaranteeing that what they are selling you is free of defects in title. Sounds strange doesn't it. Well it is. In other states a quitclaim deed means the seller is making no representation as to the quality of the title and whether or not it is encumbered or not.
In Massachusetts however, a quitclaim deed generally means that you are being
conveyed ownership rights in a property and that the quality of the title is good and marketable and free and clear of any defects back to a period of 50 years. If a defect is discovered
during the time of ownership you generally will not have any ability to go back to the seller to have them fix any defects in the title.
Warranty and General Warranty Deeds:
Warranty deeds (used in NH and other states) are deeds where the seller warrants that the quality of the title is good, clear, and marketable and they agree to come forward and defend the ownership rights being conveyed in court if need be. This is generally considered to be the best type of deed to get because the seller agrees to defend the title for defects that occurred during and before the time they owned the property.
Limited Warrant Deed:
This is a variation of the warranty deed where the seller agrees to defend the quality of title to the property for defects discovered after they sold it to you and that occurred only during the time of ownership of the seller and not before.
Fiduciary Deeds:
In circumstances when a person that is not the legal owner and is conveying a property, a fiduciary deed is used. This could occur when someone dies and wills a property to a child under the age of 18 or when someone is selling a property to satisfy an estate.
Bargain and Sale Deeds:
These are the worst quality deeds as the seller merely claims to be the owner and is capable of selling the property but is doing so without any warranty or guarantee as to the quality or viability of title.
When you buy a property, the lawyer or seller will ask you how you want to take
title and this question has some ramifications. Outside of taking title in a LLC, corporation, partnership, syndication, trust, etc, the normal method of taking title is usually one
of the following:
Joint Tenants: Joint tenancy is when each of the owners has an
equal and undivided, percentage interest in the property and with a right of survivorship.
Joint tenants can sell their portion of ownership but it terminates the right of survivorship in the property to the new buyer. The new buyer then shares an interest with the other owners in common.
Tenants in Common:
Tenants in common is where 2 or more owners have an interest in a property but there is no right of survivorship. Each of the owners may have shares of ownership of different proportions which is spelled out on the deed. Each of the owners can will or convey their interest in the property separately from the other owners.
Joint Tenants by the Entirety:
Also sometimes referred to as Joint Tenancy with rights of survivorship. This is commonly used when a property is owned by a husband and wife. Each maintains an equal and undivided interest in the property and when one party dies, the entire interest of the decedent conveys to the other surviving owner.
Dower Rights:
Also curtsey rights. This is when a property is owned by either a husband or wife in their own name only and purchased or acquired during the time of marriage (not before). During the lifetime of the owner the other spouse has a undivided, lifetime interest in the property. So when it comes time to sell the property, the spouse must sign off on their interests. Dower refers to the wife's rights, and curtsey refers to the husbands rights.
We always recommend that you consult with an attorney if you feel the need when
buying, selling, or leasing or renting a property.
If you have questions about selling your home or would like a free assessment of
your properties value, why not give us a call. The service is free and there is never an obligation. Call today. Contact Us
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