CLEARING TITLE MATTERS WHEN SELLING PROPERTY

1. Lesser known ways to obtain a clear title:

Petition for Ratification of a Doubtful Act

Sometimes an owner of real estate decides to sell his or her property and when doing so, should always retain an attorney for that process. Recently, a seller of a condominium did just the same thing, obtained a realtor and entered into a purchase and sales agreement to sell his condominium. During the course of the sale process, a title issue arose with respect to the sale of his property. As a result of the title issue, he was not able to sell the property to the buyer until the title issue was cleared and corrected.

In this case, the seller acquired the condominium from a realty trust as the realty trust was the previous recorded owner of the condominium. The beneficiary of the recorded realty trust was a family trust. Unfortunately, while there were many signed and notarized trust documents, there was no signed Schedule of Beneficiaries which is a document that is usually unrecorded. When the realty trust transferred ownership of the condominium to the seller, several documents were not properly drafted and executed. This set of facts presented several title issues preventing the sale of the property from going forward.

This case presented complicated and challenging issues for the seller’s attorney, Attorney Deborah Gold-Alexander. More importantly, after discussing the title issues with the buyer’s title insurance company attorneys and closing attorneys, there did not appear to be a consensus of the proper process to follow moving forward to fix the title issues. The seller’s attorney did not believe that the various options suggested would result in the proper remedy to clear and correct the title issues.

The seller’s attorney conducted extensive research which also required conferences with assistant registrars of the Probate Court. After much investigation, it was determined that the title issues could be cleared and corrected by the filing of a lesser known petition entitled a Petition for Ratification of a Doubtful Act. In over 30 years of practice, the seller’s attorney had not heard or known of such a petition and after discussing the matter with other colleagues, it was apparent that other attorneys had never heard of such a process. But it was this process that would appear to solve the problems.

This Petition comes into play when there is an Act by a fiduciary such as a trustee, in this case a successor trustee of the realty trust, who, along with others, executed papers previously to convey the condominium from the realty trust to the seller. The Petition for Ratification of a Doubtful Act further applies where that Act is called into question because of an irregularity, as occurred here, and further questions the authority of the successor trustee to have conveyed the deed to the seller from the realty trust in the first place.

The Petition for Ratification of a Doubtful Act was drafted, signed and filed with the Probate & Family Court by the seller’s attorney and subsequently allowed by the court. A decree was signed by the judge and could be recorded at the Registry of Deeds to clear the title. In this case, the title matters were resolved by a fairly quick process that did not require a protracted court proceeding.

It is important to retain a competent attorney for the sale of your property such as Attorney Deborah Gold-Alexander who will go the extra distance to correct such a problem in the most expeditious way.

2. Failure to State How You Take Title in a Deed When You Buy Property Can result in a Title Issue

One of the most critical and important parts of buying a property is stating how you are taking title to that property. In Massachusetts, if you are buying property with your spouse, you generally take title as Husband and Wife, Tenants by the Entirety. This way, if your husband or wife dies before you, his or her share automatically passes to you in the deed.

If you buy property with someone else (ie: a brother or sister, a friend, boyfriend or girlfriend), your options are to take title as joint tenants or tenants in common. If you take title as joint tenants and the other owner dies before you, his or her share automatically passes to you. If you take title as tenants in common and the other owner dies before you, his or her share passes to his or her family or heirs and usually a probate is required.

As you can see, taking title to property can be involved and complicated and you must have a competent attorney to assist you with buying the property and making sure that the title (or deed) is correct. You could purchase a property and live there for many years and you do not discover a title issue unless you go to sell the property. Whether through neglect or inadvertence by a closing attorney or buyer’s attorney, the deed into the buyer may not be correct and such a problem may not rear its ugly head until the time arrives to sell the property. Therefore, having competent representation at your purchase is of utmost importance.

Recently, Attorney Deborah Gold-Alexander was retained where there was a problem with a deed with respect to how the parties took title when they bought their condominium. The buyers were a married couple and they should have taken title as Husband and Wife, tenants by the entirety. Instead, their attorney for their purchase did not state in the deed how they were to take title. When there is no reference in a deed on how to take title, such as tenants by the entirety, joint tenants or tenants in common, then it is accepted that the parties took title as tenants in common. This scenario is not how a married couple would generally take title. Normally, this would not have been a problem, however, after the parties bought the condominium and lived there for many years, the husband died. Because the husband died and the property did not automatically go to the wife because it was not stated, “husband and wife, tenants by the entirety”, a title issue arose with the wife trying to sell the condominium after her husband’s death. It resulted in a probate having to be filed in court in order for the wife to be appointed her husband’s estate’s personal representative to sell the property. This was a process that resulted in delay of the sale of the property and additional legal expense to the wife and would not have had to occur had the deed been correct in the first place.

Therefore, this case shows the importance of having competent legal representation when buying a property and how taking title in a deed can have legal consequences if not done properly or at all.

Should you require legal representation when buying a property or experience a title issue with the sale of a property, you should contact Attorney Deborah Gold-Alexander to discuss representation for resolving your real estate and title issues.