Counsel Question and Answers
Articles from The Massachusetts Focus
Newsletter of Stewart Title Guaranty Company, Massachusetts Offices
Spring 2002, Volume 1, Number 1
Counsel Question and Answers
by Richard Urban, Vice President and Massachusetts State Counsel
and Gregory J. Donovan, Agency Account Manager
Question: Record title to my property was once in the name of a husband and wife, tenants by the entirety. The married couple then divorced and, pursuant to a filed separation agreement, the husband conveyed title to the wife. Pursuant to additional terms of the agreement, the wife granted the husband a mortgage which was recorded simultaneously with the deed. The agreement defines the circumstances under which the wife must pay back the husband. It also nominates an attorney to act as a "Master" for purposes of discharging the mortgage in the event that the husband refuses to do so. The wife is attempting to refinance the property in order to fulfill her obligations under the agreement but the husband refuses to cooperate. I've been asked to go forward with the refinance nonetheless and accept a discharge executed by the "Master." Is this appropriate?
Answer: Accepting a discharge from a "Master" without further ado will not be effective. However, adopting a hybrid response and conceptually satisfying the language of the agreement should prove satisfactory. Rule 70 of the Domestic Relations Rules of Procedure is identical to its Civil Rules counterpart, which states, in pertinent part, as follows:
Rule 70. JUDGMENT FOR SPECIFIC ACTS; VESTING TITLE
If a judgment directs a party to execute a conveyance of land or to deliver deeds or other instruments or to perform any other specific act and the party fails to comply within the time specified, the court may direct the act to be done at the cost of the disobedient party by some other person appointed by the court and the act when so done has like effect as if done by the party. (Emphasis added.)
In other words, the wife must first obtain a judgment compelling the husband to execute a discharge within a specified period of time. If the husband then fails to act pursuant to the judgment, a separate motion may be filed seeking the appointment of a "Master" for the purpose of executing a discharge of the mortgage. The appointed Master may then execute the subject discharge consistent with the terms of the separation agreement. All of the court papers that are filed should provide sufficient detail and reference to remove any ambiguity or challenge to the process.
Question: The granting clause of the current deed reads as follows:
I, John Smith grant to myself, John Smith, for life with full power to sell, mortgage and convey, remainder to my children, Richard Smith and Julia Smith, as tenants in common and not as joint tenants.
John Smith wants to sell the property but his children will not be joining in the deed. Can John Smith unilaterally sell the property without an accompanying release from the remainderpersons?
Answer: Yes he can. Park's, Mass. Practice, succinctly summarizes this ability whose critical feature is the retained power to sell:
A power of sale in the life tenant does not render the remainder contingent. A remainder after a life estate is nonetheless vested because subject to being defeated by the exercise of a power to sale if, apart from the existence of the power, it would be a vested remainder. Such a remainder is a vested remainder subject to being divested by the exercise of the power rather than a contingent remainder." (See Massachusetts Practice, Real Estate Law, Park, Volume 28, Section 124.)
Thus, a deed may be accepted from only the life tenant, but one must ensure that the retained power of sale is being exercised in order to convey fee simple to any successor.
Question: My title search of the property has disclosed an attachment against the homeowner who is trying to refinance. After I informed her of this issue and the need to resolve the attachment, she produced a discharge executed by a deputy sheriff. Is this a valid means to release an attachment?
Answer: As you know, there are a variety of ways to discharge or dissolve an attachment and a good summary of them is provided in Title Standard No. 49. The particular methodology in your case is supported by subsection (4) of the Standard which states that a real estate attachment is discharged or dissolved by:
[T]he deposit with the attaching officer of a sum of money equal to the amount of the attachment authorized by the court; . . .
This observation, in turn, originates from G.L.c. 223, §128, which states:
A defendant may dissolve an attachment by depositing with the attaching officer an amount of money equal at least to the amount of the attachment, which the officer shall hold in place of the property attached and which shall be subject to be disposed of in the same manner.
Consequently, a discharge of an attachment from the sheriff's office that filed the original attachment can work.
Editor's footnote: The discharge which was obtained was executed by a deputy sheriff and provided very precise detail for the attachment itself. However, it failed to acknowledge any deposit of monies by the borrower with the sheriff's office nor did it incorporate or make any reference to the above statute as a source of authority for the execution of the attachment. The officer's explanation for the use of this form was simply "We've done hundreds and hundreds of them this way and that's the way we've always done them." The Comment Section of the Title Standard suggests that recording the officer's receipt is sufficient evidence of the deposit of money. However, the sheriff's office was found to be intransigent and could not be persuaded to provide a revised form or any additional information above and beyond the executed discharge. However, we were able to obtain a copy of the borrower's check and the receipt that the sheriff's office provided her at the time of her original tender of deposit monies. With these additional materials in hand, we were able to issue a loan policy of title insurance which took no exception for the attachment.
Question: My primary residence is held in trust. May I still enjoy the benefits of recording a Declaration of Homestead?
Answer: The Declaration of Homestead statute (G.L.c. 188) states that an owner includes a sole owner, joint tenant, tenant by the entirety or tenant in common and makes no provision for property held in trust for the benefit of the settlor who makes the property his or her principal residence. The Massachusetts Appellate case on point is Assistant Recorder of North Registry Dist. of Bristol County v. Spinelli (1995) 38 Mass.App.Ct. 655. Spinelli stands for the proposition that the statute authorizing declaration of homestead must be strictly construed and contemplates that benefits of homestead declaration extend only to owner and owner's family, if any. The court stated, "Spinelli, having elected to place the property in trust, is not entitled to the protection afforded by a declaration of homestead, either as trustee . . . or as the occupant. . . . Her decision to separate legal and equitable ownership of the property affords her the protection provided in the . . . trust . . . but it renders her ineligible for the protection afforded by a declaration of homestead." Id. at 659-660.
Question: I am preparing a Stewart Lender's Title Policy and notice that there is a Declaration of Homestead on record. Should this be mentioned anywhere in the policy?
Answer: The Declaration of Homestead should be listed on Schedule B, Part II with Subordinate Matters. By statute, a primary residence is exempt from levy on execution and sale for payment of debts with one of the exceptions being for a debt contracted for the purchase of the home. Obviously, a borrower may not assert their homestead rights against a mortgagee with whom they incurred a debt in order to facilitate the purchase of the otherwise protected home. On a refinance transaction, where a Homestead may have already been filed in the past, the mortgage document almost always states that the borrower waives or subordinates any of his or her rights of Homestead with regard to the debt incurred on that particular transaction.
Question: When we purchased our primary residence we immediately recorded at Declaration of Homestead. We are now refinancing the property. Do we need to file a new Declaration of Homestead when we refinance?
Answer: No. As mentioned above, a new mortgage would subordinate or release the mortgagor's Declaration of Homestead rights with respect to the mortgagee, but does not terminate the owner's rights so that the owner would have to file a new Declaration of Homestead every time the property is refinanced. In a mortgage of real estate, the only effect of a release by the mortgagor and his wife of all right of homestead in the mortgaged premises is to subject the homestead, together with the residue of the estate, to payment of the mortgage debt. Swan v. Stephens (1868) 99 Mass. 7. A Declaration of Homestead may only be terminated in two ways: by a deed conveying the property signed by the owner and owner's spouse, if any, which does not specifically reserve the homestead, or by a release filed at the registry. See G.L.c. 188 §7.