Title Standard Spotlight
Articles from The Massachusetts Focus
Newsletter of Stewart Title Guaranty Company, Massachusetts Offices
Summer 2005, Volume 4, Number 3
Title Standard Spotlight
by Ward P. Graham, New England Division Counsel
In this issue of The Massachusetts Focus, we are going to supplement a previous spotlight article on Massachusetts Tax Liens. Two issues ago, we discussed certain aspects of REBA Title Standard No. 55, Massachusetts Tax Liens (Recorded). That article discussed recent statutory developments affecting the lien period of Massachusetts Tax Liens, which was increased from six years to ten years, as well as recent case law establishing that the general state tax lien under G.L.c. 62C, §50 attaches to after-acquired property  This article will supplement that discussion and address those two issues (lien period and attachment to after-acquired) in the context of the Child Support Enforcement statute, G.L.c. 119A, §6, which is not addressed in Title Standard No. 55.
Child Support Liens Generally
Pursuant to G.L.c. 119A, §1, the Department of Revenue has created the Child Support Enforcement Division (hereinafter, “the Division”) as the so-called “IV-D agency” given the task and powers to enforce the provisions of c. 119A. Under c. 119A, §6(a), the Division is given the authority “to institute collection procedures for all arrearages which have accrued against child support payments owed pursuant to a court judgment or support order, or an order from a IV-D agency of competent jurisdiction.” Among the many collection procedures referred to in §6(a) are the “use of lien, levy and seizure as provided in subsection (b)” and “attachment of or lien against property.” In addition, the Division “is further authorized, in cases where there is a support arrearage, to secure assets to satisfy the arrearage by [among other procedures] . . . imposing liens in accordance with this section and, in appropriate cases, forcing sale of any real or personal property and distribution of proceeds.” Pursuant to this authority, §6(b) discusses the specific procedures for filing notices of Child Support Liens at the Registries of Deeds (or Registry Districts of the Land Court) as well as the effect of such filings in terms of the creation, duration and relative priorities of these liens vis a vis the child support obligor and purchasers, mortgagees and other lienholders. In this regard, it is the concept of “perfection” introduced in subparagraph (b)(3) that is most important in recognizing the difference between the operation of the tax lien provisions of G.L.c. 62C, §50, and the child support lien provisions of c. 119A, §6.
When a Child Support Lien Arises
Subparagraph (b)(1) of c. 119A, §6 establishes that an unpaid child support obligation “shall, as of the date on which it was due, be a lien in favor of the obligee in an amount sufficient to satisfy unpaid child support, whether the amount due is a fixed sum or is accruing periodically.” [Emphasis added.] Thus, right from the beginning it is important to note for purposes of dealing with a Child Support Lien that the lien arises when support payment is due, not when the lien is assessed as in the case of tax liens under c. 62C, §50. Also, the Child Support Lien is an ongoing one and applies to arrearages that can continue to accrue beyond whatever amount originally triggered the lien or the amount that may appear in a recorded notice of the lien. Lest there be any doubt, this observation is emphasized two sentences later in subparagraph (b)(1), where it provides, “Such lien shall incorporate any unpaid child support which may accrue in the future and shall not terminate except as provided in subparagraph (5).”
Property Interests Affected, Including After-Acquired Property
Subparagraph (b)(1) next addresses the issues of what kind of property interests the lien attaches to and whether the lien attaches to after-acquired property. It addresses these two issues as follows:
Upon recordation or registration in accordance with subparagraph (3), such lien shall encumber all tangible and intangible property, whether real or personal, and any interest in property, whether legal or equitable, belonging to the obligor. An interest in property acquired by the obligor after the child support lien arises shall be subject to such lien, subject to the limitations provided in subparagraphs (3) and (5). [Emphasis added.]
Under this provision, just about any interest in real property you are likely to encounter in your conveyancing practice is potentially subject to the lien. That is not really something new and it is essentially the same as under the general tax lien provisions of c. 62C, §50, although the statutory language is somewhat different. As to after-acquired property, however, the difference between c. 62C, §50 and c. 119A, §6, is that the application of the lien to after-acquired property is explicit under §6(b)(1), whereas the language of §50 had to be interpreted by the Luchini court to come to the same result. Thus, one of the cautions we noted in the previous article on Title Standard 55 discussing the general state tax lien under §50 is equally applicable here and that is to make sure your titles are being run back for purchasers as well as sellers looking for filed notices of Child Support Liens as much as for other types of state and federal tax liens that can affect after-acquired property.
Recording a Notice of Child Support Lien
In regard to the filing of notices of a Child Support Lien, subparagraph (b)(3) of §6 provides that the Division “shall file notice of a lien with respect to real property in the registry of deeds or registry district for any county or registry district in the commonwealth where the obligor owns property, or in any other registry of deeds or registry district in the county where the obligor resides and may file such notice in any other registry of deeds or registry district in the commonwealth.” In terms of our being able to identify the true obligor, subparagraph (b)(3) also provides that “[t]he social security number of the obligor shall be noted on the notice of the lien.” Thus, if you have any question about whether a notice of Child Support Lien found of record applies to a party to your transaction (whether seller or buyer), this information can be of great help in verifying or excluding application to your party.
“Perfection” of a Child Support Lien
The next few sentences of subparagraph (b)(3) discuss the concept of “perfection” that puts an important twist on the lien priority and lien duration issues associated with Child Support Liens. This portion of subparagraph (b)(3) provides:
The filing shall operate to perfect a lien when duly recorded and indexed in the grantor index or when registered, as the case may be, as to any interest in real property owned by the obligor that is located in the county or registry district where the lien is recorded or registered. A special index for liens created under this chapter shall be maintained in each registry of deeds or registry district. If the obligor subsequently acquires an interest in real property, the lien shall be perfected upon the recording or registering of the instrument by which such interest is obtained in the registry of deeds or registry district in the county or registry district where the notice of the lien was filed within six years prior thereto. A child support lien shall be perfected as to real property when both the notice thereof and a deed or other instrument in the name of the obligor are on file in the registry of deeds or registry district for the county or registry district where the obligor owns property without respect to whether the lien or the deed or other instrument was recorded or registered first. . . . The perfected lien shall not be subordinate to any recorded lien except a lien that has been perfected before the date on which the child support lien was perfected; provided, however, that the [Division] may, upon request of the obligor, subordinate the child support lien to a subsequently perfected mortgage. To assist in the collection of a debt by the [Division], the [Division] may disclose the name of an obligor against whom a lien has arisen and other identifying information including the existence of the lien and the amount of the outstanding obligation. [Emphasis added.]
It is clear from the text of this portion of the statute that the concept of “perfection” goes beyond “recording” or “filing” when it comes to determining lien priority as well as whether the lien has expired due to lapse of time under §6(b)(5). In case we didn’t get it the first time around, this portion of the statute states again that the lien will attach to after-acquired property. However, the important twist here is that the lien is not “perfected” unless and until the support obligor has or acquires an interest in real property within the county or registry district where the notice of lien is filed or recorded. Thus, the statutory time period for the life of a Child Support Lien under §6(b)(5) (to be discussed shortly) does not begin to run at the time of recording of the notice of lien but rather from the time of its “perfection,” which, in the case of property acquired after the notice of lien is filed, is when the “deed or other instrument by which such interest [in the property] is obtained” is recorded or filed.
The other important twist under §6(b)(3) with which to be concerned is the provision that, unless otherwise subordinated by the Division, the Child Support Lien “shall not be subordinate to any recorded lien except a lien that has been perfected before the date on which the child support lien was perfected.” Notice that, unlike the general tax lien provisions of c. 62C, §50, there is no protection afforded here to even good-faith purchase-money mortgagees of property acquired by the support obligor after the “perfection” of the Child Support Lien.
Duration of a Child Support Lien
Not surprisingly, the first sentence of c. 119A, §6(b)(5), tells us that the Child Support Lien “shall expire upon either termination of a current child support obligation and payment in full of unpaid child support, or upon release of the lien by the [Division].” Certainly, there is no problem if the seller or borrower in a real estate transaction can obtain and record a release of the lien from the Division. Establishing that the support obligation has otherwise been terminated or satisfied is somewhat trickier, but one would assume that, if you can prove termination or satisfaction of the obligation or the Division is already aware of it, then you should be able to induce the Division to provide a release. However, pursuing a release becomes moot, of course, if the lien has already expired. The remainder of subparagraph (5) discusses when that happens and it is here where the concept of “perfection” of the lien becomes especially important in making that determination.
The remainder of subparagraph (5) provides:
In any event, a lien under this chapter shall expire six years from the date on which such lien was first perfected; provided, however, that such lien may be extended for additional periods of six years each by recording or registering, within the one year next before the expiration of the unexpired lien, a further notice of the lien, as provided in subparagraph (3), without affecting the priority of such lien. Expiration of the lien shall not terminate the underlying order or judgment of child support. The [Division] may issue a full or partial waiver of any lien imposed under this section. Such waiver or release shall be conclusive evidence that the lien upon the property covered by the waiver or release is extinguished. [Emphasis added.]
The last three sentences are fairly straightforward and need not be discussed further. It is the first sentence, including the proviso, that is important to keep in mind when analyzing whether a Child Support Lien under a notice found in your title examination is still effective.
The basic premise is that the lien will expire six years from the date on which the lien was “first perfected.” As alluded to in the discussion of subparagraph (3), “perfection” occurs either (1) when the notice of lien is recorded or filed (if the obligor owns an interest in real estate in that county at that time) or (2) upon the recording or filing of the deed or other instrument by which the support obligor acquires property after the notice of lien was filed but within six years of the filing of the notice. Accordingly, unlike the general state tax lien or federal tax lien where the commencement date of the lien period is the date of assessment, the six-year lien period for Child Support Liens does not begin until the lien is “perfected.” If the support obligor does not own property in the county at the time the notice of lien is filed, then, in effect, the lien hibernates for six years waiting to be awakened and to pounce on some after-acquired real property interest of the obligor once the deed or other instrument creating the interest is recorded or filed in the same registry. Theoretically, therefore, even without the filing of an extension as authorized by the proviso in subparagraph (5), a Child Support Lien could last for up to eleven (11) years, eleven (11) months and thirty (30) days. With an extension filed within the last year of such period, you can tack another six years on top of that and so on and so on.
It was not too long ago that it was rare to find a Notice of Child Support Lien filed in the chain of title to real estate. That is no longer the case. We are seeing more and more of these pop up in title examinations. Worse yet, though, we are seeing more and more of these turn into claims under title insurance policies because some title examiners and conveyancers have not been aware that these liens attach to after-acquired property, that there is no automatic subordination of the after-acquired property lien to a purchase money mortgage and that these liens do not expire six years after recording but rather six years after “perfection” (unless extended).
It is hoped that this article will help with a better understanding of how this lien statute operates and how it differs from the operation of other tax lien statutes more commonly encountered in real estate transactions. Having this background available may also help you in discussing an issue involving this type of lien with someone who is not as familiar with the intricate provisions of the statute as you. As always, though, if you have any question about these issues or a particular situation you encounter involving these issues, feel free to contact any of the underwriting counsel here at Stewart Title to discuss the matter.
1 See the Winter, 2005 (Vol. 4, No. 1) issue of The Massachusetts Focus. [Back to Text]
2 G.L.c. 62C, §50(a), as amended by St. 2004, c. 262, §26. [Back to Text]
3 Luchini v. Commissioner of Revenue, 436 Mass. 403, 764 N.E.2d 870 (2002) [Back to Text]
4 This term is drawn from Title IV, Part D of the Social Security Act, 42 U.S.C. §651, et seq., and is used throughout c. 119A. [Back to Text]
5 The creation and designation of the Child Support Enforcement Division for this purpose is also discussed in 830 CMR §119A.6.1, dealing with assessment of interest and penalties on past-due child support. [Back to Text]
6 Subparagraph (5) of §6(b) is the provision discussing the duration of the child support lien, which will be discussed a little bit later in this article. [Back to Text]
7 Under c. 62C, §50(a), the general state tax lien arises at the time of assessment or demand for payment of the unpaid tax (together with interest, penalties and other statutory additions) and “attaches to all property and rights to property, whether real or personal, belonging to such [taxpayer].” [Back to Text]
8 See, Luchini v. Commissioner of Revenue, fn. 2, supra. The relevant portion of §50 discussed by the court is found also in subsection (a) and provides that the general state tax lien “ shall continue until the liability for the amount assessed or deemed to be assessed is satisfied.” It is the continuing nature of the lien that the court looked at in applying the lien to after-acquired property as the federal courts had done in the past based on similar language in the federal tax lien statute, 26 USC §6322. [Back to Text]
9 Under c. 62C, §50(c), “[e]ven though notice of a lien provided in this section has been filed in the manner prescribed in subsection (b), the lien shall not be valid with respect to a security, as hereinafter defined, as against any mortgagee, pledgee or purchaser of such security, for an adequate and full consideration in money or money's worth, if at the time of such mortgage, pledge or purchase such mortgagee, pledgee, or purchaser is without notice or knowledge of the existence of such lien.” [Definition of “security interest” omitted.] Thus, under §50(c), an “innocent” mortgagee who didn’t know about (i.e., the title examiner missed) a notice of tax lien previously filed under §50(b) may still be able to maintain lien priority over the tax lien if the mortgagee’s lack of knowledge (one assumes “good faith” here) can be established to the satisfaction of the Department of Revenue or, in the worst case, a court. This same possibility does not expressly exist under c. 119A, §6. [Back to Text]