Title Standard Spotlight
Articles from The Massachusetts Focus
Newsletter of Stewart Title Guaranty Company, Massachusetts Offices
Summer 2004, Volume 3, Number 3
Title Standard Spotlight
by Ward P. Graham, New England Region Counsel
In this issue of The Massachusetts Focus, we will review a relatively new title standard that helps resolve an issue that used to concern many faced with recorded complaints to enforce condominium liens. REBA Title Standard No. 69, entitled "Certificates Pursuant to G.L.c. 183A, §6(d)," was adopted on November 3, 2003.
The certificates referred to in the title standard are the condominium lien certificates issued upon request by the organization of unit owners certifying to the status of liens for common expenses and assessments on a condominium unit (hereafter, "condominium lien(s)"). The question many conveyancers used to have regarding such certificates was whether the recording of such a certificate stating that there were no unpaid common expenses or assessments (often referred to as a "clean 6(d) certificate") was sufficient to clear the record title of a condominium unit when a complaint to enforce a condominium lien against the unit had previously been recorded but no court clerk's certificate, court order or other document was recorded evidencing the dismissal or other disposition of the case establishing that the lien was dissolved.
There were, I believe, at least two schools of thought causing this concern. First, the mere fact that there was a court proceeding involved in enforcing the lien and notice of it existed of record by virtue of the filing of the complaint, many conveyancers likened this to a Lis Pendens or to any other record notice of a court action pending that could affect the title to the subject property or have to be defended by a purchaser or mortgagee and believed that it needed to be cleared in a similar manner. As will be seen momentarily, the language of G.L.c. 183A, §6(d) itself should have helped dispel that concern.
Second, since condominium liens under G.L.c. 183A, §6 are very similar in lien priority to municipal liens and the issuance of condominium lien certificates under G.L.c. 183A, §6(d) are similar to the issuance of Municipal Lien Certificates under G.L.c. 60, §23 and are equally binding on the issuing authority, when some prior document on record indicates a lien or the enforcement of a lien against the subject property, the issuance of a clean 6(d) certificate is no more binding on the organization of unit owners than a clean Municipal Lien Certificate is on a municipality.
In the latter case, however, the difference is to be found in the precise language of the respective statutes. G.L.c. 60, §23 states that a properly recorded Municipal Lien Certificate "shall operate to discharge the parcel of real estate specified from the liens for all taxes, assessments, or portions thereof, rates and charges which do not appear by said certificate to constitute liens thereon, except taxes, assessments, or portions thereof, rates and charges with respect to which there has been filed for record or registration evidence of a taking or a sale by the municipality or concerning which a statement or order creating or continuing such lien has been so filed under any provision of law, if said lien can be discharged by the recording or registration of an instrument other than a certificate under this section . . ." On the other hand, G.L.c. 183A, §6(d) provides:
A statement from the organization of unit owners setting forth the amount of unpaid common expenses and any other sums which have been assessed against a unit owner, including a statement of the amount which the organization of unit owners claims is entitled to priority with respect to any mortgage under subsection (c), shall operate to discharge the unit from any lien for other sums then unpaid when recorded in the appropriate registry of deeds; provided, however, that any statement or document issuing from an unincorporated organization of unit owners may be recorded in a registry of deeds and if so recorded shall indicate and specify therein the book and page, or document number if registered land, within such registry of the instrument from which the signatory or signatories of the statement obtained authority to sign on behalf of the unincorporated organization. The statement shall be furnished within ten business days after receipt of a written request, upon payment of a reasonable fee, and shall be binding on the organization of unit owners, the governing body of the organization of unit owners, and every unit owner; provided, however, that no fee shall be required of any mortgagee, in connection with a foreclosure of a mortgage, who has given the organization notice of its intention to foreclose a mortgage upon the unit. [Emphasis added.]
Thus, it has always been the case that there is no similar limitation on the binding character of a 6(d) certificate as there is for a Municipal Lien Certificate relative to prior recorded documents dealing with unpaid assessments not reflected in the certificate. That is no less true where a complaint has been filed to enforce a condominium lien and the copy of the complaint recorded pursuant to the procedures set forth in G.L.c. 254, §5 clearly shows that it is a condominium lien enforcement action. However, without any case law or title standard to guide conveyancers, even when a clean 6(d) certificate was obtained and recorded, many adopted the belt and suspenders approach and required the dismissal of the action and a clerk's certificate to that effect be obtained and recorded. In some cases, that requirement resulted in delayed closings and, in other cases, it jeopardized closings when the organization of unit owners refused to do so, whether because it was unnecessary, because they refused to incur the additional expense unless reimbursed or for any number of other reasons.
No longer do we need to be concerned about these issues, though. REBA has come to the rescue with Title Standard No. 69, which dispenses with these issues in simple and appropriate fashion. This title standard provides:
Title is not defective by reason of the existence on the record of a complaint to enforce a lien under M.G.L. c. 183A if there is recorded thereafter a later dated certificate of no common expenses in accordance with § 6(d) which asserts that there are no outstanding liens on the Unit.
The rationale for the title standard is also simply and appropriately stated in the Comment:
Section 6(d) provides that a statement from the organization of unit owners setting forth the amount of unpaid common expenses and other amounts which have been assessed against a unit owner "shall operate to discharge the unit from any lien for other sums then unpaid when recorded at the appropriate registry."
This should be of great help to conveyancers in resolving what has been on more than one occasion for most of us a vexing and sometimes controversial problem. It should also help put minds at ease for those of us who have relied on the plain language of §6(d) and certified or underwritten titles over recorded condominium lien enforcement complaints based on subsequently recorded "clean 6(d) certificates" without requiring dismissals and recorded clerk's certificates to deal with the complaint.
1 For example, REBA Title Standard No. 29, Dissolution of Lis Pendens, provides: A lis pendens may be dissolved by recording a certificate of the clerk of court where the action was entered or the judgment was entered stating that (1) the action has gone to final judgment in favor of the defendant or (2) the action has been discontinued, dismissed or finally disposed of as to the land in question. [Back to Text]
2 Pursuant to condominium lien enforcement provisions of the second paragraph of G.L.c. 183A, §6(c), which, in turn, require that the enforcement action shall be filed in accordance with the procedures set forth in G.L.c. 254, §5. [Back to Text]
3 Of course, this applies equally to 6(d) certificates that may not be "clean," but which do not list as unpaid expenses or assessments the unpaid expenses or assessments that were the subject of the recorded enforcement complaint. [Back to Text]