Ways To Hold Title In Massachusetts
The three most common ways two or more persons may hold title to real estate are: TENANTS IN COMMON, JOINT TENANTS or as TENANTS BY THE ENTIRETY (tenants by the entirety is only available for married couples)
What Happens Upon Death
- When title is held as Tenants in Common, it is necessary to probate the estate of the deceased before the real estate may be sold or mortgaged. There is no right of survivorship and so the deceased persons interest in the property passes to his or her heirs and not to the other owner(s).
- When the title is held a Joint Tenants or as Tenants by the Entirety, the title automatically passes to the surviving owner(s) without the necessity to probate the estate of the deceased.
- In any case of death of an owner of real estate, whether Tenants in Common, Joint Tenants or Tenants by the Entirety, it may be necessary to procure a release of the estate tax or taxes which may, by statute, become a lien on the property.
Who has Control and Management?
- When title is held as Tenants in Common or Joint Tenants, the rents, control, management and possession of the property is in the owners equally, in the absence of an agreement to the contrary, but the individuals can divest themselves of their individual share in the property without the joining in with the others.
- Under the provisions of M.G.L. c.209, section 1, when title is held as Tenants by the Entirety, (which is limited to husband and wife) rents, control, management and possession of property are in the owners equally. Chapter 209 further provides:
“…The interest of a debtor spouse in property held as tenants by the entirety shall not be subject to seizure or execution by a creditor of such debtor spouse so long as such property is the principal residence of the non-debtor spouse; provided, however, both spouses shall be liable jointly or severally for debts incurred on account of necessaries furnished to either spouse or to a member of their family.”
Neither the husband nor the wife can divest themselves of their interest in the property to any one except to each other, so long as the marriage lasts, without the signature of both.”
Why Owners Title Insurance Is A Necessity
The owner’s policy of title insurance ensures that the owner has good marketable title to the property free of any encumbrances or liens that would adversely affect the property, except those made known to the buyer, and ensures to the owner that if any such liens, encumbrances, defects or other title problems become known, the title insurer will defend the buyer’s title to the property. We strongly recommend the purchase of the title insurance for the following reasons.
First, the premium for purchase of the title insurance policy is a one-time charge. Since the purchaser is usually borrowing money to finance the purchase, the majority of the cost of the title insurance policy that the owner would receive has been paid through the premiums for the lender’s policy which is required by the loan. Usually for a few hundred dollars or less the owner can insure against a variety of problems which could occur in the future. These items include forged documents in the chain of title, signatures of mentally incompetent persons or minors which are unknown to the party reviewing the title, mistakes or inaccuracies in recording of legal documents of title at the appropriate place or recording or registration of title, fraud in the execution or in the handling of the recording or indexing of recorded documents, undisclosed or missing heirs, fraud in the execution or in the handling of a transaction in the prior chain of title, invalid divorces or misrepresentation of marital status of the parties signing the documents, and most importantly clerical errors in the public records and claims of parties unknown because their claims have not been filed in any indices of public record.
There are also enhanced policies that may be purchased that go well beyond these simple coverages and provide coverage for a host of issues such as additional protection regarding issues in zoning, building permit violations, encroachments and defects in title that can affect property both prior to and after you purchase it.
Even though the buyer may be asked to pay for the lender’s title insurance protection, the lender’s policy of title insurance does not protect the buyer and a claim can only be made if the lender suffers a financial loss because of a title defect that adversely affects a foreclosure of the buyer’s mortgage. There have been many defects in titles which could not be revealed by an examination of the public records. These defects usually arise at a time after the transaction has taken place and purchasers can suffer significant losses as a result of them.