A Quitclaim? No problem. It’s Common Practice Here — and Safeguarding Your Title Is Straightforward.
Three major Massachusetts real estate deeds are commonly used: the quitclaim deed, the warranty deed, and the release deed. In contrast to most other places, Massachusetts home buyers receive their property through quitclaim deeds. So, we need to delve into the use of the quitclaim deed in Massachusetts.
Title Promises in the Massachusetts Statutory Quitclaim
As our regular readers know, a quitclaim transfers any interest one person holds in real property to a new owner. Yet in Massachusetts, the quitclaim can refer to two kinds of deeds:
- As in other states, the traditional the traditional real estate quitclaim is the go-to document for conveying homes between Massachusetts family members or owners and their businesses, for clearing title of ambiguities, and for relinquishing interests after divorce. This document transfers property without any warranty, as the conveyance typically happens within circles of close associates who have no questions about the title.
- In Massachusetts, a seller will also use a quitclaim deed — the statutory quitclaim deed — to transfer real estate in an arm’s length sale to a buyer. This is a common, standard deed for Massachusetts home sales. With their statutory quitclaim covenants, these quitclaim deeds protect home buyers the way a warranty deed would in most other states. They just limit the seller’s responsibility for really old title defects.
To take a look at what the statute actually says, we turn to the Massachusetts General Laws, Chapter 183, Section 11. A statutory quitclaim deed carries:
…the force and effect of a deed in fee simple to the grantee, his heirs and assigns, to his and their own use, with covenants on the part of the grantor, for himself, his heirs, executors, administrators and successors, with the grantee, his heirs, successors and assigns, that at the time of the delivery of such deed the premises were free from all encumbrances made by him, and that he will, and his heirs, executors and administrators shall, warrant and defend the same to the grantee and his heirs and assigns forever against the lawful claims and demands of all persons claiming by, through or under the grantor, but against none other.
As you see, there’s warranty language in the statute that protects the buyer. You can find this language and promise reiterated in Section 17, describing the deed’s quitclaim covenants.
So, what we typically think a quitclaim deed does in most places is similar to what a release deed does in Massachusetts: transfers property without title promises.
Transferring a Home: Key Elements of a Massachusetts Quitclaim Deed
A valid Massachusetts deed is signed and acknowledged in front of a justice of the peace or notary public. The buyer pays the fee to have it recorded in the registry of deeds in the property’s county. A certificate of the deed’s acknowledgement or proof of its execution must also be recorded with the deed.
The deed must set forth:
- Grantor and grantee. The seller (grantor) and buyer (grantee) must be named, with the grantee’s mailing address included.
- Vesting. Massachusetts buyers may be sole owners, or they may be co-owners who vest the title as tenants in common, joint tenants, or tenants by the entirety.
- Consideration. The purchase price is a basis for valuation of the property and the calculation of transfer taxes.
- Legal Description. Every deed must identify the property being conveyed, sufficiently describing the parcel, including its physical dimensions and boundaries (“metes and bounds”), with reference to recorded plans, surveyors’ points, and visible boundary markers.
- Rights and easements. The deed also notes utility easements, rights to street access, restrictions, covenants, and any takings on the property.
- Chain of title. The last prior deed must be referenced to show the chain of title.
If the deed is acknowledged in another state, outside of Massachusetts, this can be done with anyone authorized to acknowledge deeds. Be sure to attach a certificate of authority to the deed.
Safeguarding Your Massachusetts Home Title
Beyond having a duly executed deed, is there anything special Massachusetts buyers do to safeguard their ownership? Should they negotiate for warranty deeds? They could, but it is not necessary, and it would be more costly to obtain. An if a seller agrees to sell a Massachusetts home with a warranty deed, it could complicate closing. When in Rome…
Massachusetts buyers, like buyers everywhere, need to pay for title insurance to protect their mortgage lenders. And they, too, may wonder if it’s worthwhile to also buy an owner’s policy, for their own protection. Some buyers balk, concerned that Massachusetts real estate brokers are taking sizable fees when buyers get these policies, as an oft-cited exposé in Commonwealth lays out. As the article notes, title defects were big problems in past decades, but are rare today. With most records online and easily updated, buyers rarely face unknown title flaws, so insurance payouts are relatively few.
On the other hand, advocates for owner’s title insurance point out those few cases can run into tens of thousands of dollars in litigation costs. They insist that buying a title policy for somewhere around 2% of the home price makes sense. It’s a one-time payment that stays with the house as long as the buyer does. After all, no title search can discover every incident that happened to the title or to the land years ago.
What Insurers Do If a Title Problem Turns Up
From the outset, title companies in Massachusetts (and elsewhere) only issue policies for titles they believe are sound. Underwriters wouldn’t approve loans based on shaky policies. In this sense, we might think of the title policy as a confirmation, and a cost-effective element of backup protection.
And it’s important to note that the companies don’t just send payouts to homeowners. Before paying out, a title company is likely to attempt to resolve the problem. It prepares cases for litigation, and deals with many of the expenses involved in clearing policy holders’ titles. So, a title policy’s benefit isn’t just a matter of whether it pays out. Holding a title policy means someone is standing by to deal with the details of any possible dispute that could come up.
In some situations, the insurance company will issue an indemnity agreement. This acknowledges that a title defect has been uncovered, but should have no impact on ownership. This is an assurance that the homeowner will be covered for any loss that could arise in the future on account of the title defect.
When Title Searches Miss Things—In Massachusetts and Elsewhere
Stuff happens. Unrecorded encumbrances, improper conveyances and boundary disputes are still with us, even in the digital age. They can create a need to defend the title against legal actions — and that’s what owner’s insurance is for.
Maybe a prior owner died before a deed was conveyed, so relatives should have been on the title but weren’t. Perhaps an unrecorded easement or lien waits in the title history. What if there’s an encroachment or a shared driveway, leading to a serious dispute?
Or maybe there’s a paid-off mortgage still clinging to the chain of title, because a mortgage company went out of business in the financial crisis of 2009 and never got around to recording a release. Perhaps a seller received a payoff letter with instructions to record the release with the county, but didn’t notice the instructions. A homeowner who has a title policy can sell the home despite such surprises, as the buyer’s lender will usually accept the seller’s assurance that the insurer will assist.
We could go on. Maybe the land was once the home of members of the Wampanoag or Nauset tribe of Massachusetts, and never properly conveyed. Or perhaps some underlying document was never correctly signed, delivered, acknowledged or recorded. Maybe there’s a forgery in the chain of title, or an undiscovered will that’s yet to come to light. Owners’ policies may cover the costs of resolving these title issues.
Are the policies too pricey? Arguably so. Is it time for technological innovation in title insurance? No doubt — and that transformation is coming. Is an owner’s policy still important to buy? We’d say so.
M.G.L. C. 183 § 17.
Rich Vetstein, Anatomy of a Massachusetts Quitclaim Deed, Massachusetts Real Estate Blog (June 6, 2011).
Photo credit: Benjamin Rascoe, via Unsplash.