You've Been Certified!
Posted by Dave Lima on Wed, Jul 02, 2008 @ 10:13 PM
Purchasers of Massachusetts real estate which is improved by a one to four family home they will occupy and which is financed with a purchase money mortgage are entitled to a Certification of the real estate title by the lender's attorney. Massachusetts General Laws, Chapter 93, Section 70 requires the lender's attorney to examine the property title records for a period of fifty years. The Massachusetts real estate attorney must then provide the purchaser with a Certification that the purchaser holds "good and sufficient record title to the mortgaged premises free from all encumbrances" except only those matters which are listed in the Certification. Any such exception must be specifically enumerated. Broad and general exceptions, such as "all easements of record" are not acceptable. The MA real estate lawyer must also make a certification to the lender that its mortgage is a "good and sufficient record first mortgage" to the property.
If you have a real estate title problem which surfaces after you've closed, you may have recourse against the attorney who certified your title. The certifying attorney remains liable to the purchaser in the amount paid for the property as long as they own the property. The attorney remains liable to the mortgage holder in the original amount of the mortgage for the life of the loan. The Certification provides buyers and lenders with a remedy against a negligent attorney.
Of course, attorneys retire, become disabled, die, or if lucky, retire to a tropical island. If that happens, your Certification may not be worth much. Always strongly consider the purchase of an Owner's Title Insurance Policy. The cost is reasonably discounted because the lender is always requiring a Lender's Policy that the buyer is paying for, and insurers will allow for a reduced rate to the buyer. After all, the purchase is likely to be your most major investment, and the insurance premium is a one time charge.