Tuesday, January 10, 2017

Probate Records: A Critical Element of Good Title

By Edward A. Rainen

Reviewing the records in Probate Court is an important part of every real estate title examination for either purchase or mortgage financing. The typical post-title examination probate check concerning the current owners provides necessary title information about deaths, divorces, the appointment of guardians or conservators, equity suits, name changes, and petitions for partition. This information does not need to be recorded in the Registry of Deeds in order to affect title and the probate files are the sole source of this information, without which title cannot be certified to the owner or lender.


By contrast, probates pre-dating the current owner contain critically important information for
today’s title examinations.


Certainly, the current owner in the chain of title for a piece of property must be checked in the Probate, Divorce and Equity indices in the Probate Court for the county where the property is located. It is the methodology of some examiners to check each and every owner in the chain, particularly concerning competency and divorce. There are now computer indices in virtually every Registry of Deeds so the existence of recent probate cases may be determined, but the documents are not available at the registries as described above. The title examiner’s job is to provide the closing attorney with the information that is filed in the Probate Court, and the closing attorney must interpret the information in the documents and make sure that any conveyance includes any necessary Probate Court action. The easy availability of the probate documents is vital to this process.


Ed Rainen
Transactional Lawyers are statutorily mandated to examine title back to a “good deed” at least 50 years old. Significantly, pursuant to G.L. Ch. 93, § 70, the closing Attorney must certify title to a residential buyer. Further, even commercial title transactions require proper title underwriting and all title insurance companies require a 50 year examination, as, of course, does the Land Court for its Registration case title abstracts.  Death is a fact of life and there is nothing unusual about people dying while owning their homes or commercial properties. Most title examinations cannot be performed without access to probate records, either the current transaction or 50 years or more years in the past. Accordingly, the Probate Court’s “dead case files” are the real estate conveyancer’s “living real estate records”-- - and we need access to them, desperately. Significantly we need to identify the heirs at law for intestate estates and review the will (and/or compromise) for testate estates.


As we approach the first year of full implementation of the requirements of the Consumer Finance Protection Bureau (C.F.P.B.), the time constraints on producing the documentary elements of a real estate transaction have become more and more constricted. The physical location of Probate Courts and the important probate records therein contained is an obstacle to obtaining these records timely and at a reasonable cost. Many Probate Courts are no longer immediately accessible from the Registry of Deeds in the same county. None of the probate courts have created digitized documents in .PDF format, in the same fashion accomplished by the Registries of Deeds almost 15 years ago. As the difficulty of obtaining probate records increases, the additional time and cost to obtain and review paper probate documents from a distant probate court is a genuine issue for, not only the title examiner, but the Lender’s attorney, the real estate brokers and, of course, Buyer and Seller. If residential Seller is intending to use the proceeds of the sale of his/her home to purchase a new home, and that sale is delayed two to three weeks, the delay triggers the “time is of the essence clause” of the Purchase and Sales Agreement for both the sale and acquisition and may invoke the “liquidated damages” provision as well.


Norfolk County’s probate documents were moved from the Probate Court located in the Norfolk District Registry of Deeds in Dedham to a new facility in Canton several years ago; Worcester County’s probate documents are “off site” and must be ordered 24 hours in advance before they can be examined; Middlesex North’s probate documents are in the Probate Court with the Middlesex South Registry of Deeds in Cambridge; Essex North District’s probate records are in Salem, and the Probate Court in Salem is now in a building distant from the relocated Essex South Registry of Deeds; Bristol County title examiners from the registries in New Bedford and Fall River must travel to Taunton to examine probate documents; and in Berkshire County probate records are located in Pittsfield with the Berkshire Middle Registry of Deeds. Berkshire South and North title examiners must travel to Pittsfield to retrieve probate documents. The Plymouth County Registry of Deeds is across the parking lot from the Probate Court.


The solution to the access to historic documents from closed probate cases is scanned copies available on-line. To do so offers the obvious benefits to the court of eliminating document retrieval, reducing congestion at the probate counter and lowering records storage fees. The benefit to the profession, the lending and brokerage community and the real estate buying and selling public would be significant, also.


Tenancy, Death and the Need to Probate an Estate


If an individual holds title to real property, and dies before conveying the property, the individual’s estate must be probated to convey the property.


If two or more people hold title to real property as tenants in common, and one of them dies, that person’s estate must be probated to convey his/her ½ interest in the property. If two or more people hold title to real property as joint tenants, and one of them dies, the title to the property vests in the remaining joint tenant. A proof of death for the deceased owner and, if the date of the death is within 10 years, an estate tax affidavit or estate tax release must be recorded for title to vest in the surviving joint tenant. Real Estate Bar Association (“REBA”)’s Title Standard # 71 sets forth acceptable proofs of death, one of which is a probated estate.The estate of a sole surviving joint tenant must be probated to establish ownership of the real estate in the estate.


A title examiner should check each owner in the chain of title, to establish if each owner is still alive, has filed for divorce, changed their name, has been determined to be incompetent or below the age of consent and is therefore the subject of a guardianship or a conservatorship, filed a petition to partition, or filed a suit in equity concerning the subject premises. This check is called a probate, divorce and equity check.


If the individual owner died during the period of ownership, the title examiner will abstract the “probate” file and abstract, or photocopy, the pertinent documents to include in the title
examination.


Each probate file is assigned its own distinct probate docket number. Each Probate Court keeps a docket book for all probates, and each item, i.e., petition for probate of the will, bond, inventory, license to sell, that is filed for each probate is listed in the docket book. An abstract of a recent probate may include a copy of the docket book for that specific probate, to verify that all important documents that have been filed in a probate are included in the abstract of the probate. The docket sheet allows the title examiner and the reviewing attorney to confirm that all of the documents which have been filed for a specific file are still in the probate file.


If the deceased owner died with a will, the title examination includes a completed abstract of the probate file, the allowed petition for probate of the will, a complete copy of the will and a complete copy of any license to sell. A copy of the docket sheet for the file should also be included.


If the deceased owner died without a will, the title examination includes a completed abstract of the probate file, the allowed petition for the administration of the estate and a complete copy of any license to sell. A copy of the docket sheet for the file should also be included.


The Power to Sell


For title purposes, if the will of the decedent grants the Personal Representative the power of sale, the Personal Representative may sell the property regardless of any other disposition of the property in the will. See REBA Title Standard No. 10.


If there is no power of sale in the will or if there is no will, the Personal Representative must obtain a License to Sell to sell the property. The terms of the license must be followed exactly.


The same kind of license may be granted to the Personal Representative to mortgage the property A sale by a guardian or conservator may only occur based upon a license to sell.


Conveying Property under the Massachusetts Uniform Probate Code


The adoption of the Massachusetts Uniform Probate Code (“MUPC”) on March 31, 2012 and the technical amendments that were signed into law on July 8, 2012 do not change the necessity of probating an estate to convey real estate that is held in an estate.


The importance of a title examination that includes a probate, divorce and equity check and reviewing relevant probate files in Probate Court is the same under the MUPC. The MUPC codifies the process and the procedures for probating estates, makes it clearer and simpler in many cases. Much of the law relating to conveying real estate from an estate remains the same and review of probate documents in a timely fashion is an absolute necessity. M.G.L. c. 202 is still in force and effect, so the need for a license to sell from an intestate estate, a will without the power of sale, or a conservator still exists. It is important for the real estate bar to keep the Probate Courts informed of the need for access to the actual probate files and work with the courts to find a comprehensive method of allowing the title examiner and attorney to review probate documents.


Ed Rainen has concentrates on commercial and residential real estate title and conveyancing matters. In addition to preparing title abstracts and reports on subcontract to other lawyers, in his related role as certifying counsel, Ed is also a policy-writing agent with underwriting authority for eight title insurance companies.  He frequently testifies as an expert on title matters. Ed can be contacted by email at erainen@rainenlaw.com.

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