Imagine buying a property somewhere in Massachusetts and finding out that the property didn’t actually belong to the person who sold it to you, or you find out that the property was tied up in several debts still outstanding. This doesn’t, or shouldn’t happen, of course, because no property should change hands in Massachusetts before an affidavit of title is provided by the seller.
An affidavit of title is a legal requirement in this state, and most others in the U.S., and its purpose is to protect the buyer from a sale that has pending legal issues attached to it.
What is an affidavit of title?
The affidavit of title is normally prepared by the seller’s lawyer representing the seller in the sale. Your own real estate agent who is helping you seek a suitable property and is the link between the seller and you, the buyer, should give you advice about the necessity of securing the affidavit of title and what your options are if legal issues like debts, mortgages, or other problems, arise. A real estate attorney will be required to check through the documentation before closure can be made.
The affidavit of title should include the following information:
- the name and address of the seller;
- a statement to confirm that the seller is the true and exclusive owner of the property;
- a statement to confirm that the seller is not selling the property to anyone else;
- a statement to confirm that there are no liens attached to the property;
- whether the property still has a mortgage outstanding which may only be paid off after the sale has closed;
- whether there are any exclusions, such as easements or encroachments, that may affect the use of the property.
Legality of an affidavit of title
When an affidavit of title is prepared for a seller, it is prepared in good faith, i.e. its accuracy depends on what the seller tells the real estate agent and lawyer about the property and whether there are any issues regarding the potential sale of the property. When the affidavit of title has been prepared, it must be notarized, i.e. a sworn statement signed in front of a notary must be made regarding the accuracy of the information in the affidavit. Then, the notary stamps the document with a seal.
Regardless, there are situations in which such an affidavit may have been prepared and notarized in bad faith, i.e. the seller did not reveal every potential issue that may have prevented a potential buyer from going ahead with the purchase. However, armed with the signed and notarized affidavit, if an issue does arise after the sale has closed, the new owner has the evidence that can be used to file a lawsuit against the seller.
For example, it may transpire that a lien had been attached to the property by a tradesman due to an outstanding debt that had not been fully repaid. This should have been resolved before the sale went through or at least itemized on the affidavit, giving the prospective buyer a chance to question the seller before going ahead with the purchase. If there are liens or other legal issues attached to a property, then these can be ordinarily resolved before an affidavit is prepared, making the way clearer for a presentation to the buyer. The seller can remove liens by paying any associated debts and then asking the individual or business that placed the lien on the property to remove the lien. The release of lien is normally done formally by filling in a form submitted to the county recorder’s office.
The buyer may also ask the seller to have a survey completed of the boundary lines of the property if there are any potential issues regarding exclusions such as easements across the property.
Requirement for the use of a real estate attorney before closure
If the sale were to proceed without an affidavit of title, then the buyer could become liable for any debts attached to the property, and may even find that the sale was not valid as the property had been sold to someone else at the same time, or the sale is challenged by another owner who had not been disclosed by the seller.
To conclude, an affidavit of title does not entirely preclude the existence of fraud in the sale of a property, but the fact that it is a legal requirement in Massachusetts reduces the potential for misunderstanding and fraud immensely and gives the buyer more peace of mind when closing a purchase.
Massachusetts law requires a real estate attorney to examine the sale documents before a closure. This will ensure that the affidavit of title and all aspects of the property purchase are in order before the sale has been completed.
For more information, visit our website Mucci Legal or contact us for a free initial legal consultation today.