Memorandum  Memo: New Homestead Law (Chapter 188)

Date:	03/16/2011
Referenced Sources:	Chapter 188: Homesteads Chapter 395 of the Acts of 2010

To: All Registry Districts Registered Land Division

From: Edmund A. Williams, Chief Title Examiner

Introduction

Pursuant to Chapter 395 of the Acts of 2010, a copy of which is attached hereto, Chapter 188 of the Massachusetts General Laws, the Homestead Statue, has been rewritten in its entirety.

Any document which is in compliance with the statute may be accepted for registration.

Land Court Guideline No. 25, Homestead, is superseded by the new statute.

The following are excerpts from the revised Chapter 188, some of which constitute significant changes from past practice:

Section 1 - Definitions

(a) Under Declared homestead exemption ".... separate estates of homestead may be declared pursuant to sections 2 and 3 on the same home ..."

(b) "Family" or "family members", (1) married individuals, both of whom own a home, and any minor child; (2) a married individual who owns a home, a non-titled spouse of the married individual and any minor child; or (3) an unmarried individual who owns a home and any minor child.

(c) "Owner", a natural person who is a sole owner, joint tenant, tenant by the entirety, tenant in common, life estate holder or holder of a beneficial interest in a trust.

Section 2 - Elderly or Disabled Homestead

(d) Nothing in this section shall prohibit an elderly or disabled person from declaring or continuing a homestead pursuant to section 3, but no person shall concurrently hold rights under both this section and section 3.

Section 3 - Homestead Declaration

(a) created by a written declaration as per section 5 of chapter (no longer can be created in deed)

(b) may be acquired by all owners who occupy or intend to occupy the home as a principal residence, including trustees

Section 5 - Execution and Content

(a) A declaration of homestead shall be in writing, signed and acknowledged under penalty of perjury by each owner to be benefitted by the homestead, except as provided in clause ( 4), shall be recorded and shall comply with the following:

1. each owner to be benefitted by the homestead, and the owner's non-titled spouse, if any, shall be identified;
2. the declaration shall state that each person named therein occupies or intends to occupy the home as their principal residence;
3. if the home is co-owned by a married couple, whether in their names only or as co-tenants with others, and the home is the principal residence or is intended to be the principal residence of both spouses, a declaration under section 3 shall be executed by both spouses; and
4. if the home is owned in trust, only the trustee shall execute the declaration.

(b) A declaration of homestead under section 2 shall, in addition to the requirements of subsection (a), include the following:

1. a statement that the owner to be benefitted is an elderly person or a disabled person; and
2. with respect to a declaration of homestead benefitting a disabled person: (i) an original or certified copy of a disability award letter issued to the person by the United States Social Security Administration; or (ii) a letter signed by a physician registered with the board of registration in medicine certifying that the person meets the disability requirements stated in 42 U.S.C. 1382c(a)(3)(A) and 42 U.S.C. 1382c(a)(3)(C) as in effect at the time of recording; provided, however, that the award letter or physician's letter shall be recorded with the declaration.

(c) A declaration of homestead shall not be created within a deed or other instrument vesting title in the owner.

Section 9 - Subordination to mortgages (in its entirety)

An estate of homestead shall be subordinate to a mortgage encumbering the home executed by all the owners of the home. For the purposes of this chapter, a mo1tgage shall include an instrument granting a security interest in a manufactured home or cooperative housing unit. The subordination shall not require the signature of a spouse who is not an owner. A mortgage executed by fewer than all of the owners of a home that is subject to an estate of homestead shall be superior only to the homestead estate of the owners who are parties to the mortgage and their non-titled spouses and minor children, if any. No statement that a homestead estate shall be subordinate to the mortgage shall be required in the mortgage instrument and nothing contained in a mortgage or any document executed in connection with the mortgage shall affect or be construed to create, modify or terminate a homestead estate, other than to subordinate it to the mortgage as aforesaid. A mortgage lender shall not require or record a release of homestead in connection with the making and recording of a mortgage.

Section 10 - Termination (in its entirety)

(a) An estate of homestead created under section 3 or 4 may be terminated by any of the following methods:

1. a deed to a non-family member conveying the home, signed by the owner and a non-owner spouse or former spouse residing in the home as a principal residence as of the date of the deed;
2. a recorded release of the estate of homestead, duly signed and acknowledged by the owner and a non-owner spouse or former spouse residing in the home as a principal residence as of the date of the release;
3. the abandonment of the home as the principal residence by the owner, the owner's spouse, former spouse or minor children, except that such abandonment shall terminate only the rights of the persons who have abandoned the home; provided, however, that no person in military service as defined in 50 U.S.C. appendix, section 511 shall be deemed to have abandoned the home due to such military service;
4. in the case of a home the title to which is held in bust, by either: (i) the execution of a deed or a release of homestead by the trustee; or (ii) action of a beneficial owner identified in the declaration, who is not a minor child, taken in the same manner as provided in clauses (2) and (3); or
5. the subsequent recorded declaration of an estate of homestead under section 3 on other property, except that such declaration shall terminate only the rights of the owner making such subsequent declaration and the rights of that owner's spouse and minor children who reside or intend to reside in the other prope1ty as their principal residence.

(b) No deed between spouses or former spouses or co-owners who individually or jointly hold an estate of homestead under section 3 or 4 and no deed between a trustee and a trust beneficiary or between a life tenant and a remainde1man shall terminate the homestead unless each co-owner, spouse, former spouse or trust beneficiary entitled to the benefit of the homestead has executed an express release thereof pursuant to clause (2) or clause (4) of subsection (a).

(c) If a subsequent declaration on other property which terminates a homestead under clause (5) of subsection (a) is later invalidated, the prior declaration shall not be reinstated; provided, however, that the owner shall have the benefit of the provisions of section 4.

(d) Except for the subordination provided in section 9, nothing contained in a mortgage or any document executed in connection therewith shall terminate or otherwise affect a homestead estate.

(e) A deed reserving an estate of homestead shall convey, according to its terms, any title or interest in the property beyond the estate of homestead.

Section 13 - Statement/Affidavit

A deed, release or mortgage containing a statement of the marital status of a grantor may be relied upon by a good faith purchaser for value. As to acts undertaken in good faith reliance on such deed, release or mortgage, an affidavit executed and acknowledged by the grantor, releaser or mortgagor under penalty of pe1jury stating that, at the time of delivery of the deed, release or mortgage, the affiant had no spouse then entitled to claim the benefit of an existing estate of homestead, shall be conclusive proof of the nonexistence of such benefit at that time. The affidavit may be recorded in connection with the execution and delivery of a deed, release or mortgage and shall be accepted in the appropriate registry of deeds and registry district of the land court. The subsequent residency or renewal of residency in the home by a spouse of the grantor, releaser or mo1tgagor shall not defeat the priority of a mortgage, release or conveyance accepted in reliance on such affidavit.

Of the foregoing, some of the significant changes to past practice at the registry districts will be:

1. Multiple owners can file one document (Section 5(a))
2. Declarations are under the pains and penalties of pe1jury and acknowledged (Section 5(a))
3. Non-owner spouses are to be identified (Section 5(a)(J))
4. If title is in the name of both spouses, declaration shall be executed by both (Section 5(a)(3))
5. Additional documentation is now required to be filed with a disabled homestead (Section 5(b)(2)).
6. A trustee can now declare a homestead (Section 5(a)(4)) and will name, in the document, the beneficiaries who occupy or intend to occupy locus as their principal residence. If title is in a nominee bust, a trustee's certificate indicating the filing is pursuant to the direction of the beneficiaries should accompany the homestead
7. Homesteads can no longer be created in a deed (Section 5(c))
8. Affidavits may be accepted for registration (Section 13)

Although not contained in the new statute, Chapter 395 of the Acts of2010 concludes:

"All existing estates of homestead in effect on the effective date of this act shall continue in full force and effect notwithstanding the repeal of any law under which they were created and shall be governed by this act, notwithstanding their failure to comply with the execution requirements of section 5 of chapter 188 of the General Laws,"

While the statute does not require an existing estate of homestead to be re-filed in order to be in compliance with the new revisions, registry personnel are to accept for registration any homesteads presented for recording, notwithstanding the existence, on record, of a prior homestead.

Registry personnel are not to advise the public or the bar as to whether a homestead should or should not be filed, but accept for registration those documents that are presented. They may still be referred to as "Purported Homestead" per Guideline 25.

Homesteads are accepted for registration with the understanding that the court, by accepting the document, is not adjudicating the validity or effectiveness of the filing, which may be determined at a future date by a court of competent jurisdiction.

Please contact me if you have any questions regarding these revised standards.