If you have trouble finding a real estate title at the registry of deeds, the property you are interested in may instead have a land deed registered with Land Court. Originally intended to protect property owners, Land Court can add costs and complications to today’s real estate market. Deregistering a land deed from Land Court and recording the title with the Registry of Deeds can minimize costs, simplify a closing and sale, and smooth the way for future transactions.
Massachusetts is one of just two states with a dual system for recording property transactions (the other is Hawaii). Nearly all (90%) of titles are Recorded Land with the Registry of Deeds. The remaining 10% or so is considered Registered Land, as a land deed under the auspices of Massachusetts Land Court.
Under the Registry of Deeds, all documents related to the real estate ownership, such as deeds, mortgages, certificates of homestead, and liens, are recorded through a fairly simple and straightforward process. However, registering with Land Court is a more formal and often more complex process for any real estate transaction, whereby the government certifies the legalities of the ownership interests. And once real estate is registered with Land Court, it usually remains there.
Land registered with Land Court can offer peace of mind – or cause headaches.
Although it is rare to have real estate registered with Land Court, there are instances when it could be beneficial.
Moving the land title recording out of the realm of private recording, search, and certification and into a judicial system means the documents will be examined more closely, which could mitigate risks. Adverse possession cannot be used to claim title to registered land meaning the owner of a registered property has the upper hand in any land dispute unless Land Court rules otherwise. Registered land purchasers can also benefit from knowing their property boundaries have been certified by a court and that the title is accurate and less prone to errors, as the court reviews the title before it can be registered.
Property owners dealing with Land Court, however, have often found it to be a time-consuming, costly, and cumbersome process. Any changes to a deed, mortgage, certification, or other documents related to the registered land must be reviewed and certified by Land Court – usually in person.
Where Land Court can be particularly burdensome is with commercial or investment properties. For example, Sassoon Cymrot recently represented a developer who was building a 50-unit condominium development on land that had been registered with Land Court at the time of purchase. Sales would have been significantly delayed if the land remained certified under Land Court.
For a condominium title registered with Land Court, the Master Deed and the Declaration of Trust must be presented to the court for approval before it can be registered. Then, each unit must be separately registered with Land Court after a review. Subsequently, each time a unit owner faces financing or needs to record a lien waiver or lien certificate, they must again be reviewed and certified by Land Court before it is filed. Remember – Land Court is only conducted in person and at higher fees than the Registry of Deeds.
Deregistration as a remedy
There are two avenues to withdraw from Land Court for certain parcels of land that qualify for deregistration. Under General Law Chapter 185, Section 52, land can be deregistered if it meets requirements pertaining to size or usage of the parcel of the land registered, to improve the land, or for other “good cause.” Under “land improvement,” the conversion of property for condominium use is explained. Thus Sassoon Cymrot advised the condominium developer to deregister the parcel from Land Court prior to putting any units on the market. If we had waited until after the units were sold, each registered land owner would have had to join in a complaint to withdraw.
General Laws Chapter 183A, Section 16, allows a titleholder to deregister land that is partially registered land and partially recorded land by recording the Master Deed and Condominium Documents with the Registry of Deeds. At the same time, the petition to Land Court is filed and registered.
In both cases, when filing a petition in Land Court, a title examiner, appointed by land court, verifies the ownership and determines who the interested parties are (e.g., mortgage holders or lessees). Interested parties are notified and given the opportunity to object to the withdrawal.
In this example case, de-registration took six months and was well documented – but it still delayed the Certificate of Occupancy for months.
Fortunately, Sassoon Cymrot planned to withdraw from Land Court in advance, so the developer was not negatively impacted by court delays as the process coincided with building the units. Any real estate sales transactions that occur while a complaint is being reviewed in Land Court would trigger requirements to notify and join unit owners in the petition under GL Ch 183A, Sec. 16. Sassoon Cymrot saved the developer money and hassle by filing to withdraw from Land Court before the units were on the market.
Deregistering a deed from Land Court and recording the title with the Registry of Deeds instead is an investment that can minimize costs, simplify the closing and sale, and smooth the way for future transactions.
If the real estate you are interested in has a deed registered with Land Court, you may face a complex, timely, and difficult process. Whether you have a land dispute, are looking to convert property to condominiums, Sassoon Cymrot Law can help. Contact us today.