If our office has been asked to act as a settlement agent in the closing of the real estate you are selling, there are some matters that we will require your assistance with in order to expedite the transaction and prevent delays or extra costs to you. They are listed below. Please also remember that you must bring a valid driver's license or passport with you to closing for proper identification. The closing cannot take place if you do not have this identification with you. In order to ensure a smooth closing, we would like to make you aware of the following information.
1. MORTGAGES: If your property is presently mortgaged, the mortgage(s) will be paid off at the time of closing using proceeds from the sale, if any. You will need to fill out a form and return it to us right away so we may contact the mortgagee(s) and make the necessary arrangements for payment. This is very important and requires your immediate attention. After your mortgage(s) has been paid in full, the banks will send us discharges which we will record at the Registry of Deeds. In the event there is a non-institutional mortgage (i.e. one given to a private individual, trust, or corporation as opposed to a bank or mortgage company), we will require that the payoff amount be furnished to us before the closing and a discharge be delivered at or before the closing. UNFORTUNATELY, THERE CAN BE NO EXCEPTION IN THIS REGARD. If you are uncertain about whether an outstanding loan is held by a private lender, please contact our office or have your attorney do so. The obligation to furnish a discharge at closing applies also to outstanding attachments or other liens if any.
2. DEED: The preparation of a new deed to convey the premises to the buyer is your responsibility. You should have your attorney send us a copy of the proposed deed as soon as possible and before the closing date. While we cannot represent the lender and you, we are sometimes asked to prepare a deed as part of our mortgage services.
3. SMOKE AND CARBON MONOXIDE DETECTOR CERTIFICATE: We call to your attention the provisions of Massachusetts General Laws, Chapter 148. You should contact your local fire department, arrange for an inspection, obtain a Certificate of Compliance and bring the original with you at the time set for closing and fax a copy to us prior to closing.
4. ELECTRICITY, WATER, SEWER, and FUEL: If your electricity is provided by a municipal light plant, you must bring with you a final electric reading. Similarly, your fuel oil readings (if your property is not a condominium).
5. EXPENSES: You will also be required to pay for Massachusetts Excise stamps, recording fees to discharge mortgages and other liens, and, where appropriate, to pay these items from the proceeds of the sale.
6. POWER OF ATTORNEY: If there is a power of attorney involved, please send our office a copy of the Power of Attorney document prior to the closing. The use of the power of attorney will have to be approved by our client and then the form and content thereof must be reviewed by our office. In any event, the deed transferring title from you to the buyer must be signed by you in the original and notarized.
7. CONDOMINIUM UNITS: If the transaction involves a condominium unit, you are required to provide a certificate pursuant to Massachusetts General Laws, Chapter 183A, Section 6(d). This certificate is obtained from the organization of unit owners and states the unpaid common expenses which have been assessed to the unit owner. You will also be required to provide a Certificate of Insurance naming, as insured, the buyer, and the buyer’s new lender, as well as its successors and assigns as their interest, may appear. It is imperative that the foregoing language is on the Certificate of Insurance. The trustees of the condominium trust can assist you in this matter.
8. SALE PROCEEDS: If the closing takes place in our office, we will make every attempt to record papers and disburse funds on the same day. However, no matter where this transaction closes, your funds will not be released to you until the deed and mortgage have been recorded at the appropriate Registry of Deeds. Your proceeds will be issued to you by a check drawn on our trust account as is the standard procedure in Massachusetts.
9. TRUST OWNERSHIP: If this property is owned by a trust, our office also requires a Trustee’s Certificate. This certificate should state that the trust has not been terminated, amended or revoked; that the trustee(s) are the same and they have not resigned; and that so far as may be required by the beneficiaries, they have assented to the transaction and that they are of legal age and competent. In addition, the statement should be acknowledged before a notary public and be in the form suitable for recording. We can prepare such a certificate at a nominal charge if you request us to do so.
10. FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT OF 1980 AS AMENDED: This Federal Law places special requirements for tax reporting and withholding on the parties to a real estate transaction under certain circumstances as set forth in the law. You should seek the advice of your attorney or accountant concerning the effect of this Act on this transaction. You will be required to execute a copy of the enclosed certification under penalty of perjury at the closing. If you do not plan on attending the closing, please be sure that your attorney or agent delivers the fully completed and executed copy of the affidavit along with the deed. The closing attorney for the firm cannot and will not provide information, advice, or opinions regarding the Act’s applicability to you or to this transaction.
11. FEDERAL TAX LAWS: Since January 1, 1986, Federal Law requires the closing attorney to report the proceeds of the transaction to the Internal Revenue Service. Therefore, you will need to complete anINTERNAL REVENUE SERVICE 1099S REPORTING FORM and return it to us. Please be sure to include your Social Security or Federal Identification Number.
12. TITLE EXAMINATION: Please note that if, as the result of searching the title or obtaining the plot plan and municipal lien certificate, we discover that there are any deficiencies or defects, they are your responsibility to correct or to have your attorney do so on your behalf or determine your rights, duties, and obligations under your Purchase and Sale Agreement.
13. CLOSING: You should also be aware that most lenders require 72 hours notice in advance of the day of closing to prepare the loan papers and to obtain the funds. There is no exception to this requirement and it is therefore incumbent upon you to coordinate scheduling of the passing not only with our office but with the buyers and brokers as well.
14. IF YOU ARE SELLING PROPERTY IN THE CITIES OF BOSTON, LYNN, LAWRENCE, or HAVERHILL (OTHER THAN A CONDOMINIUM UNIT), FINAL WATER READINGS ARE REQUIRED. Due to experience with the Water and Sewer Commissions in these communities, we have been forced to require a final water reading for all closings pertaining to property in these cities. For property in the City of Boston, a final water reading must be ordered by you from the Water and Sewer Commission. It takes approximately two (2) weeks to get the final reading. Please note that a water bill, even a water bill received on the day of the closing, is not sufficient, as the Boston Water and Sewer Commission is far behind on its billings. For all other communities please contact the Water and Sewer Commission of that city or town if you have any questions.
15. CORPORATIONS, LLPs and LLCs: If you hold title to the property in a corporate name or in an LLC or LLP you should immediately take steps to secure the following documents:
A) A Certificate of Legal Existence from the Secretary of State and the latest annual filing.
B) For corporations, a waiver of the corporate excise tax lien imposed by the Commonwealth of Massachusetts Department of Revenue under M.G.L. Chapter 62C, Section 51, or statement on the deed that the sale does not constitute a sale of substantially all of the Corporation’s assets.
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