Angela is purchasing a home in Medford, Massachusetts. Her purchase and sale agreement includes a title contingency, allowing her to cancel if a title search reveals any encumbrances she finds unacceptable. The title search reveals that a previous owner filed a Declaration of Homestead under MGL Chapter 188, and the current seller never formally released it. Angela's attorney says this could affect the title. Under Massachusetts law, which statement is most accurate regarding the homestead declaration and the title contingency?
Correct Answer
D) The prior homestead declaration remains a cloud on title until formally released, and Angela may invoke the title contingency if the seller cannot provide a release before closing
Under MGL Chapter 188, a declared homestead is recorded at the Registry of Deeds and provides up to $500,000 of equity protection for the homeowner's primary residence. Because it is a recorded instrument, it appears in a title search and can constitute a cloud on title if not properly released. When a property is sold, the homestead should be formally released or it may create a title issue. Angela's title contingency allows her to require the seller to clear the title by obtaining a release of the homestead declaration before closing, or she may cancel the contract if the seller cannot do so.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
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