Susan is a real estate salesperson in Massachusetts. Her client, Tom, is purchasing a home in Newton and asks her whether he should record a Declaration of Homestead. Tom currently has $420,000 in equity in the home. Which advice most accurately reflects Massachusetts law under MGL Chapter 188?
Correct Answer
D) Tom should record a Declaration of Homestead to protect up to $500,000, since his equity exceeds the $125,000 automatic protection
Under MGL Chapter 188, the automatic homestead only protects $125,000 in equity by operation of law. Since Tom has $420,000 in equity, the automatic homestead leaves $295,000 of his equity exposed to unsecured creditors. By recording a notarized Declaration of Homestead at the Registry of Deeds, Tom can protect up to $500,000 in equity, covering his full $420,000.
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Related Topics & Key Terms
Key Terms:
Related Concepts
License requirements are the mandatory qualifications—including pre-licensing education, examination, and background checks—that a person must satisfy before legally practicing real estate. These requirements are established and enforced by each state's real estate commission.
Market allocation is an illegal antitrust practice in which competing real estate brokerages agree to divide markets among themselves by geographic area, property type, or price range, thereby eliminating competition.
Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.
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