Tag Archive for: Home Buyer

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Buying Land in the Berkshires? Avoid Pitfalls!

Photo of Goodnow Preserve rock wall and green foliage in New Marlborough, Massachusetts

If you’re buying land in the Berkshires, you almost certainly want to be able to build on that land. It’s important to have the opportunity to sufficiently evaluate the land for your needs before you buy.

You don’t want to ask after the purchase, “How close to the property line can I build?” or “How do I know if my property is big enough to build on?” and find out you can’t build that guest house or put an extension on your current home.

We’ve seen this happen before. Here’s an example:

An individual purchased a property in Great Barrington. The tax map showed that the property was 100 ft wide x 100 ft deep (minimum for a building lot). Unfortunately, the assessor’s office had rounded up; the property was under the minimum size requirements and so was not a building lot at all.  It’s only practical use was as a back yard for a neighboring property. The new owner could not build on the property and came to us for help. We wish they had consulted with a zoning attorney before the purchase!

Here’s what you need to know about buying land in the Berkshires and standard land rider.

At the time you sign the contract to buy the property, your realtor will likely attach a Land Rider to the contract.

Among other things, the Land Rider may contain a condition that the lot be deemed a “building lot” by the local building inspector. Unfortunately, there are many other potential issues that could prevent you from building on the property or that could limit where and how you build on the property. At Lazan, Glover & Puciloski (LGP), we strongly recommend that buyers include a contingency in the contract for review and their subjective approval of the uses of the lot.

Property is deemed a “building lot” if it is the required size and has the required length of frontage along a road.

These rules are set by towns under their zoning bylaws. For instance, a town may require that a building lot be 2 acres in size and has 150 feet of frontage along an approved road.

Even if a property meets those minimal qualifications, it may not in fact be buildable at all.

All or part of the lot may be unbuildable if it is within protected areas, such as areas in the jurisdiction of the Wetlands Protection Act or the local wetlands bylaw of the town. Similarly, clearing of land and construction can be significantly limited if the town has adopted the Scenic Mountains Act. 

Local zoning bylaws regulate how many and what size of accessory structures may be located on the property.

Examples: sheds; detached garages; swimming pools. Zoning can regulate the location, length, and grade of a driveway; the location, height, and materials for fences; and even the number of dogs that can be considered pets as opposed to a commercial kennel. A buyer needs an opportunity to understand what limitations there are on the property.

In addition, the buyer will want to consider what use can be made of the surrounding properties.

There are numerous possible uses of neighboring areas that can impact a property.  For instance, in a Right to Farm community, a commercial farming operation could be located next to the property. The possibility of large solar installations and outdoor cannabis growing facilities may also be considered.  Even local rules concerning the use of short-term rentals (such as VRBO or Air BnB) can effect an abutting property.

We strongly recommend that a contract for the purchase of land include a period in which the prospective buyer can obtain all desired information concerning the property.  Any buyer of land should consider retaining an attorney to perform a zoning review of the property, and should consult with a wetlands expert and possibly an engineer or architect, to confirm that the buyer’s vision for the property is achievable.

Contact Lazan Law if you’re about to embark on a home buying journey in the Berkshires.

Disclaimer:  The information contained herein is for informational purposes only. It does not constitute the rendering of legal or other professional advice or services. Your review of this post and/or use of the Lazan Glover & Puciloski, LLP website does not create an attorney-client or confidential relationship between you and Lazan Glover & Puciloski, LLP or any of its attorneys. Information provided herein or on the website should not be relied upon or used as a substitute for consultation with legal, accounting, tax, and/or other professional advisors.   Since any electronic communication between you and Lazan Glover & Puciloski, LLP through this website will not be privileged or confidential, it may be disclosed to other persons and may not be secure. Accordingly, please do not send any e-mail to the Firm that contains confidential or sensitive information without first speaking with an attorney at Lazan Glover & Puciloski, LLP and receiving permission to do so.

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What to Know About Septic Systems in the Berkshires

If you’ve had a sewer line connected to your home, the whole concept of a septic system might be new to you. You might think that it’s just another kind of sewer. However, the problem is that rules about septic systems in the Berkshires are very detailed and, if there are problems, you own them—not the government. Septic problems can be very expensive to fix.

No one wants to think about septic systems but…

Septic systems are very common in the Berkshires. In some communities, it’s the only choice for handling waste. What’s The Problem?

Septic systems in the Berkshires must pass a Title 5 inspection within two years before a sale. Title 5, Massachusetts’ regulation 310 CMR 15.000, governs septic systems and contains rules that specify how to install, use and maintain these systems.

So, what happens?

We’ve seen it happen all too often: a seller waits until they have a buyer under contract before scheduling the inspection, the septic system fails, and the closing can be extended indefinitely until repairs are made or a new system is installed. A once-friendly buyer and seller become mortal enemies because they can’t agree on the appropriate kind of repairs or time frame for completion.

It gets worse. Eager buyers who are getting a mortgage are often dismayed to learn that the bank won’t fund the loan until they have a passing Title 5 report. Interest rates can change. Sellers may discover that their home is no longer going to sell.

Why would somebody wait for Title 5 inspection?

Sellers are often hesitant to do the Title 5 inspection before they believe that they cannot offer a house for sale that has failed an inspection. Or, the seller is afraid that the Board of Health will make them fix the system immediately if it fails. In reality, if a system fails the inspection, you can offer the house for sale and inform the buyer what you are doing to remedy a problem. An owner has two years to make the required upgrades and can work with the local Board of Health or MassDEP to come to an alternative schedule.

Of course, let’s not assume the worst. It may be easier to sell a home if you have passed the Title 5 inspection. It is one less thing to worry about and to wait for.

What does the Title 5 inspection involve?

The purpose of the Title 5 inspection is to protect groundwater supplies and determine if septic systems in their current conditions can protect public health and the environment. The inspection includes determining the location and condition of cesspools, septic tanks and distribution boxes. It does not guarantee that a septic system will function adequately or that it won’t fail later. The system must be inspected by a MassDEP-approved individual using the MassDEP-approved inspection form. The inspection report must be submitted to the Board of Health within 30 days of the inspection. The buyer of the property with a septic system must also receive a copy of the inspection report.

Inspections generally are good for 2 years. If a property is sold more than once in the 2-year period, the single inspection is valid for all property transfers. If a system is pumped annually and the pumping records are available, an inspection is valid for 3 years. If weather conditions prevent inspection at the time of a sale, the inspection must take place within 6 months afterward, but the seller must provide written notice to the buyer of the need to complete the inspection.  

Conditional pass or failed Title 5 inspection

A septic system in the Berkshires may receive a “conditional pass” if there are certain components that need repair, such as a cracked septic tank, broken pipes, uneven distribution box, or malfunctioning pump chamber. In these cases, the seller must make the appropriate repairs, at which time the Board of Health will issue a Certificate of Compliance.

If a septic system completely fails the inspection, it is the owner’s responsibility to replace or repair the system within two years. If a system fails shortly after a sale, the buyer may have legal recourse, but it may be very hard to prove that the system was in failure at the time of the inspection.

What about mounded septic systems?

A common point of concern among both buyers and sellers is that if a septic system fails Title 5, the owner will be forced to install a “mounded” system, resulting in an unsightly mound or bulge on the property. The Title 5 regulations changed in 1995 to require that the bottom of a septic system must rest four feet above the high-water table which, in Berkshire County, ranges between 12 and 30 inches below ground. As a result, almost all standard septic systems installed after 1995 in Berkshire County are mounded. That is, the bottom of the septic system rests near the top of the ground so sand or soil can absorb the waste before reaching the water table, and the top of the septic system protrudes slightly above ground level.

There are ways to get around an unsightly mound, including grading the area around the septic system so the mound doesn’t appear elevated. Most towns will grant an automatic variance allowing the system to be installed 3 feet, instead of 4 feet, above the water table.

If an owner is willing to spend a bit more money on a tertiary treatment or filtration system, they could be eligible for a 2-foot variance. Massachusetts recently approved a new alternative system called an Elgin System, which is more affordable than any of the other approved alternative systems. Unlike the other systems, it does not require an annual maintenance agreement and only requires 2 feet of separation to groundwater.

Hope this wasn’t a waste of your time…

More Resources

Read more about buying or selling property with a septic system: https://www.mass.gov/guides/buying-or-selling-property-with-a-septic-system

Read the full 310 CMR 15.00: Septic Systems (“Title 5”) here: https://www.mass.gov/regulations/310-CMR-15000-septic-systems-title-5

Disclaimer:  The information contained herein is for informational purposes only. It does not constitute the rendering of legal or other professional advice or services. Your review of this post and/or use of the Lazan Glover & Puciloski, LLP website does not create an attorney-client or confidential relationship between you and Lazan Glover & Puciloski, LLP or any of its attorneys. Information provided herein or on the website should not be relied upon or used as a substitute for consultation with legal, accounting, tax, and/or other professional advisors.   Since any electronic communication between you and Lazan Glover & Puciloski, LLP through this website will not be privileged or confidential, it may be disclosed to other persons and may not be secure. Accordingly, please do not send any e-mail to the Firm that contains confidential or sensitive information without first speaking with an attorney at Lazan Glover & Puciloski, LLP and receiving permission to do so.

What Are Common Closing Costs in Massachusetts?

“What are common closing costs in Massachusetts?” This is perhaps the most common question we get from prospective buyers and sellers. Every transaction is different, so the question is not always easy to answer. However, there are some standard fees that one should expect. Read our list!

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Massachusetts Buyer Closing Costs

  • Recording Fees —Various documents are recorded at the Registry of Deeds at closing. The Commonwealth currently charges (as of September 2022) the following amounts for the following documents:
    • Deed – $155Mortgage – $205Municipal Lien Certificate – $80Declaration of Homestead – $35
    • Certificates and Affidavits – $105
  • Plot Plan — If you are buying a house, as opposed to unimproved land, your lawyer will almost always order a plot plan from a local surveyor to ensure that there are no encroachments on the property. This typically costs between $350 and $500.
  • Title Exam / Abstracting — Your lawyer will order the complete record of recorded documents pertaining to the property from the past 50 years from an abstractor. This typically costs between $300 and $400.
  • Municipal Lien Certificate — This is the tax certificate that shows the exact amount of the property taxes and whether any taxes are owed. Towns and cities typically charge between $25 and $50 per certificate.
  • Adjustments for Property Taxes — Property taxes are pro-rated, so you will pay the seller for any property taxes that have already been paid for the current tax period.
  • Adjustments for Propane/Fuel/Heating Oil — Buyers must pay sellers for any propane or oil that is left in the tank(s). This is calculated based on the current price per gallon and a reading of the gauge a few days before closing.
  • Title Insurance Policy — Title insurance protects owners and their lenders from financial loss resulting from a hidden defect in the title to a property. It is a one-time payment that covers homeowners for as long as they own the property. The payment is a factor of the purchase price of the property. Commonly, it’s calculated as $4.00 per every $1,000, but this can change for properties over $1 million and depends whether a lender’s policy is being issued simultaneously. You should ask your attorney to calculate this for you.
  • Legal Fee — This can vary depending on the purchase price of the property, whether the buyer is getting a mortgage, and whether any special considerations are involved.
  • Bank Fees — If you are getting a mortgage, the lender will charge various additional closing costs. These can vary greatly between lenders. Typical bank fees include underwriting fees, appraisal fees, credit checks, and rate lock fees. Your lender will provide you with a loan estimate when you apply for your mortgage.
  • Homeowner’s Insurance — The premium for the first year is usually paid at closing and can be included in your closing costs. If you are getting a mortgage, your bank will require this to ensure that the home will be insured as of the closing date.
  • Buyers do NOT pay realtors’ commission.

Massachusetts Seller Closing Costs

  • Commission to Realtors — If you are using a realtor, you will have an agreement with the realtor stating the rate of their commission. This is almost always a percentage of the sale price. A listing agent typically splits the commission with the buyer’s agent.
  • Recording Fees — Sellers do not pay to record the deed, but occasionally a seller must record a document at closing, such as a trustee certificate, easement, agreement or affidavit.
  • Transfer Tax (“tax stamp”) — Sellers in Massachusetts are required to pay a “tax stamp” when they sell property. The tax is currently set as $4.56 per every $1,000 of the sale price.
  • Unpaid property taxes, HOA dues, water/sewer bills.  

Want more information on buying and selling homes in Massachusetts? We think you’ll find our our downloadable guides of interest. Click on the images below for The Purchase and Sale Agreement and Realtors, Attorneys, and the Contract.

Buying and Selling a Home in the Berkshires The Purchase And Sales Agreement

About Lazan Glover Puciloski, LLP

Lazan Law has overseen thousands of closings over our 35 year history. And we’ve never been busier! We most frequently work with home buyers and sellers in the Berkshires: Alford, Great Barrington, Hancock, Lee, Lenox, Monterey, North Adams, Pittsfield, Richmond, Sandisfield, Sheffield, Southfield, Stockbridge, South Egremont, Tyringham, West Stockbridge, and Williamstown, as well as communities beyond the Berkshires.

Contact us if you’re about to embark on a home buying journey!

Disclaimer: The information contained herein is for informational purposes only. It does not constitute the rendering of legal or other professional advice or services. Your review of this post and/or use of the Lazan Glover & Puciloski, LLP website does not create an attorney-client or confidential relationship between you and Lazan Glover & Puciloski, LLP or any of its attorneys. Information provided herein or on the website should not be relied upon or used as a substitute for consultation with legal, accounting, tax, and/or other professional advisors.   Since any electronic communication between you and Lazan Glover & Puciloski, LLP through this website will not be privileged or confidential, it may be disclosed to other persons and may not be secure. Accordingly, please do not send any e-mail to the Firm that contains confidential or sensitive information without first speaking with an attorney at Lazan Glover & Puciloski, LLP and receiving permission to do so.

Thoughtful man in blue shirt with blue coffee cup wondering if he needs title insurance

What is Title Insurance in Massachusetts?

One of the most common questions we get from buyers is, “what is title insurance and why do I need it?” Although most homeowners in Massachusetts have title insurance, it remains a mystery to many people. Read on for clarity…and a real life scenario—one property owner had title insurance, one did not.

Thoughtful man in blue shirt with blue coffee cup wondering if he needs title insurance

Quick Overview

Title insurance protects owners and their lenders from financial loss resulting from a hidden defect in the title to a property. It involves a one-time payment (usually at the closing, but a policy can be purchased any time) and it covers homeowners for as long as they own the home.  A title insurance policy is not a guarantee that the title to the particular property is good.  Rather, it is an agreement by a title insurance company to defend the insured if there is a claim of a title defect covered by the title policy and/or to indemnify the insured for actual loss or damage sustained because of a covered title defect. 

An owner’s policy protects you for the purchase price of your home plus legal costs if a title or ownership issue arises. Lenders require buyers to purchase a title insurance policy that protects the lender. Typically, a title insurance company will issue an owner’s and lender’s policy simultaneously for a discounted rate.

R

A Surveyor Made a Math Error…

Years ago, a property owner divided his land into multiple housing lots. The property owner hired a surveyor to prepare a plan that would create the new housing lots and the roads accessing those lots. Unfortunately, the surveyor made a math error when calculating the size of the development and the lots in it. As a result, three of the lots and a portion of the roadway were located on land owned by an abutter. By the time the error was discovered, two separate families had purchased those three separate building lots—but the developer had no right to sell those lots because he never owned the land. In short, neither of the two new “owners” had any rights to the lots they believed they had purchased.

As you can imagine, much angst ensued.

The fate of the two couples became tied to title insurance. One of the couples purchased title insurance when they supposedly purchased their building lot. Their attorney was able to show that the original plan was wrong and that the title defect was covered by title insurance. This couple received all of their purchase money back from the title insurer.

The second couple had purchased their property in cash and had not purchased title insurance. This couple was unable to recover their money from the developer or the surveyor, and thus they were out the money they had saved to build their retirement home. So…

Do I need title insurance?

Yes. In our experience, the time, money, and aggravation saved by purchasing a title insurance policy is worth vastly more than the one-time premium payment.  A title insurance policy covering the lender does not protect your interest in the property; it only protects the money owed to the lender.  In order to protect yourself, you need to purchase an owner’s title policy.

What does title insurance cover?

Unlike traditional insurance, which protects against future events, title insurance protects against claims for past occurrences, such as forged or improperly recorded deeds and mortgage discharges. When you become the owner to a property, you also become the owner (so to speak) of any title problems.  A lawyer’s title exam will look back at the previous 50 years and should uncover any outstanding liens, for instance, but even the best title examiner may not be able to identify certain defects that are not evident from the records in the Registry of Deeds.

Examples of common title defects:

  • Claims of ownership by another party;
  • Undisclosed or missing heirs;
  • Lack of a right of access to and from your land;
  • Unresolved homesteads;
  • Unresolved probate claims;
  • Lost or incorrectly recorded documents (e.g., deeds, mortgages, mortgage discharges);
  • Fraud. This can take many forms, including falsified mortgage discharges;
  • Mechanic’s liens. Unpaid contractors, homeowner association dues or property taxes can result in liens on the property;
  • Restrictive covenants
  • Easements not referenced in the 50-year title search period;
  • Encumbrances or judgments against property;
  • Unmarketability of title.

My title exam came back clear… does that mean I don’t need title insurance?

In Massachusetts, lawyers are required to examine title going back fifty years unless there is something in the last 50 years that suggests an earlier title question. Even the most skilled title examiners may not find all problems associated with a property. Some risks, such as title issues due to recording errors, forgeries, or undisclosed heirs, are impossible to identify.  If there are problems with a title that occurred prior to the lawyer’s search, those problems still exist and can, on occasion, cause problems in the future.  Title insurance will protect you from title defects occurring before the 50-year lookback period.

Am I Required to Have Title Insurance?

If you borrow money from a bank to purchase your property, you will be required to purchase a title insurance policy for the bank, but it is your choice whether you purchase a policy for yourself.  There is no law requiring you to purchase any title insurance on your home and land, but we would be remiss if we didn’t encourage you to protect your investment by purchasing a title insurance policy. When you purchase a home and receive the deed to the property, you become the official owner of the property.  In addition to purchasing what you can see, you may unknowingly be purchasing hidden claims on the property that are attached to the title of the property.  The cost of the insurance is a fraction of a homeowner’s investment in the property.

Why Doesn’t My Homeowners Insurance Policy Cover Me in Case of a Claim?

Home insurance policies and umbrella policies cover you in the event of physical damage to your property or for claims filed for damages to others after the policy is in place.  These other policies do not cover claims against the title of your home or other claims that are from before you received title to the property. Lazan Law has overseen thousands of closings over our 35 year history. And we’ve never been busier! We most frequently work with home buyers and sellers in the Berkshires: Alford, Great Barrington, Hancock, Lee, Lenox, Monterey, North Adams, Pittsfield, Richmond, Sandisfield, Sheffield, Southfield, Stockbridge, South Egremont, Tyringham, West Stockbridge, and Williamstown, as well as communities beyond the Berkshires.

Disclaimer:  The information contained herein is for informational purposes only. It does not constitute the rendering of legal or other professional advice or services. Your review of this post and/or use of the Lazan Glover & Puciloski, LLP website does not create an attorney-client or confidentil relationship between you and Lazan Glover & Puciloski, LLP or any of its attorneys. Information provided herein or on the website should not be relied upon or used as a substitute for consultation with legal, accounting, tax, and/or other professional advisors.   Since any electronic communication between you and Lazan Glover & Puciloski, LLP through this website will not be privileged or confidential, it may be disclosed to other persons and may not be secure. Accordingly, please do not send any e-mail to the Firm that contains confidential or sensitive information without first speaking with an attorney at Lazan Glover & Puciloski, LLP and receiving permission to do so.