In order to insure a smooth closing, Sellers should be aware of the following:
- 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. Most closing attorneys will send you a form to sign releasing this information to them and will make the necessary arrangements for paying it off. After your mortgages have been paid in full, the banks will send the closing attorney your discharge(s) which they are required to 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 loan company), closing agent will require that the payoff amount be furnished to them before the closing and a discharge be delivered at or before the closing. The obligation to furnish a discharge at closing applies also to outstanding attachments or other liens, if any.
- DEED: The preparation of a new deed to convey the premises to the buyer is the seller’s responsibility. You should have your attorney send a copy of the proposed deed to the closing attorney before the closing date.
- SMOKE DETECTOR AND CARBON MONOXIDE COMPLIANCE: Under the provisions of Massachusetts General Laws, Chapter 148, Section 26E a current certification from the city or town fire department relative to the installation of smoke detectors and carbon monoxide detectors must be obtained on any transfer of property. You should contact your local fire department, arrange for an inspection, obtain a certificate of compliance and bring it with you at the time set for closing.
- ELECTRICITY, WATER, SEWER, FUEL: If your electricity is provided by a municipal light plant, you must provide the closing attorney with a final electric reading. Similarly, your fuel oil readings (if your property is not a condominium).
- 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.
- REGISTERED LAND: If your property is registered land, be certain to bring your Owner’s Duplicate Certificate of Title to the closing. Your property cannot be transferred and papers cannot be recorded without it.
- POWER OF ATTORNEY: If there is a power of attorney involved, you will need to provide the closing attorney with a copy of the power of attorney document prior to the closing. Ordinarily, the use, form and content of the power of attorney will have to be reviewed and approved by the closing attorney and lender, if any.
- 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 insureds, the buyer and lender. The trustees of the condominium trust can assist you in this matter.
- SALE PROCEEDS: Your funds will not be released to you until the deed and mortgage have been recorded at the appropriate Registry of Deeds.
- TRUST OWNERSHIP: If this property is owned by a trust, the closing attorney will require 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. In addition, the statement should be acknowledged before a notary public and be in the form suitable for recording.
- 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. At closing you will be asked to sign a form and provide your Social Security or Federal Identification Number.
- TITLE EXAMINATION: Please note that if, as the result of searching the title or obtaining the plot plan and municipal lien certificate, it is discovered that there are any deficiencies or defects, it will be 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.
- 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. When applicable, there is no exception to this requirement, and it is therefore incumbent upon you to coordinate scheduling of the passing not only with the closing attorney but with the buyers and brokers as well.
- FINAL WATER READINGS ARE REQUIRED: A final water reading must be ordered by you from the Water and Sewer Commission of your town or city so that all outstanding water and sewer bills may be taken care of at the closing. If you are selling a condominium unit, it is likely that water and sewer charges are included in the monthly condominium fee. In that case, a final water and sewer bill is not required. If electricity is provided by a municipal light plant, you should obtain a final electric reading.
- CORPORATIONS 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) Certificate of Legal Existence from the Secretary of State and 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;
c) For corporations: a certificate from the Clerk of the corporation attesting to the adoption of a vote by the Board of Directors, authorizing certain officers to sell the property and to execute the deeds and all related documents therefore; and
d) For corporations: if applicable, a similar certificate from the Clerk of the corporation attesting to the adoption of a vote by the holders of at least two-thirds (2/3rds) of the voting stock of such corporations, said vote to authorize the sale of the property by certain officers; (see M.G.L. Chapter 156B, Section 75).