January 2003 Law Ends Need to Record Most Real Estate Trusts in Massachusetts
A law effective in January, 2003, eliminates the
requirement of recording trusts. This legislation, Chapter 508 of the Laws of 2002, brings Massachusetts practice in line with all other states in the nation. Prior to the amendment, the statute required that a trust had to be recorded before it could take title to realty. Failure to record a trust created an indefinite reference. Under the new law when property is conveyed to or held in the name of a trust only a trustee's certificate needs to be recorded.
Specifically, the legislation amends Chapter 184 of the Massachusetts General Laws by adding a new Section 35. This section provides that, despite the provisions of the Section 25 (the indefinite reference statute), a good faith purchaser may rely on a trustee's certificate as to the identity of the trustees or beneficiaries, the authority of the trust to act or other facts germane to the affairs of the trust. Further, the new law amends Section 2 of chapter 203. The old Section 2 had provided that a trust concerning land had to be recorded in the Registry of Deeds or Land Court Registry District in order to impart notice of the trust. The amended Section 2 provides that either the recording of the trust or the recording of a certificate conforming to the requirements of the new Section 35 of chapter 184 shall impart notice.
Taken together these two changes in the statutes effectively eliminate the need to record a trust in most situations. A problem could arise because the statute states that the certificate is to be signed by a trustee “of record”. What happens in the case where the trustee named in a deed dies or becomes unable or unwilling to serve? Without the trust on record there is no way of determining how a successor trustee can be appointed. A stranger to the title signing a certificate and claiming to be new trustee would not meet the requirements of the statute.
In light of the foregoing, it seems likely that very few trusts will now be recorded. Given the increase in Registry fees in March, 2003, raising the cost of recording a trust to $275, there seems to be little reason to incur this expense in light of this new legislation. By simplifying the procedure for a trust to hold title in most transactions the new legislation offers welcome relief for conveyancers.