Residential Real Estate

Saving the dream home

The recently married couple found the perfect condominium. It was in Boston’s South End, close to work and embedded in the community they loved. After some intense negotiations, the nearly million-dollar unit was under agreement. The couple looked forward to moving in and living the dream, until the process became a nightmare.

When I told them what we had found, they were devastated, said Stephanie Petty, an attorney in the real estate group at Brooks & DeRensis. The deed was not marketable. The seller did not legally own the condominium.

In fact, none of the owners of the four-unit project actually owned their condominiums. A decade before, when the developer purchased the brick townhouse to renovate it for luxury condominiums, he did not realize the property was still entangled in a prior foreclosure. The developer did not have clear title, so the master deed created for the new condominiums was invalid.

During the years since the initial condominium project was established, there had been numerous transactions, units bought and sold, but no one had found this flaw in the title. In fact, we counted almost fifty instances where an attorney and/or title examiner should have noticed the title issue, Petty said.

With smaller developments many real estate lawyers and title examiners start their title process at the point when the condominium master deed was first drawn. It is a common shortcut that can be risky. I always do a complete title search, as far back as we can go. We never start at the master deed and go forward because we know what can happen. You must make sure the condominium project was created legally, Petty said.

When the title defect was found the couple could have recouped their deposit and walked away from the deal. But they loved the property and Petty charted a realistic course to fix the problem. I guided my buyers through everything that could go wrong. They understood the risks and were willing to go through with it, Petty said. We also had to work closely with the mortgage lender, so that it had enough confidence to go ahead with the closing while we worked out this title problem.

Fortunately, the seller did buy title insurance when it purchased the unit, so the title insurance company had an obligation to correct the problem. It took two years, but Petty kept the process on track and the matter was settled successfully in Land Court, with a new confirmatory master deed for the project and each unit owner.

Since then, the couple has sold their South End unit, purchased another condominium in the Jamaica Plain section of Boston, and most recently sold that property to buy a single-family home in a Boston suburb. All along the way, Petty has remained their attorney.

Now the two dads have twin daughters, and I am helping them with estate planning for the family, Petty said. Building relationships with people and helping them with some of the most significant life-events they face is the real satisfaction of this work.