4. TITLE. Said premises are to be conveyed on or before _______________________ by a good and sufficient Deed of the SELLER which shall be a Deed of equal character and covenants as held by the SELLER, conveying a good, clear, record and marketable title to the same, free from all encumbrances, except:
a. Usual public utilities servicing the premises, if any;
b. Taxes for the current year not due and payable on the date of delivery of the Deed;
c. Any liens for municipal assessments and/or orders for which assessments may be made after the date of this Agreement;
d. Restrictions and easements of record, if any, which do not materially affect the value or current use (single family and/or ) of the premises;
e. Provisions of existing building and zoning laws. Here is the first indication of when the closing will take place.
Aside from that important date, the quality of the title to be transferred is also defined. The practice is to “give what you get” with regard to the quality of the title, i.e., a deed of “equal character”. This paragraph is referring to the covenants or legal promises that seller gives with the deed. For example, if in MA you receive a deed with “warranty” covenants you will give a deed with “warranty” covenants to the Buyer of your property under the terms of this contract.
The paragraph also indicates that the title will be “clear record and marketable title, to the same, free of all encumbrances”. This means not only will there be no liens on the property, but if any rights were given away – easement rights, rights of way, etc, that were not disclosed, or not properly recorded, Buyer may withdraw from the transaction. Recall in paragraph 2 we discussed the importance of noting all of the encumbrances listed on the deed – those are already agreed upon!
The exceptions to the clear title rule that we area agreeing to follow are indicated in sub-paragraphs a-e. Essentially, utilities, taxes and municipal obligations must be current at the time of closing, but Seller will be obligated to pay these items going forward. Zoning bylaws are considered to have been reviewed and are not an issue that the Buyer may raise after they have signed the contract. Restrictions and easements of record that do not materially effect the use of the property as indicated in this sub-paragraph can be an item of contention. If you know about an encumbrance or obligation that the property has, it is best to disclose this item and have the Buyer sign off on the description of this item prior to signing the contract if possible.
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