Owning property in a trust, or having a trust as an entity that made loans secured by real property, at one point was downright impractical. One solution was recording the entire trust document. This was expensive and really divulged much more personal and financial information than most people wanted to disclose. There was also the nominee trust route, which permitted the underlying trust to be the beneficiary of a nominee trust which was recorded with a not small recording fee of $225.00.
This being the case, you can understand why real estate practitioners, investors and individuals were pleasantly surprised by Chapter 508 of the Acts of 2002, which added the current Chapter 184, Section 35 of the Massachusetts General Laws. This well written law has taken the "sting" out of acting in a trust capacity, both from a financial point of view and for ease of operations.
In a word, Chapter 184, Section 35 has provided the "Easy" button for transactions which at one time were complicated. In order to own property in a Trust, or be a Lender who is a Trust, a Certificate needs to be filed in the appropriate registry of deeds. [recording fee is $75.00]. This Certificate needs to include the following:
•1. The identity of the Trustees or the Beneficiaries under the Trust;
•2. The authority of the Trustees to act with respect to real estate;
•3. The existence, or non-existence, of a condition precedent to acts by the Trustees {normally addressed and discarded because such a condition does not exist]
Once this Certificate is on record the Trust can operate, and any acts taken by the Trustees "shall be binding on all trustees and the trust estate in favor of a purchaser or other person relying in good faith on the Certificate".
Voila!!! Trusts can own property, inexpensively and without divulging important information. Ditto investors. There is no bad news connected with this statute, only progress. If any of you want advice in this area, give me a shout. Many, many doors have opened as a result of this statute. I think that is what laws are supposed to do; make it easier to enter into favorable transactions, without archaic restrictions.
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