The MA Homestead Act Changes: Home Sweet Homestead

An icon from the Crystal icon theme.

Image via Wikipedia

We’ve noticed an uptick in phone calls to our insurance agency,  inquiring about the recent changes to the Massachusetts Homestead Act.  Customers are wondering if they need to make any changes if they already have a Declaration of Homestead filed for their primary residence. New home buyers  or customers refinancing their mortgages are questioning if they need to file documents to obtain any protection. 
Massachusetts and many other states put Homestead laws in place to protect homeowners from losing their primary residences if they have no other assets available to pay their debts.  Under the previous Homestead law, homeowners and their families could protect up to $500,000 of home equity from many types of creditors if they filed a simple Declaration of Homestead at their Registry of Deeds.  Under both the old and new law, if a homeowner records the Declaration of Homestead  before a creditor files a lien against his property, the creditor cannot recover the debt by forcing the homeowner or his family to sell their home as long as the amount of the debt or debts are under $500,000. The Homestead Act does not protect homeowners from debts owed for mortgages, child support and condo association fees.

Here is a summary of the Massachusetts Homestead Law effective March, 2011. The changes were made to reduce ambiguities under the previous Homestead law: 

  • All Massachusetts homeowners receive an automatic homestead exemption of $125,000 for protection against certain creditor claims on their principal residence without having to do anything.
  • All Mass. residents are eligible for a $500,000 “declared homestead exemption” by filing a declaration of homestead at the Registry of Deeds. For married couples, both spouses will now have to sign the form–which is a change from prior practice.
  • If you already have a homestead recorded at the Registry of Deeds, you do not have to re-file it. You are all set, and have the full $500,000 protection.
  • Homesteads are now available on 2-4 family homes, and for homes in trust. This is also new.
  • The existing “elderly and disabled” homestead will remain available at $500,000.
  • If you have a homestead as a single person, and get married, the homestead automatically protects your new spouse. Homesteads now pass on to the surviving spouse and children who live in the home.
  • You do not have to re-file a homestead after refinance. There’s always been confusion here, with lenders requiring homeowners to either subordinate or release homesteads. Under the new law, homesteads are automatically subordinate to mortgages, and lenders are specifically prohibited from having borrowers waive or release a homestead.
  • Closing attorneys in mortgage transactions must now provide borrowers with a notice of availability of a homestead.
  • The cost of filing the Declaration of Homestead is $35 and it must be notarized. Need a notary? Our insurance agency offers free notary services. You can file the document at the Registry of Deeds or  an attorney can file the declaration for you.  

 Hope you find this information helpful. It is not designed to provide any legal advice-as in all areas of the law, to fully understand your rights, you should consult an attorney of your choice.

For more information, here’s an excellent question and answer document.

Kasey McCarthy
CPCU, Andrew G. Gordon, Inc.

Advertisements

Appealing a Surcharge

 

Before you start the process of appealing a surcharge, it is important to first understand how the Merit Rating Board and Safe Driver Insurance Plan (SDIP) work.

 The Merit Rating Board:

All Massachusetts auto insurance companies are required to report at-fault accidents and out-of-state driving records to the Merit Rating Board (MRB). The MRB is the state agency that maintains driving records.
The MRB driving record consists of surchargeable incidents. A surchargeable incident is any event in which you are:

  1. Convicted of, or pay a fine for, a motor vehicle violation
  2. Assigned to an alcohol education program or controlled substance treatment or rehabilitation program
  3. Found to be more than 50 percent at fault for an accident, and your insurance company makes a claim payment above a certain threshold

If you decide not to pursue an appeal, the surcharge can increase your premium and SDIP step.
In addition, each surchargeable incident counts toward possible license suspension.

You are considered to be more than 50 percent at fault in an accident if your insurance company:

  1. Finds you at fault according to one of the 19 At-Fault Standards  and
  2. Has paid a claim of more than $500 for Collision, Limited Collision, Damage to Someone Else’s Property, or Bodily Injury to Others.

Safe Driver Insurance Plan (SDIP)
The Safe Driver Insurance Plan (SDIP) is mandated by state law to establish classifications of risks to fairly reflect the driving records of insureds and adjust premiums based in part on at-fault accidents. The Plan encourages safe driving by rewarding drivers who do not cause accidents or incur traffic law violations with a credit to their automobile insurance premiums, and discourages unsafe driving by requiring high-risk drivers to pay a greater share of insurance costs. Massachusetts, unlike many comparable jurisdictions that afford no or limited due process rights, provides the right to a hearing before an impartial hearing officer of the Board.

If you believe that you are not more than 50% at-fault for an accident in which you received a surcharge, you may appeal the motor vehicle accident surcharge to the Division of Insurance Board of Appeal.

Your insurance company will mail you a Notice of Surcharge.

  1. If any of the information listed on the Surcharge Notice is incorrect (name, driver’s license number or date of accident), contact the issuing insurance company to make the corrections before appealing.
  2. If you do not receive a Surcharge Notice or misplace it:
  3. Contact your insurance agent for a copy of the Surcharge Notice     OR
  4. Request a late appeal from the Merit Rating Board.
  5. Complete the Surcharge Appeal Form located on the reverse side of the Notice of Surcharge.
  • The appeal must be filed within 30 days of the surcharge date.
  • If you did not submit your appeal within 30 days because you never received a Surcharge Notice, you must obtain a Late Appeal from the Merit Rating Board. The Board of Appeal must receive the Late Appeal within 30 days of your policy renewal.
  1. Submit a $50.00 check or money order payable to the Commonwealth of Massachusetts/Board of Appeal.
  • The fee is non-refundable.
  1. Mail your appeal to the post office box designated on the application. Late appeals must be sent directly to the Division of Insurance, Board of Appeal.
  2. Upon receipt of your surcharge application, the Board will mail you a postcard to acknowledge your appeal. Your cancelled check will serve as an additional receipt of your filing.
  3. The Board will mail you a Notice of Hearing approximately 3 weeks prior to your hearing date.
  4. Appeal hearings are scheduled in Boston, Brockton, Cambridge, Peabody, Plymouth, Somerville, Springfield, Waltham, or Worcester. Carefully note the location of your hearing listed on the Notice. Directions are included at the bottom of the Hearing Notice.
  5. Upon receipt of the Hearing Notice, you have three options for which to pursue the appeal:
    1. Appear in Person.
      Bring your Hearing Notice to the scheduled location.
      Bring copies of all relevant information, any documents/photographs etc. that you want the Hearing Officer to consider when making the decision.
    2. Submit a Written Statement in lieu of your appearance.
      The Board must receive your written or typed statement via mail or facsimile at least 5 days priorto your hearing. The statement must include:
      • copies of all relevant information, any documents/photographs etc. that you want the Hearing Officer to consider in making the decision
      • your signature on the Hearing Notice that identifies you are waiving a personal appearance in favor of your written statement & affirms that your statement is truthful.
    3. Select a representative to appear on your behalf.
      If you elect to submit a written statement via a representative, instead of appearing in person, it must include:

      • Copies of all relevant information, any documents/photographs etc. that you want the Hearing Officer to consider in making the decision
      • your signature on the Hearing Notice that identifies you are waiving a personal appearance in favor of your written statement & affirms that your written statement is truthful.

The hearing is informal and public, lasting approximately 20 – 30 minutes. The Hearing Officer will make an audio tape recording of the hearing. You and your insurance company representative will be given an opportunity to present all pertinent information. You may also bring a witness or a witness statement to the hearing. The Hearing Officer may ask you or the representative questions to clarify the information presented or the circumstances of the accident.

At the conclusion of the hearing, the Hearing Officer will take your appeal under advisement. The facts and circumstances presented will be reviewed in accordance with the governing laws and regulations.

The Memorandum of Finding and Order, the Board’s decision, will be mailed to you within 2-4 weeks. The Board will also contact the Commonwealth’s Merit Rating Board and your insurance company so that your driving history record will be properly updated.

  • If the decision is marked VACATE, the Board has found that you were not more than 50% at-fault for the accident. Any points that you received on your driving record as a result of the accident will be removed.
  • If the decision is marked UPHELD, the Board has found that you were more than 50% at-fault for the accident. The surcharge points will remain on your driving record.

If you disagree with the determination of the Board, you may appeal the decision to your county’s Superior Court or in Boston Suffolk County Court. You must file this appeal within 30 days of your receipt of the decision.
A surcharge incurred due to a traffic violation or a non-moving violation are not appealable to the Board…

Bill Cordaro
Commercial Accounts
Andrew G. Gordon, Inc.

Andrew G. Gordon Insurance: April 2011

Boston Massachusetts: Copley Square

Image via Wikipedia

April is a month that welcomes spring with its famous “showers that bring May Flowers”.  With weather that changes from day to day, April is a fickle month with temperatures ranging anywhere from 15º to 80º that always includes the possibility of a late-season snow storm.  In spite of it all, the crocuses and daffodils manage to bloom and remind us that the warmer half of the year is ahead.

One of the infamously less appreciated events in April is the dreaded holiday known to most Americans as “income tax day”.  This year, however, due to the Patriot’s Day holiday, the filing deadline is extended to April 19th.

A short side note: Patriots Day is a celebration of the beginning of the American Revolutionary War between the British and the Colonial Americans which began on April 19, 1775.  Both Massachusetts and Maine celebrate the holiday on the third Monday in April (nearest to the 19th).  As such, a reenactment of the battle is annually held on Lexington Green, with a mid-morning parade in Concord featuring fife and drum bands.  But, if you plan to attend, it’s best to get there early to get a good vantage spot.  And don’t forget to take advantage of the several pancake breakfasts hosted by area churches.

April also offers the Boston Marathon, the oldest marathon in the world – founded in 1897.  It too, is held on the 3rd Monday in April during the Patriots Day holiday. The race begins in Hopkinton and ends at Copley Square in Boston, a total of 26.22 miles.  About 20,000 runners from around the world take part.  The first starters are the wheelchair runners.  Next are the Elite Women, then the Elite Men and then wave after wave of other runners.  The race lasts most of the day, with some runners straggling in after dark.

And, of course, for you fishermen out there, April is the opening of the Cod fishing season in Massachusetts!

Have a great April!

Sandi C.
Andrew G. Gordon, Inc.
Insurance & Risk Management