In Connecticut, real estate transactions are governed by a set of strict rules and regulations, with a unique emphasis on attorney involvement. The following guide provides a comprehensive overview of the key aspects of Connecticut real estate transactions, ensuring compliance with state laws.
Title Searches and Examinations
Connecticut law mandates that all land titles be checked back forty years to ensure a marketable title, as specified in Conn. Gen. Stat. § 47-33f. The standard for a complete title search is a forty-year history to identify a “root deed.”
Title insurance policies and endorsements follow the American Land Title Association (ALTA) forms. Title insurance rates do not include search and examination costs. Special rates are available for reissue lenders, bulk rates, and governmental and charitable organizations. Connecticut law stipulates that title insurance agents must be practicing attorneys unless they held a valid title insurance license on or before June 12, 1984. Title insurance rates must be filed with the Insurance Commissioner, as Connecticut is a filed rate state. Insurers cannot pay title insurance agents more than 60% of the gross policy premium and cannot increase an agent’s commission by providing anything of value below market cost (CGS § 38a-415(b)).
Non-resident title agencies cannot conduct title operations in Connecticut. Mortgage companies using national title agencies must ensure compliance with Connecticut law.
Certified copies of death certificates should be requested from municipal health departments in the city where the decedent died or last resided.
Land record documents are recorded at the City Clerk or Town Clerk offices in Connecticut’s 169 cities and towns. The Marketable Title Act (Conn. Gen. Stat. § 47-33a et seq.) is incorporated into the Connecticut Standards of Title of the Connecticut Bar Association.
Vesting and Ownership
Connecticut recognizes tenancies in common and joint tenancies. The non-titled spouse is not required to join in executing the security instrument. Conn. Gen. Stat. § 47-14a requires specific language to create survivorship in conveyances. Estates in joint tenancy can be held in unequal shares and are available to any two or more persons, not limited to married couples (Conn. Gen. Stat. §§ 47-14a through 47-14k).
Connecticut law provides a homestead exemption protecting the equity of a debtor’s home, up to $75,000 or $125,000 for judgments arising from hospital services (Conn. Gen. Stat. § 52-352b).
A conveyance is typically made by warranty deed or quitclaim deed, requiring signatures of the parties, two witnesses, and an acknowledgment. Divorce or marriage dissolution converts a joint tenancy into a tenancy in common unless specified otherwise (Conn. Gen. Stat. § 47-14g).
Decedents’ Estates
If a decedent’s net estate exceeds exemption amounts, a succession tax is payable, and the State of Connecticut acquires a lien against the property. This lien arises at the moment of death and is indefinite in duration (Conn. Gen. Stat. § 12-344).
Mortgages, Liens, and Foreclosure
Connecticut is considered a title theory state despite its lien theory elements, as the mortgage document operates similarly to a deed of trust. Judgment liens expire after twenty years unless renewed. Sellers financing part of the sale price have no special statutory protection. Release of mortgage must be recorded to cancel liens, with penalties for non-compliance after 60 days (Conn. Gen. Stat. § 49-8).
Claims require fifteen years of exclusive, continuous, hostile, and open possession (Conn. Gen. Stat. § 52-575).
Foreclosures are typically judicial, taking a minimum of 180 days. There is no redemption period after sale (Conn. Gen. Stat. § 47-116 et seq.). Lawyers’ certificates of title have a two-year statute of limitations from defect discovery, not exceeding ten years from certificate delivery (Conn. Gen. Stat. § 52-584b).
Real Estate Closings
Real estate closings and document preparation must be conducted by attorneys. Closing costs are negotiable between buyer and seller, and a power of attorney is permitted. The customary security agreement is a mortgage.
Connecticut recognizes common law forms of deeds with statutory formalities of two witnesses and an acknowledgment (Conn. Gen. Stat. § 47-36c). Payment of loan proceeds must be by certified, bank treasurer’s or cashier’s check, or wire transfer (Conn. Gen. Stat. § 36a-758).
Recording Regulations
Connecticut is a notice recording jurisdiction. A conveyance, including a mortgage, is effective upon delivery to the grantee and must be recorded within a reasonable time (Conn. Gen. Stat. § 47-5).
Property Taxes
Real property taxes are levied by towns annually, due on July 1, with options for annual, semi-annual, or quarterly payments. Delinquent taxes incur 1.5% monthly interest. Taxes are assessed in October, becoming a lien against the property, payable in July of the following year, with various payment systems across towns.
Some towns impose additional taxes such as fire district taxes, and water and sewer districts have assessment rights and user charges.
Connecticut’s real estate transactions are highly regulated, with a strong emphasis on attorney involvement. Understanding these regulations is crucial for compliance and smooth transaction processes.
Contact us now for further details on how Kaplan Ditrapani & Faria can help you overcome the unique challenges of Connecticut’s real estate market!
