How to Reduce Home Seller Liability

Please welcome guest author Ed Englander – Ed Englander is a partner in Englander, Leggett & Chicoine, P.C., a Boston law firm with particular expertise in land use and real estate issues.

In today’s competitive real estate market, buyers are writing heart-warming letters to sellers about why they would be the best owners for the treasured family homestead. Sellers with a handful of competitive offers are often making decisions based on their interactions with the prospective buyers. Emotions are trumping the fact that selling a home is a sophisticated legal transaction and should be treated as such.

Much as they may like to get to know the buyers of their treasured family homestead, sellers should keep their distance. Friendly banter between buyer and seller could result in legal headaches down the road for the sellers.

Sample Legal Case

I recently defended the seller in this case:

In 2006, the Fowlers (a fictitious name) put their home of 35 years on the market. The history of the Fowlers’ connection to this land dated back to the 1930s, when Mr. Fowler’s father purchased a farm. Mr. Fowler had been raised on the farm, portions of which had been used for various activities over the years including a pig farm and a town dump from 1955 to 1978. In the late 1960s, Mr. Fowler’s father carved out a roadside house lot from the farm and deeded it to his son. Mr. Fowler built a home for his family on the lot.

While this home was on the market, the Fowlers felt it was important to be present for every showing to keep their dogs under control. During one of the showings, a prospective buyer chatted with Mr. Fowler while he was minding his dogs in the breezeway. The potential buyer asked, “What was all that land?” Mr. Fowler answered by pointing out the old farm house where he had grown up and told the buyer that the property used to be his father’s pig farm. Mr. Fowler never mentioned that part of the property had been used as the town dump from 1955 to 1978.

The potential buyer subsequently purchased the property in August 2006. The Fowlers moved on to Florida. The buyers sued the sellers in 2008, in Massachusetts, for claims of fraud, intentional infliction of emotional distress and civil conspiracy — all because Mr. Fowler shot the breeze in the breezeway and he failed to disclose the adjacent farm had been used as a town dump in the course of the conversation.

The sellers had no choice but defend the lawsuit which, after five years of discovery and motions, went to a jury trial in the Norfolk Superior Court. After five days of trial and two days of deliberation, the jury returned a verdict for the Fowlers because the buyers did not reasonably rely on the conversation in the breezeway.

Simple Steps to Reduce Seller Liability

Loose lips really can sink ships in real estate transactions. The best way to minimize seller liability is to keep the buyer/seller relationship as formal and separate as possible. I recommend that:

  1. Buyers and sellers never meet in person;
  2. Buyers should be informed by the seller’s real estate broker if the buyer has a question they deem important. The question should be asked in writing and the seller should answer in writing; and
  3. Attorneys for sellers should add a clause to the purchase and sale agreements that states “any questions the buyer(s) have deemed important have been asked in writing and the seller(s) have answered those questions in writing, and attached are copies of the questions and answers.” If the buyer(s) have asked no questions then the purchase and sale agreement should state “The buyer(s) have asked no questions.”

MA Declaration of Homestead

In preparing for a recent closing on a refinance, it came to my attention that the Borrower did not have a Declaration of Homestead. A simple fix, but it is surprising how many property owners hold title without the protection afforded by the statute. Under Massachusetts law, an individual may declare a homestead in their principal residence thereby protecting up to $500,000.00 in their home from unsecured creditors (see General Laws of Massachusetts Chapter 188, Section 1).

Example: Joan owns a home, which is her primary residence, and has recorded a Declaration of Homestead. Joan’s credit card company seeks to attach $10,000.00 in credit card debt which Joan contracted for and defaulted on subsequent to the recording of the Declaration of Homestead. The credit card company would be barred from attaching this debt under the statute. It should be noted that Joan is still liable for this debt, but her interest in the property is protected.

Example 2: Dan owns a home, which is his primary residence, and has recorded a Declaration of Homestead. Dan has taken out a second mortgage with his local credit union. Dan then defaults on his second mortgage. In this example, the statute will not protect Dan. The credit union holds a security interest in the property and therefore is a secured creditor who would be exempt.


  • A Declaration of Homestead protects the investment in one’s primary residence from the claims of unsecured debts up to a maximum of $500,000.00.
  • The Declaration of Homestead must be filed with the appropriate Registry of Deeds.
  • A Declaration of Homestead will not protect a homeowner from the following: (i) tax assessments, claims and liens; (ii) first and second mortgages; (iii) an execution issued by the Probate Court to enforce a judgment for support; (iv) court judgments based on fraud, mistake, duress, undue influence, or lack of capacity; and (v) debts contracted prior to the recording of the Declaration of Homestead.

Condo Super Lien Bill

In 1992, the Massachusetts legislature provided condominium associations (more commonly known as HOAs) throughout the Commonwealth with a powerful tool, the so called “Condo Super Lien Bill” (M.G.L. c. 183A § 6). Under this law, condominium associations can enforce a lien against condo owners who fail to pay their condo fees. The lien for these unpaid condo fees, as well as attorney’s fees and the cost of collection, have priority over the first mortgage. In order to achieve priority; however, the statute requires that the owner and first mortgagee (i.e. the bank/lender) be provided with a notice once the fees are 60 days delinquent. This first notice is commonly referred to as the 60 Day Notice. A second notice, known as the 30 Day Notice, is then required 30 days prior to filing the lien foreclosure action. The 30 Day Notice is sent only to the lender. Should the unit owner and lender fail to pay the outstanding condo fees, the court may order a lien enforcement sale of the unit. The buyer at the lien enforcement sale would take the condo free of the first mortgage. Clearly lenders will want to avoid this situation and so most every mortgage includes a provision allowing the lender to pay outstanding condo fees on behalf of the unit owner.

In the typical case, when all is said and done the condominium association has collected the outstanding fees, the lender has protected its interest (in the real property) by paying the outstanding fees, and the offending unit owner is left having to repay his lender the condo fees as well as any collection costs and attorney’s fees.

If you are a condominium association in need of assistance with respect to outstanding condo fees, please consult with a Boston real estate attorney before beginning the process to ensure that the statutory requirements of the Condo Super Lien Bill are met.