CT Underwriting Summary

Search/Exam

• Minimum Search Requirements -- The minimum period of time for a title search is forty years back to a root deed pursuant to the Marketable Record Title Act, Conn. Gen. Stats. §47-33b. By custom and underwriting practice, shorter search periods are generally used for refinance transactions or residential purchases.
• Plant or other search restrictions -- CT Attorney only
• Additional Requirements for REO Searches -- Foreclosure review (court file)
• Foreclosure Checklist -- When property is being sold out of foreclosure.
• Special Searches Required (Code, HOA, Utilities)? -- Taxes provided as part of title search. Water and sewer collected by closing attorneys.
• Survey Requirements (Residential property) -- Owners – affidavit required except for Homeowners' policies; Loan policy – no
• UPL Hot Button Issues -- CT Attorney only

UPL

By custom and statute, settlements are conducted by attorneys. No person may conduct a "real estate closing" except an attorney admitted to practice in the State of Connecticut. Conn. Gen. Stats. §51-88a.

Conveyance instruments are drawn by attorneys. Only attorneys licensed to practice law in the State of Connecticut may be title agents. Conn. Gen. Stats. §38a-402(13).

A non-attorney may not issue a Certificate (opinion) of Title, but title searches are customarily conducted by non-attorneys.

The following tenancy types are recognized: • Individual • Tenancy in common (default) • Joint tenancy with right of survivorship. The phrase "as joint tenants" creates a joint tenancy with right of survivorship. C.G.S. §47-14a. • Life estate • A grantee of a title held by a trustee does not need to review the trust or confirm compliance with internal trust requirements (unless trust or details recorded or provided) and is not liable for the claim of any undisclosed beneficiary. See C.G.S. §47-20.

Acceptable instruments for transferring ownership on real property: Warranty Deed, Special Warranty Deed, Quit Claim Deeds, Trustees’ Deeds, Executors' Deeds.

Witness Requirements

C.G.S 47-5 requires 2 witnesses on deeds and mortgages and acknowledgment before a notary. However, deeds and mortgages executed in another state in conformity with the laws of that state relating to the conveyance of real estate in that other state, are considered valid. C.G.S. §47-7.

The Validating Act, C.G.S. §47-36aa et seq. validates defectively witness and acknowledged deeds two years after recording if no action is filed and Lis Pendens recorded contesting the validity of the deed within that time frame.

Acknowledgment of Deeds and Mortgages by way on remote online notarization is not permitted.

Conveyance Taxes

C.G.S. Sec 12-494 et seq. governs the conveyance tax. The tax is only applicable to deeds and easements. There is no mortgage tax. Conveyances for less than $2,000.00 are exempt. Connecticut has both a municipal and state conveyance tax. The applicable state and municipal rates are added together to get the total tax rate for a particular property conveyance. The percentage of state conveyance tax depends on the amount paid for the property (see below). The tax is paid by the Seller. The town clerk collects the tax when the deed is recorded.

Municipal Portion (the municipal conveyance tax is non dependent on the property type): The majority of municipalities charge 0.25% of the purchase price in accordance with C.G.S. Sec 12-494(a)(2). C.G.S. Sec 12-494(c) allows municipalities to charge up to an additional 0.25% tax.

Stamford charges 0.35% of the purchase price.

The following municipalities charge 0.50% of the purchase price: Bloomfield Bridgeport Bristol East Hartford Hamden Hartford Meriden Middletown New Britain New Haven New London Norwalk Norwich Southington Waterbury West Haven Windham

State Conveyance Tax (the rate for the State conveyance tax depends on the property type):

For a "residential dwelling" (single family including condominium units), the state tax is 0.75% of the purchase price up to and including $800,000.00. The rate is 1.25% on the portion of the consideration over $800,000 up to and including $2,500,000.00. The rate is 2.25% on the portion of the consideration above $2,500,000.00.

For Residential property other than a residential dwelling, including multi-family, the State Rate is 0.75% of the purchase price.

Vacant Land - State Rate is 0.75% of the purchase price.

Non-Residential Property aka commercial (excluding vacant land) is taxed by the state at 1.25% of the purchase price.

C.G.S. Sec 12-497a and 12-498 set forth transactions exempt from the conveyance tax. Notable exceptions include:

Deeds to which the state or any of its political subdivisions or its or their respective agencies is a party Tax deeds Deeds of partition Deeds between spouses Transfers or conveyances to effectuate a mere change of identity or form of ownership or organization, where there is no change in beneficial ownership Deeds in lieu of foreclosure that transfer the transferor's principal residence

See C.G.S. Sec 12-497a and 12-498 for the complete list of exemptions.

See C.G.S. Sec 12-638a et seq for Controlling Interest Transfer Tax. The controlling interest transfer tax is imposed on the person selling or transferring the controlling interest at the rate of 1.11% of the present true and actual value of the interest in real property possessed, directly or indirectly, by the entity.

Spousal Joinder Requirements/Homestead

Spouses are not required to join in conveyances of their spouses solely owned property.

When property is conveyed by an individual by way of a power of attorney, the power of attorney needs to be recorded with the deed, unless it has already been recorded and reference to the power of attorney is made in the deed. C.G.S. §47-10.

Who May Serve As Trustee On Deed Of Trust

Mortgage only. Deeds of trust are not used in CT.

Time Limitations

• US Judgment Liens -- 20 years
• State Court Judgment Liens -- 20 years (10 years for small claims)
• Federal Tax Liens -- 10 years (+ 30 days)
• State Tax Liens -- 20 years
• Estate Tax Lien -- 10 years
• Mechanics Liens -- 1 year
• Financing Statements -- 5 years
• Mortgages -- None
• HOA Liens -- 3 years
• Condominium assessments --
• Child Support Liens –

Odd Stuff

• Under certain circumstances, Conn. Gen. Stat. § 49-8a permits the recording of an affidavit by an attorney or an officer of a title insurer, which affidavit constitutes a release of lien.

• Rates for policies and endorsements must be filed with the Connecticut Department of Insurance.
• Usury coverage is generally available. Conn. Gen. Stat. Section 37-4, -5, and -6 exempts from usury limits “….any bona fide mortgage of real estate for a sum in excess of five thousand dollars.” See Conn. Gen Stat. Section 37-9 (entitled “Loans to which prohibitions do not apply”).