CT Underwriting Summary

Search/Exam

• Minimum Search Requirements -- CT Attorney only The minimum period of time for a title search is forty years pursuant to the Marketable Record Title Act. By custom and underwriting practice, shorter search periods are generally used for refinance transactions.
• Plant or other search restrictions -- CT Attorney only
• Additional Requirements for REO Searches -- CT Attorney only
• Foreclosure Checklist -- CT Attorney only
• Special Searches Required (Code, HOA, Utilities)? -- CT Attorney only
• Survey Requirements -- Owners – affidavit required; Loan policy – no
• UPL Hot Button Issues -- CT Attorney only

UPL

By custom, settlements are conducted by attorneys. Conveyance instruments are drawn by attorneys. Only attorneys licensed to practice law in the State of Connecticut may be title agents.

Witness Requirements

C.G.S 47-5 requires 2 witnesses on deeds and mortgages and acknowledgment before a notary. C.G.S. 47-36aa(1) validates deeds with defective acknowledgments or complete lack of an acknowledgment two years after recording if no LP is recorded and no action filed contesting the validity of the deed. C.G.S. 47-36aa(2) validates deeds that lack witnesses two years after recording if no LP is recorded and no action filed contesting the validity of the deed.

Conveyance Taxes

C.G.S. Sec 12-494 et seq. governs the conveyance tax. The tax is only applicable to deeds. There is no tax on mortgages. 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.

Residential Property: 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

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.

Vacant Land - State Rate is 0.75% of the purchase price. Municipal taxes are the same as set forth above.

Non-Residential Property (excluding vacant land) is taxed by the state at 1.25% of the purchase price. Municipal taxes are the same as set forth above.

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.

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
• Federal Tax Liens -- 10 years (+ 30 days)
• State Tax Liens -- 20 years
• Estate Tax Lien -- 10 years
• State Inheritance Tax Liens --
• Mechanics Liens -- 1 year
• Financing Statements -- 5 years
• Mortgages --
• 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”).