The latest on real estate recordings and new technology from the Middlesex North Registry of Deeds in Lowell
The recent amendment to Chapter 262, section 38 (contained in Outside Section 74 of the recently enacted state budget) was intended to codify the method of calculating fees on “multifunction documents” as it existed before the Appeals Court issued its decision in the Patriot Resort case. By way of background, Patriot Resort is a time-share in the Berkshires that provided financing to hundreds of condos with each unit having separate mortgages for each owner of a week-long time share. When Patriot Resort assigned all of these mortgages to a large financial institution, it combined them all together into a single document that it sought to record at the Berkshire North Registry of Deeds. Because each of the aggregated assignments served a separate function (i.e., assigning a separate mortgage), the registry treated this as a “multifunction document” indexing each assignment as a separate instrument with a separate recording fee. With so many assignments involved, this resulted in an astronomically high recording fee and Patriot Resort sued for a refund claiming it should have been charged only a single fee for recording this single (albeit blanket) assignment. The Appeals Court agreed reasoning that the plain language of the statute did not permit multiple charges. Because of the revenue that would be lost and the damage that would be done to the indexing system by this holding, the Secretary of State in conjunction with the registers of deeds proposed an amendment intended to restore the pre-Patriot Resort practice. Here’s the key language of the amendment:
provided, however, that if the paper includes multiple references to a document or instrument intending or attempting to assign, discharge, release, partially release, subordinate or notice any other document or instrument, each reference shall be separately indexed and separately assessed an additional $50 fee
While this language clearly permits the multiple charges that were imposed in the Patriot Resort situation, it may have overshot the mark. By its very nature, a subordination effects two documents – the mortgage being relegated to junior position and the more recent mortgage being granted a superior position. A literal reading of the recent amendment could lead one to conclude that since a subordination includes “multiple references” then “each reference shall be separately indexed and separately assessed an additional $50 fee” which is what some registries are doing. But subordinations were never considered multifunction documents, nor was the intention of the amendment to make them multifunction documents.
From my prior experience with the Deed Indexing Standards, I know that this whole area of multifunction and multiple documents defies clear and concise rules. There are so many different situations and different combinations, that the judgment and discretion of the folks at the recording counter play a much larger role than the words of any draftsman. All I can say is that the registers of deeds collectively understand the difficulties the varying interpretations of this statute are causing for our customers and we’re working to resolve them as quickly as possible.
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