Master deed
Master deed is the legal instrument on the basis of which the legal title to the property is transferred and by which the condominium is created[1]. Master deed as defined by John W. Reilly is 'the principal conveyance document used by the owners of land on which condominiums are located. The master deed, together with a declaration, must generally be submitted when recording or registering the condominium pursuant to state laws'[2].
Requirements
The master deed is a key document for the establishment of condominium. It must be submitted in the office of the county recording officer. The content of a notarial deed is usually determined by the relevant state legislation covering condominium ownership[3].The master deed shall provide for separate condominium units from one or more plots of land. The deed of association for each unit shall refer to and contain the terms of the memorandum of association. The master deed acts as a constitution for the condominium association: establishes the structure of the management board and the powers of both the management board and individual members of the association's condominium-units to adopt regulations and create rules governing the use of units and architectural design. Condominiums are created by state statute. Each state has a law governing the ownership of condominiums. Although state statutes vary, condominiums are usually created on the basis of a master deed (also known as a declaration of condominium, division of condominium or declaration of covenants, conditions and restrictions (CCRs)). The interests of the condominium are established when the developer submits the master deed in the local recorder[4].
The information contained in the Master deed
The master deed shall contain the following particular[5]:
- A statement on the placement of land described in the master deed on the basis of the provisions of the condominium act
- The official title of the condominium
- A legal description of the land
- A land survey showing the improvements to be built, the common elements and the units to be sold, in sufficient detail and presented at their respective locations with dimensions
- Identification of each unit
- A description of the common elements and limited common elements, if there are any
- Percentage of undivided interests in common elements, including owners' rights
- Bylaws
- Methods of amending and supplementing the master deed
- The name and nature of the association
- The manner of allocating common expenditure
Examples of Master deed
- A master deed is a legal document that establishes a condominium and all the elements that comprise it, such as the common areas, units, and owners’ rights and responsibilities. It defines the condominium’s boundaries, and it also includes details about the structure of the condominium association and the powers and duties of the association board.
- Another example of a master deed is a declaration of covenants, conditions, and restrictions (CC&Rs). This document is typically created by the developer of a subdivision and outlines the rules and regulations that all homeowners must follow. The CC&Rs dictate how the homeowner may use their land, as well as any restrictions or limitations set by the developer. The CC&Rs may be enforced by a homeowners’ association or by local authorities.
- A third example of a master deed is a deed of trust. This is a legal document that is filed with a county or state recorder's office, and it serves as a form of security in the transfer of property. The deed of trust outlines the terms of the transfer and ensures that the lender is protected if the borrower defaults on their loan. This type of deed is often used in real estate transactions.
Advantages of Master deed
A master deed offers several advantages to its holders. These include:
- Legal protection: The master deed serves as a legally binding document that outlines the rights and obligations of condominium owners and establishes the condominium corporation as the governing body.
- Easier access to financing: Banks are more likely to approve mortgages or other loans for properties that are part of a condominium because the master deed provides a clear record of ownership.
- Community benefits: The master deed outlines the rules and regulations for the condominium, which help to create a sense of community and a safe and pleasant living environment.
- Increased property values: The presence of a master deed indicates to potential buyers that the property is well-maintained and well-governed, which can help to increase its value.
- Tax benefits: Condominium owners may be eligible for tax incentives or deductions that are not available to other property owners.
Limitations of Master deed
The limitations of a Master deed include:
- The Master deed cannot be altered without the consent of all parties involved.
- The Master deed is limited to the language used in the document and cannot be interpreted beyond the literal meaning of the words.
- The Master deed is only binding on the parties that are identified in the document and those parties cannot transfer their rights and obligations to any other parties.
- The Master deed cannot be amended to include any additional provisions that were not initially included.
- The Master deed cannot be amended to remove provisions that were included in the original document.
- The Master deed does not give the homeowner the right to make upgrades or modifications to the property without the approval of the other homeowners or the condominium association.
- The Master deed does not give the homeowner the right to make changes to the common areas of the condominium without the approval of the other homeowners or the condominium association.
- The Master deed does not override any existing zoning laws or local ordinances that may apply to the property.
- The Master deed does not give the homeowner the right to take legal action against another homeowner or the condominium association.
- The Master deed does not give the homeowner the right to receive compensation or damages if any of the provisions of the Master deed are violated by another party.
A Master deed is the legal instrument by which the condominium is created. Beyond the Master deed, there are several other approaches that can be used to define the condominium:
- Common interest ownerships: Common interest ownerships are a legal form of ownership in which multiple owners have a common interest in a property. The common interests can be in various forms, such as timeshare, fractional ownership, and community land trusts.
- Homeowners associations: Homeowners associations are organizations that are formed to maintain and manage a common interest development such as a condominium complex. The association is responsible for the upkeep and management of the common areas and the enforcement of rules governing the use of the common areas and the individual units.
- Covenants and restrictions: Covenants and restrictions are legal restrictions that are placed on the use of a property by the developer or a homeowners association. These restrictions can govern the use of the property, the types of buildings that can be constructed, and the types of activities that can take place on the property.
- Leases: Leases are written agreements between a landlord and a tenant that govern the use of a property for a specific period of time.
In summary, the Master deed is the legal instrument on the basis of which the legal title to the property is transferred and by which the condominium is created. Beyond the Master deed, other approaches such as common interest ownerships, homeowners associations, covenants and restrictions, and leases can be used to define the condominium.
Footnotes
| Master deed — recommended articles |
| Vesting order — Negative easement — Absolute assignment — Limited warranty deed — Absolute title — Certificate of ownership — Share register — Share certificate — Distribution statement |
References
- Fields K, Fields K, (2013), Contemporary Real Estate Law, Wolters Kluwer Law & Business
- Moskowitz H, (2017), The Complete Illustrated Book of Development Definitions, Routledge
- Reilly J, (2000), The Language of Real Estate, Dearborn Real Estate
Author: Karolina Stankiewicz
