Featured Articles

Cannabis-BankCourt Side-Steps Whether Sec. 8 Tenant Can Be Evicted For Possession of Under 1 Oz. of Marijuana

In the first of what should be many cases dealing with marijuana use in rental housing, the SJC ruled last week that a Section 8 tenant could be evicted for the possession of under one ounce of marijuana combined with allowing her live-in boyfriend to deal marijuana and possess a gun at the leased premises. The court overruled Boston Housing Court Justice Jeffrey Winik’s prior decision stopping the eviction of the tenant. Judge Winik was unconvinced that a public tenant could be evicted for possession of under 1 oz. of pot under the Mass. decriminalization of marijuana law.

The case is Figgs v. Boston Housing Authority (SJC 11532). A link to the opinion can be found here.

I was expecting the Court to address the interplay between the law decriminalizing the possession of under 1 oz. of marijuana and the eviction laws, but the justices side-stepped the issue, ruling instead that there was more than sufficient evidence of drug dealing at the subsidized apartment to warrant eviction based on a serious violation of the lease and criminal activity. Police found a small amount of marijuana, plastic baggies, cash and a firearm in the apartment, charging him with possession with intent to distribute and unlawful possession of a loaded firearm.

Although the question of whether a tenant can be evicted for possession of a recreational sized amount of pot will be left for another case, the Figgs decision can be used to hold tenants responsible for the criminal activity of their household members, including boyfriends, husbands, children and guests. This should be a helpful tool to enable public housing authorities to keep drugs and guns out of subsidized housing.

 

{ 0 comments }

mass ibanez titleSenate Bill 1987 Would Have Cleared Title For Innocent Homeowners

Acceding to the demands of fair housing community activists, Massachusetts Governor Deval Patrick has rejected Senate Bill 1987, An Act Clearing Titles to Foreclosed Properties. The bill would have cleared title of homes affected by defective foreclosures with a one year waiting period from enactment of the bill while giving homeowners three years to challenge wrongful foreclosures. The Governor filed an amendment to the bill, raising the statute of limitations for homeowners to challenge foreclosures from 3 years in the current bill to 10 years. The Senate and House are unlikely to agree on such an absurdly long statute of limitations, so Patrick’s action should effectively kill the bill.

This is truly devastating news for the thousands of innocent homeowners who are stuck with bad title due to botched foreclosures.

The bill had cleared the Senate and House with near unanimous support. The bill also received favorable press in the Worcester Telegram and Boston GlobeThe bill preserves the right to challenge foreclosures and sue the banks, while helping innocent homeowners stuck with bad title. Despite this, organizations such as the Massachusetts Alliance Against Predatory Lending and activist Grace Ross were successful in getting Governor Patrick on their side.

The Governor’s statement accompanying his action on the bill states as follows:

Massachusetts is emerging from a period of far too many foreclosures, on far too many families, and in far too many communities facing significant economic challenges. It is no secret that, too often, the foreclosure was not properly effectuated.  The entity purporting to foreclose did not have the legal authority to do so.  The effect of these impermissible foreclosures has been lasting.  Families were improperly removed from their homes.  Buyers who later purchased the property — or, at least, believed they had done so — are now faced with title questions.  Many of these buyers were investors, but many are now homeowners themselves. I commend the Legislature’s effort to address these problems.  But I believe the proposed three year period is insufficient.  A family improperly removed from its home deserves greater protection, and a meaningful opportunity to claim the right to the land that it still holds.  The right need not be indefinite, but it should extend for longer than three years.  Certainty of title is a good thing — it helps the real estate market function more smoothly, which ultimately can help us all.  But this certainty should not come at the expense of wrongly displaced homeowners or, at least, not until we have put this period further behind us.

As a long time supporter of this bill, I am truly disheartened at this result. I thought the bill did a great job in balancing the rights of innocent home buyers who are stuck with unsellable properties through no fault of their own with the rights of folks who are fighting foreclosures. A three year statute of limitation — which is the same length for malpractice and personal injury claims — is a reasonable amount of time to mount a challenge to a foreclosure, especially when debtors have many months prior notice before a foreclosure sale. The people who would have benefited from this bill are everyday people who bought properties out of foreclosure, put money into them and improved them. I have personally assisted several of these families. Everyone agrees that the banks are largely at fault for the mess left behind with the foreclosure crisis but why put the rights of those who don’t pay their mortgages above those who do? I will never understand this rationale. Perhaps that’s why I could never be in politics!

So where do we go from here? I honestly don’t know. Fortunately, the Land Court recently issued a ruling which may help clear some of these toxic titles. Maybe the legislation will get another chance at the next session or when Patrick leaves office at the end of the year.

 

 

{ 12 comments }

Senate Bill 1987 Passes Legislature at Midnight Hourstop20foreclosure1.jpg

Senate Bill 1987, sponsored by Shrewsbury State Senator Michael Moore and the Massachusetts Land Title Association, would render clear and marketable to any title affected by a defective foreclosure arising out of the U.S. Bank v. Ibanez ruling. Estimates are that hundreds of innocent homeowners are affected by paperwork errors by foreclosure lenders, rending them unable to sell or refinance their homes.

After some favorable press in the Worcester Telegram and Boston Globe (to which I was happy to contribute), the Legislature passed the somewhat controversial bill at the midnight hour on July 31, the last night of the legislative session. The bill moves on to the Governor’s desk where housing advocates are still lobbying for rejection of the bill. The housing advocates’ arguments really show a complete lack of understanding of the title defect problem and its disasterous effect on the housing market. The bill preserves the right to challenge foreclosures and sue the banks, while helping innocent homeowners who are stuck with bad title. The upside of the bill is that more affordable homes can hit the real estate market. Isn’t that the goal of housing advocates rather than allow foreclosed homes to sit, blighted and decadent?

If you have been affected by an “Ibanez” title defect and otherwise support the bill, please contact the Governor’s Office through his email system:

http://www.mass.gov/governor/contact-us.html#email

Hopefully, I will have good news to report in the coming days…

{ 5 comments }

mass ibanez titleIt appears we may be nearing the end of the misery resulting from the infamous U.S. Bank v. Ibanez foreclosure decision, which has caused hundreds if not thousands of title defects across the Commonwealth. A recent Land Court ruling combined with significant movement on curative legislation may clear the vast majority of these defective titles.

By way of background, titles of properties afflicted with Ibanez title defects came out of faulty foreclosures, and in worst cases, cannot be sold or refinanced. Many homeowners have been waiting for 5 years or longer for some kind of resolution so they can sell or refinance their homes. 

Daukas v. Dadoun Land Court Ruling

This past week on July 23, 2014, Land Court Justice Keith Long (ironically the same judge who wrote the original Ibanez ruling) held that an Ibanez title can be cleared through the foreclosure by entry procedure as long as three years have passed since the faulty foreclosure. Typically in Massachusetts lenders use both the power of sale/auction method and entry method of foreclosure. Unlike the power of sale/auction method, however, a foreclosure by entry takes three years to ripen into good title. Judge Long ruled that even where the power of sale/auction method was defective due to non-compliance with the Ibanez decision, the foreclosure by entry method would not be affected by this non-compliance provided that the lender was the “holder” of the mortgage at the time of the entry and three years have passed since the entry.

So what does that mean in plain English? It means that titles with Ibanez defects may be insurable and marketable provided that (1) the foreclosing lender conducted and recorded a proper foreclosure by entry, (2) the entry was conducted by a lender who was the proper holder of the foreclosed mortgage, and (3) three (3) years have passed since the foreclosure entry. If you have been dealing with an Ibanez defective title, it’s best to contact an experienced title attorney and/or your title insurance company (if you have one) to see if you qualify. Feel free to contact me at rvetstein@vetsteinlawgroup.com.

Thank you to Attorney Jeffrey Loeb of Rich May PC for alerting me to the Land Court case.

Senate Bill 1987

Senate Bill 1987, sponsored by Shrewsbury State Senator Michael Moore and the Massachusetts Land Title Association, would render clear and marketable to any title affected by a defective foreclosure after 3 years have passed from the foreclosure. The bill, which has been passed by the Senate and is now before the House, is very close to being passed by both branches of the legislature, hopefully during this summer legislative session.

This is great news for the real estate market. I don’t have firm numbers, but there are probably hundreds, if not thousands, of these unsellable properties just sitting on the sidelines, and now they can get back onto the market. This is exactly what the inventory starved market needs.

{ 1 comment }

airbnbLaw Catching Up With Popular Airbnb Room Rental Website

With the promise of relatively easy money, Airbnb (Air Bed & Breakfast) is making innkeepers of many Greater Boston homeowners and even renters who are taking advantage of the popular website’s rental listing service. For those who don’t know already, Airbnb is a website where you can rent out one or more rooms in your home, condo or apartment for a nightly, weekly or monthly fee. But with some homeowners earning upwards of $20,000/year on rental income, Airbnb raises a multitude of thorny legal issues in Massachusetts, including whether an innkeeper or rooming house license is required and whether guests qualify as tenants. Last year, a group of Brookline residents dropped a dime on a local homeowner who rented out rooms to foreign exchange students via Airbnb. According to Brookline Building Commissioner Dan Bennett, an owner may rent up to two rooms to two lodgers as of right, as long as there are no separate cooking facilities. If an owner wants to have another lodger, they would require relief from the Zoning Board of Appeals.

According to a recent Boston Globe article, Airbnb’s website currently lists nearly 3,500 properties for rent in the Boston area — a 63% increase since July 2013. Some of the lodging arrangements offered cost less than $50 per night and involve little more than a bed, a key, and zero conversation. Others offer entire homes, bed-and-breakfast-intensity chitchat, and prices that can top $800 per night. Aspiring innkeepers are everywhere, from Dorchester to Revere, Boston to Somerville, advertising “treetop views,” “steps to the T,” “cozy penthouses,” even “lovely puppies.”

But with success has come negative attention from cities and towns that want to tax the lodging arrangements as they do hotels, from landlords with leases that prohibiting sublets, and from neighbors who don’t want strangers traipsing through buildings. There are also some horror stories popping up with Airbnb guests turning into squatters and refusing to leave. In New York City, the Attorney General is waging a publicized legal fight to get Airbnb host names and recover unpaid hotel taxes. 

Licensing and Registration Requirements

From a legal perspective, there is no doubt that Massachusetts municipalities will eventually be considering whether Airbnb qualifies as a rooming or lodging house, bed and breakfast or hotel for purposes of both regulation and taxation. Hey, you think cities will pass up a golden opportunity to increase tax revenue? No way.

The state Executive Office of Health and Human Services recently opined in a memo that lodging of this type is subject to local licensure as a bed and breakfast. For now, the City of Boston Inspectional Services Department has issued a temporary policy not to issue citations to homeowners while an internal group works on recommendations. A city policy is expected this fall, and as yet, no per-bed fee rate has been set.

The Licensing Board for the City of Boston requires a lodging house license if lodgings are rented to four or more persons not within the second degree of kindred to the person conducting the lodging. This license is an annual requirement and a lodging house is further required to keep, in permanent form, a register of the true name and residence of occupants for a period of one year. Lodging house license may require upgrades with smoke detectors and fire prevention systems which may be cost prohibitive for any Airbnb host.

The Boston Inspectional Services Department requires that a property be registered if it is to be occupied without the owner of the property present. This registration is done on an annual basis and inspection of the property is required on a five (5) year cycle by the Inspectional Services Department. This regulation applies to “a non-owner occupied room or group of related rooms within a dwelling used or intended for use by one family or household for living, sleeping, cooking and eating.” More information is available here.

In the suburbs, Airbnb may also run afoul of zoning by-laws which regulate whether a home is a single family or multi-family dwelling.

Taxes. The City of Boston excise and convention center taxes (together known as room occupancy taxes) may apply to an Airbnb listing. Refer to the Massachusetts Room Occupancy Tax Guide for more details. In addition, the Massachusetts excise tax may also apply. Refer to Section 64G(3) of the State Tax Code.

Guests Considered Legal Tenants?

Airbnb offers rentals for a daily, weekly or monthly charge. Whether a guest would be considered a legal tenant entitled to the vast protections under Mass. law depends primarily on the length of the tenancy. Under state law, if the premises is deemed a rooming house or lodging house, a rental for three consecutive months constitutes a tenancy at will which can only be terminated with a rental period notice of at least 30 days. Occupancy of a dwelling unit within a rooming house or lodging house for more than 30 consecutive days and less than three consecutive months may be terminated only by seven (7) days notice in writing by the operator of the rooming house or lodging house to the occupant. A daily rental is a grey area and would likely be considered a mere license. However, in all instances, the host must use court eviction proceedings to evict the guest, and cannot resort to self-help such as changing the locks, lest they be subject to liability.

Apartments

If you have the chutzpah of renting out a room in your leased apartment via Airbnb, the rental will likely violate your lease’s provision against sub-leasing and your landlord will not be happy. Most standard form apartment leases provide that any sub-lease must have the written consent of the landlord so the landlord can control who occupies the unit. Most landlords I know will not approve of an Airbnb rental situation, unless they are getting income and are assured of the security and safety of the situation. Renting out your apartment through Airbnb can violate your lease and subject you to a quick exist via eviction. From one legal question and answer website, tenants are already facing eviction for using Airbnb.

Condominiums

If you are renting out a room in your condo, Airbnb rentals may also conflict with condominium rules and regulations. I highly doubt your condominium association and fellow unit owners would be happy if a unit were turned into a revolving door of bed and breakfast guests. Most condominium documents provide for rules governing the type and length of rentals of units. Unit owners who violate these rules can be subject to fines, penalties and court action.

Mortgage and Homeowner Insurance Policy Ramifications

Most conventional single family and condominium Fannie Mae compliant mortgages contain a provision where the owner agrees that the mortgaged property will remain the borrower’s principal place of residence and not an investment property. Investment property mortgage typically carry a higher interest rate and are sold in a different category in the secondary mortgage market. Homeowners who make a practice of using Airbnb may unknowingly be violating their mortgage agreements by converting the property into in essence a rental property. The same holds true for a standard homeowner’s insurance policy. Turning your home into a bed and breakfast certainly raises a host of new risks for both the homeowner and the insurance company underwriting those risks. If there is an unfortunate accident involving an Airbnb guest, watch out because the insurance company could deny the claim due to converting the character of the insured property into a rental property.

What’s Next?

Airbnb is certainly a game-changing technology in the rental space. As is common with any new distruptive technology the law is just catching up. But the law will catch up and Airbnb hosts and guest must pay attention and comply with whatever regulations and law that are passed. Check back here for more developments as I will be monitoring the situation.

 

{ 0 comments }

ma-lowell-hamiltoncanal-2Wyman v. Ayer Properties:  SJC Holds That Economic Loss Doctrine Inapplicable In Condominium Construction Defect Claims

In an important ruling which will make it less difficult for condominium associations and trustees to seek redress for faulty or defective construction, the Supreme Judicial Court has jettisoned the “economic loss doctrine” in the condominium context and affirmed a $300,000 plus judgment against a Lowell based real estate construction company over faulty construction at a condominium. A link to the opinion can be found here.

The economic loss doctrine provides that a claimant must suffer some sort of property damage or personal injury in a negligent construction claim before being able to recover compensatory damages. The strict application of the economic loss doctrine in condominium construction defects was often the “magic bullet” used by insurance companies to defend these claims. Using some much needed common sense, the court held that the doctrine should not apply strictly in the condominium setting due to the peculiar nature of a condominium ownership structure with the association/trustees owning the common areas but with unit owners having contracts with the developer.

Going forward, condominium trustees will likely have more success in recovering their losses for defective construction against developers over common areas. On the flip side, insurance premiums for construction companies may rise due to the increased liability exposure.

{ 0 comments }

Hull-Wind-Turbine-from-seantyler-via-FlickrControversial Wind Turbine Project Approved, Over Neighbors’ Opposition, Appeals Court Rules

Plans for a controversial wind turbine on top of Turkey Hill in swanky coastal Cohasset could soon move forward after the Massachusetts Appeals Court upheld a land court ruling that the town’s planning board acted appropriately when it approved the project. The court dismissed opposition arguments by neighbors and a nearby skilled-nursing home who challenged the project’s legality.

The wind turbine is proposed to be sited at the apex of 410-foot-tall Turkey Hill in the northwest corner of Cohasset, in the 314-acre Whitney Thayer Woods, and would be within 1,000 feet of the Golden Living skilled-nursing home and homes on the Hingham side of the border. The nursing home and neighbors complained that the turbine would emit excessive “shadow flicker,” noise and also risk various public safety issues. 

In 2011, the Cohasset Planning Board held hearings on the wind turbine plans, and issued a special permit with numerous conditions for which the operator must comply. The abutters focused on the “flickering shadows” that the 150-foot blades would cast on nearby properties. Land Court judge Gordon Piper in 2012 upheld the board’s approval, determining that the permit’s special conditions adequately address safety concerns and follow zoning bylaws. For example, the permit requires that the organization monitor flickering and make sure that it doesn’t exceed 30 minutes per day or 300 hours per year.

The Appeals Court quickly shot down all of the neighbor’s concerns, holding that it would not second-guess the judgment of local officials who granted the permit.

According to the Patriot Ledger, Jim Younger, the director of structural resources and technology at the Trustees of Reservations said that the group is “very pleased” with the court’s ruling and grateful for the widespread support for the project. “At this time, we are still very interested in moving forward with the project and will be reassessing our options following the lengthy delays to the project. We will keep the community informed as we complete this review.”

Wind turbine projects are becoming increasingly more accepted by towns to boost both power and revenue so they are less reliant upon the “grid.” This ruling shows how difficult it is for abutters and neighbors to challenge a wind project once the town planning board has issued a permit.

{ 0 comments }

eviction-notAvoid Being Dead On Arrival In Eviction Court

The first step in evicting any Massachusetts tenant is issuing a notice to quit which is a legal document formally notifying the tenant that his tenancy is being terminated for a particular reason and giving him the date upon which he must move out. There are very specific rules as to how the notice must be drafted, what it must say, and how it must be delivered. Any mistakes in providing a proper notice to quit can torpedo your eviction case before you even see a judge. Needless, to say I recommend hiring an experienced Massachusetts eviction attorney to handle drafting and serving the notice to quit. Here are all the various rules and considerations for sending out a notice to quit.

A.      Non-payment of Rent

One of the most common reasons for starting an eviction is for non-payment of rent. Whether the tenant has a written lease or is a tenant at will the landlord must send the tenant a 14 day “notice to quit” before starting the eviction process. The notice to quit will typically provide as follows:

Dear Mr. Tenant: This office represents your landlord, Mr. Landlord. You are hereby notified that your tenancy is terminated and to quit and deliver up and move out of the premises you now rent namely: 123 Main Street, Anytown, MA and all appurtenant uses thereto 14 days after your receipt of this notice. The reason for this notice is that you have failed to pay the rent due as follows: Total Owed: $7,200.00.

1. Service of the Notice

Many landlords believe that a notice to quit should be served by certified/registered mail. This is a very bad practice because the tenant can always avoid the mailman. In court, the landlord has the burden of proving that the tenant received the notice. The best practice is to have the notice to quit served by a constable or sheriff to ensure proof of delivery. Under the court rules, service by a constable or sheriff is “good service” whether the tenant is served in hand or the notice is left at the premises.

2.  Tenants At Will

If a landlord is sending a 14 day notice to quit for nonpayment to a tenant at will (as opposed to a tenant with a written lease for a set term), the notice must also include the following language:

 “If you have not received a notice to quit for nonpayment of rent within the last twelve months, you have a right to prevent termination of your tenancy by paying or tendering to your landlord, your landlord’s attorney or the person to whom you customarily pay your rent the full amount of rent due within ten days after your receipt of this notice.”

3. Calculating Notice Date

The next trap for the unwary is calculating the notice date. You cannot start the eviction until 14 days have elapsed since the tenant is served with the 14 day notice to quit. So you need to know exactly when the tenant was served so you can properly calculate the date upon which you can start summary process. If you start the eviction too early, the case will get dismissed.

4. Cure Rights

Landlords should also be aware that under tenant-friendly Massachusetts law, a tenant at will can cure and reinstate his tenancy by paying the outstanding rent (plus court costs if claimed) up to the Monday answer date in the eviction case — and most judges won’t evict any tenant who shows up to court fully paid up.

Sometimes, landlords make the mistake of accepting rent from a delinquent tenant without endorsing the check the proper way in order to avoid reinstating the tenants. If you receive a rental payment after a notice to quit is issued, you must endorse the check as follows:

“Accepted for use and occupancy only and not for rent”

Your notice to quit should also have the following non-waiver language:

If your tender of rent or payments does not comply with the requirements noted above or otherwise cure or excuse the breach as provided by law, any funds paid by you after the date of this notice shall be accepted for use and occupancy only and not for rent, shall not waive this notice or any subsequent eviction proceedings, nor shall it create or reinstate any tenancy.

B.      Termination of Tenancy At Will

Sometimes landlords just want to move on from a problematic tenant at will, raise their rent or change the lease terms. In these situations, landlords must serve a notice terminating tenancy at will. This is sometimes called a 30 day notice, but this is actually inaccurate because almost always more than 30 days notice is required to be given. It’s really a rental period notice.

Generally, at least a full rental period of notice must be given to a tenant at will, but the termination date must be at the end of the following rental period, or 30 days whichever is longer. For example, if you are terminating a tenancy at will on June 10, the notice must provide that the tenant must vacate by the following July 31. Terminating a tenancy at will in February will also be problematic.

In practice, judges will often give tenants in no-fault evictions a bit more leeway in terms of vacating the premises.

C.  Non-Renewal of Lease/Offer of New Tenancy

Most landlords get tripped up in the situation where a written lease self-extends but the landlords wants to raise the rent, change the lease terms or move on from the tenant. In this situation, a notice terminating tenancy must be issued to formally terminate the tenancy, coupled with an offer of a new lease/tenancy. If the tenant does not accept the offer of a new lease/tenancy, the tenancy will end on the date provided in the notice. If the landlord wants the tenant to move out, he doesn’t need an offer of a new tenancy obviously.

D.      For Cause Situations

“For cause” evictions encompass a wide range of bad behavior by tenants in violation of lease provisions or the law. It could be illegal activity, drug use, excessive noise, uncleanliness, harassment of other residents, non-approved “roommates” and the like. Like all other evictions, the landlord must issue a notice to quit to the tenant stating the specifics of the offenses. If the tenant has a standard form lease, the notice to quit will typically be a 7 day notice. For tenants without a written lease, it’s a gray area, but I would use a 30 day notice. For drugs and other illegal activity, Massachusetts also has a special expedited eviction process where you can go to court right away without any prior notice to quit, but the tenant is entitled to notice of the court proceeding and an opportunity to contest it and cross-examine witnesses.

Sending a proper notice to quit is merely the first step in the eviction process, but a very important one as it can get your case dismissed before a judge hears the merits of the case. There are so many other procedural traps for the unwary which follow during an eviction case. Again, if you are considering evicting a tenant, do not attempt to do it yourself.

____________________________________

100316_photo_vetstein-2.pngIf you need assistance drafting and serving a notice to quit and evicting a tenant, please contact Attorney Richard Vetstein via email at rvetstein@vetsteinlawgroup.com or telephone at 508-620-5352.

{ 3 comments }

how to handle criticismAttorney’s Obnoxious Conduct At Closing Factor in Large Award

Every now and then I have a contentious deal where I should be wearing a black and white referee’s shirt instead of a shirt and tie. I’m usually successful in getting everyone to calm down and close the transaction. The case of KGM Custom Home Builders v. Prosky (embedded below) recently decided by the Massachusetts Supreme Judicial Court is an example of how really bad behavior at a real estate closing can get a party into big legal trouble.

45 Acres in Mansfield for Sale

The Prosky family of Mansfield entered into an agreement to sell 45 acres of developable land to KGM Custom Builders. The sale price was linked to the number of buildable lots that KGM could permit. After spending over $300,000 in 5 years including weathering an appeal, KGM was able to obtain permits for 60 residential units. However, the Proskys received a better offer for the land and a dispute over calculation over the purchase price arose. Nevertheless, KGM was not willing to back down, and scheduled a closing. Repudiating the contract, the Prosky’s attorney informed KGM that it should calculate the liquidated damages provision in the contract because the sellers were not going to sell.

Closing Shenanigans

A closing was nevertheless scheduled at which the Prosky’s attorney showed up with a professional videographer as “defense strategy.” The parties’  attorneys started yelling at each other, and KGM’s attorney shut off all electricity to the building, but the videographer was able to tape with battery power. KGM’s attorney demanded that the Prosky’s attorney produce the closing documents he was supposed to have drafted. The Prosky’s attorney waived the documents in the air, and when the buyer’s attorney went to grab them, he pulled them back and asked if could read them from 2 feet away. KGM, with funds on hand, was ready, willing and able to close, and took the Prosky’s attorney’s antics at the closing as not engaging in good faith, and walked out. At the end of the closing, one of the sellers asked the videographer, “can you explain to me what just happened”? (I would love to see this videotape!).

Anticipatory Repudiation, Breach of Good Faith and Fair Deal, or Both?

Naturally, KGM sued the sellers. The trial judge ruled the sellers had engaged in anticipatory repudiation but he calculated the sales price in favor of the sellers at over $1M, giving the buyer the option of going forward with the deal or taking the liquidated damages because the buyers had also breached the covenant of good faith and fair dealing with their attorney’s antics at the closing. The buyer elected damages, and the judge awarded nearly $500,000 in permitting costs and attorneys’ fees. The sellers weren’t happy with this, so they appealed.

On appeal at the SJC, the legal issue was whether the law allowed the trial judge to provide the buyer with this favorable election of remedies. With few exceptions, outside of the commercial law context, Massachusetts has not generally recognized the doctrine of anticipatory repudiation, which permits a party to a contract to bring an action for damages prior to the time performance is due if the other party repudiates. One such exception occurs where a seller of land informs the “holder of an enforceable option” to purchase that he plans to sell the land to a third party. The high court ruled that this case fit within this exception and upheld the award of damages to the buyer. Naturally, the court seemed particularly upset about the behavior of the seller’s attorney at the closing. In fairness, the SJC did slash the attorneys’ fee award by $120,000, but with statutory interest accruing for several years now, the end result will likely be the same — the sellers are out a lot of cash.

Fortunately, these types of antics are very much the exception rather than the rule at Massachusetts closings. There is really no excuse for this type of unprofessional behavior at a closing, no matter how contentious the dispute. If a party is going to elect to terminate a deal, go ahead and do it without the theatrics. After all, what you say and do at a real estate closing may come back to bite you and your client.

KGM Custom Home Builders v. Prosky (MA SJC 5/30/14)

{ 1 comment }

peeling-paintFraught with liability and danger, the Massachusetts Lead Paint Law is always a hot topic for Massachusetts residential real estate professionals. Fortunately for us, my colleague Attorney Marc Canner recently gave a seminar on the Lead Paint Law in which he prepared a very helpful Frequently Asked Questions (FAQ) with Practice Pointers which he’s graciously allowed me to share here.

The overriding policy of the Mass. Lead Paint Law is to encourage full disclosure of all lead paint related issues and give buyers the opportunity to test for lead paint before they purchase a home with lead paint. Unlike rental properties, however, there is no obligation on the seller to de-lead prior to a private sale. But common sense dictates that a lead-free house may be more valuable and marketable, and this is particularly true for multi-family properties where tenants with children under six years of age may in any event trigger the de-leading requirements of the law.

Further, penalties for non-compliance with the disclosure requirements are quite stiff. Sellers and real estate agents that do not meet the requirements can face a civil penalty of up to $1,000 under state law and a civil penalty of up to $10,000 and possible criminal sanctions under federal law for each violation. In addition, a real estate agent who does not meet requirements may be liable under the Massachusetts Consumer Protection Act, which provides up to triple damages.

What lead paint disclosures does a listing agent have to provide?
Whenever an owner of a home built before 1978 sells, the listing agent must provide the (1) the “Property Transfer Notification Certification”, and (2) all 10 pages of the Department of Public Health’s “Childhood Lead Poisoning Prevention Program ‘CLPPP’ Property Transfer Lead Paint Notification.” Most agents only use the one page form, and that’s a “no-no.”

Practice tip: It is a good idea to combine the two forms as one document in DotLoop (or other transactional software system) or on the MLS when the listing agent is providing these to the Buyer.

Can the Buyer sign the Property Transfer Notification Certification form before the Seller?
No. It is invalid. The Property Transfer Notification Certification (“Property Transfer Form”) must be completed and signed by the Seller before the Buyer can sign. The Buyer’s signature acknowledges they are in receipt of the disclosure. Thus, the Buyer cannot be in receipt of the disclosure until the Seller first completes the form.

Practice tip: If the listing agent is slow to send the Property Transfer Form, then the buyer’s agent should document the requests by email. In addition, the buyer’s agent should email the listing agent’s broker to request the timely receipt of the Property Transfer Form.

What disclosures and acknowledgements have to be completed on the Property Transfer Form?
All disclosures and acknowledgements have to be accurately completed, including the Seller’s Disclosure, the Purchaser’s or Lessee Purchaser’s Acknowledgement and the Agent’s Acknowledgement. Agents should be aware that HUD and the EPA have audited broker’s files in the past and have at times found them deficient from a compliance standpoint. Thus, it is critical to accurately fill out the form.

Practice tip: Make sure that the Property Transfer Form includes the property address. The older form, “CLPPP form 94-3 dated 6/30/94” does not include a line for the address. Both agents working on the transaction should sign the form.

Does a listing agent have to provide a Property Transfer Form for a property built after 1978?
No. The lead paint law only applies to homes built before 1978. Therefore, testing for lead-based paint is not required.

Practice tip: If the listing agent provides a Property Transfer Form for a home built after 1978, neither the buyer nor the buyer’s agent has to sign the form.

Does a Seller have to accept an offer from a Buyer who is requesting lead paint testing?
A property owner or real estate agent cannot sidestep the lead paint law simply by refusing to sell or rent to families with young children. The purpose of the lead paint law it to protect the health of children and pregnant women. An owner cannot refuse to sell or refuse to renew the lease of a pregnant woman or a family with young children just because a property may contain lead hazards that they do not want to spend the money to remove. Any of these acts is a violation of the Lead Law, the Consumer Protection Act, and various Massachusetts anti-discrimination statutes that can have serious penalties for a property owner or real estate agent. A case in point: a Boston area landlord was recently hit with a $75,000 penalty by the Mass. Attorney General’s office for lead paint violations.

What is required to obtain a Certificate of Compliance?
Owners of homes built before 1978 where children under six live should have the property inspected by a licensed lead inspector. Typically, an inspector will look to remove peeling, chipping or flaking paint. A full list of surfaces to be deleaded is available in the CLPPP form.

Practice tip: To contact a licensed lead inspector, click this link.

Does a listing agent need to disclose a Letter of Interim Control?
Yes. A Letter of Interim Control is only valid for one year. Thus, if a home built before 1978 that has a Letter of Interim control but does not have a Certificate of Compliance, then the agent needs to Disclose the Interim Letter of Control and likely engage a professional to determine what work is needed to bring the property into compliance.

What is the contractors’ role in the lead removal process on home improvement projects?
In a previous article, I noted that new regulations went into effect in 2010 that cover paid renovators who work in pre-1978 housing and child-occupied facilities, including renovation contractors, maintenance workers in multi-family homes, painters and other specialty trades. These regulations provide that most home improvement projects on homes built before 1978 require certified lead paint removal project contractors to follow strict lead paint removal precautions. Nothing in these new rules requires owners to evaluate existing properties for lead or to have existing lead removed.

Are there lead paint removal tax credits and loans available?
There are a number of lead paint removal no and low cost loans available. MassHousing, for example, has a “Get the Lead Out” Lead Paint Removal loan program for income eligible owners or tenants.

In addition, Massachusetts has a tax credit of up to $1,500 for each unit deleaded.

If an agent has a buyer purchasing a home built before 1978, should the agent request lead removal be done before the closing or after the closing?
If making these strategic decisions, we recommend that you consult a real estate attorney in order to be in full compliance with lead paint laws.

At closing, should Sellers sign the form in the closing package that says the Seller agrees to remove all known lead paint?
The form typically contained in most lender closing packages states that the Buyer agrees to indemnify and hold the lender harmless in the event of any non-compliance with lead paint laws.

___________________________

Richard Vetstein and Marc Canner are Massachusetts real estate attorneys. Rich can be reached at rvetstein@vetsteinlawgroup.com and Marc at mcanner@cannerlaw.com

{ 0 comments }

apartment-balconySheehan v. Weaver: Strict Liability For Building Code Violations Does Not Apply To Residential Structures

I love being right.

Two years ago, Northeast Housing Court Judge David Kerman issued a controversial ruling that an owner of a mixed used building was “strictly liable” for a intoxicated tenant’s fall through a defective porch guardrail in the case of Sheehan v. Weaver. In my prior post on this troubling case, I said “given the concerning expansion of liability in this case, look for this ruling to get appealed. Judge Kerman is a well-respected judge, and this decision is a close call, but I think he went a bit too far outside the legislative intent behind the law.”

Well, that’s exactly what the Supreme Judicial Court said in its ruling today which should provide some relief for residential landlords and their liability insurers.

Faulty Porch Guardrail

The landlord, David Weaver, owned a building with three residential apartments located above a commercial establishment. None of the apartments were owner-occupied. After a night of drinking, one of Weaver’s residential tenants, William Sheehan, fell through a porch guardrail, several stories onto the asphalt pavement below, suffering serious injuries. The connection of the guardrail to its post gave way because it was defective and in violation of the Building Code.

After a four-day trial in the Housing Court, a jury found for the tenant on the negligence claim, awarding approximately $145,000 after a 40% reduction for the his own fault. The jury also found the landlord strictly liable, assessing $242,000 in damages. With the strict liability, the landlord was on the hook for the full $242,000 verdict without consideration of the tenant’s own fault. The case went up to the SJC on appeal.

Interpretation of Building Code Statute

The Massachusetts State Building Code provides for strict liability, that is, liability without any consideration of the comparative fault of the injured, for any personal injuries caused by a building code violation at any “place of assembly, theatre, special hall, public hall, factory, workshop, manufacturing establishment or building.” The SJC ultimately agreed with the landlord that the structure where the tenant was injured was not sufficiently commercial to be considered a “building” within the meaning of the Building Code’s strict liability provision. The court held that “what commercial and public structures listed in § 51 have in common is that they are places in which a large number of people gather for occupational, entertainment, or other purposes.”

What this means is that owners of residential rental property will no longer have to worry about getting hit with a substantial strict liability award for injuries caused by building code violations. However, this does not mean that property owners should not take care of their buildings. They must, and they can still get hit with lawsuits for injuries occurring on their property due to failure to repair or maintain the premises in good condition. Indeed, in this case, the final result is that the tenant’s award will be reduced by about $100,000 but the landlord’s insurance company will still be on the hook for a $145,000 judgment plus 12% interest.

{ 0 comments }

Decision Could Have Wide Impact Upon Marijuana Use By Tenants

The law on marijuana and rental housing remains clouded to say the least. And that’s no pun. This week on April 8th, the Supreme Judicial Court will consider the first of probably many cases dealing with marijuana use in rental housing. In this particular case, Boston Housing Authority v. Figgs (SJC 11532), the high court will assess whether a state housing authority may evict a subsidized tenant and terminate her federal housing benefits for the alleged possession of less than one ounce of marijuana — which is no longer a criminal offense in Massachusetts, but still a crime under federal law. With the decriminalization of small amounts of marijuana, the rollout of the medical marijuana dispensaries and the conflict with federal drug laws, this case may have wide-ranging impacts upon the relationships of landlords, tenants, housing authorities and even condominium owners and trustees over the use of marijuana, both recreationally and medicinally.

Oral arguments are available via live stream here. Legal briefs and filings in the case can be found here. A final opinion and ruling is expected this summer.

This case should also put the new Medical Marijuana Law into re-focus. Landlords have been increasingly anxious about how to manage and regulate tenants’ use of medical and recreational marijuana, if at all. The law not only grants qualified patients the right to obtain medical marijuana but it also allows patients the right to grow a two-month supply of marijuana at home if they cannot get to a marijuana dispensary because they are too sick or too broke. There is a bill in the Legislature granting landlords the right to prohibit medical marijuana on rental property without fear of being sued for disability discrimination.

I’ll be monitoring this new and dynamic area of the law. It will surely be a hot topic in the next couple of years.

__________________________________________

100316_photo_vetstein (2)-1Richard D. Vetstein, Esq. is an experience Massachusetts landlord tenant and real estate attorney. If you are concerned or have questions about the new Medical Marijuana Law, please contact him atinfo@vetsteinlawgroup.com.

 

 

{ 0 comments }

eviction-not

Distressed Homeowners Lose Key Defense, While Foreclosure Purchasers Gain More Title Security

Last week, the Supreme Judicial Court decided yet another important foreclosure case, U.S. Bank v. Schumacher (embedded below). The issue considered in Schumacher was whether a foreclosing lender’s defective 90 day notice to cure was a defense in a subsequent post-foreclosure eviction (summary process action) by the borrower. The SJC said no it was not a valid defense, as it should have been raised much earlier in the legal process in a separate action in the Superior Court.

Schumacher considered a 2007 law requiring that foreclosing lenders provide a borrower with a 90 day right to cure prior to starting a foreclosure proceeding. Before Schumacher, some trial courts had ruled that a bank’s failure to strictly comply with those requirements was fatal to a foreclosure sale. In such cases, even a post-foreclosure buyer of the property would have potentially defective title. From a title perspective this result was especially problematic since a bank’s compliance or non-compliance with §35A would not appear in the property’s title at the registry of deeds.

By holding that a defective cure notice is no defense to a post-foreclosure eviction, the SJC has made it more difficult for distressed homeowners to challenge the legality of foreclosures in eviction cases. On the flip side, the ruling will help buyers of foreclosed property as it makes their titles less susceptible to challenge by the previous owners.

U.S. Bank v. Schumacher (Mass. SJC 2014) by Richard Vetstein

{ 0 comments }

NIGHTCODE_CRR3The Massachusetts State Sanitary Code governs the minimal standards of fitness and conditions for human habitation of rental occupancy of property. Unfortunately, most landlords become familiar with the lengthy code only after tenants or the local Board of Health cites them for code violations. As a landlord-tenant attorney, I’ve created this comprehensive summary of the Massachusetts State Sanitary Code. Mind you, this does not cover every single provision,  just the important ones, in my opinion. Keep this handy guide on your nightstands in case you have insomnia! Seriously, this is important information for all rental property owners in Massachusetts.

Scope

The Massachusetts State Sanitary Code is found at 105 Code of Massachusetts Regulations 410, which can be downloaded by clicking here. The Sanitary Code applies to all rental properties in Massachusetts including owner-occupied multi-families, rooming houses and temporary housing. The only exceptions are dwellings located on a campground and civil defense shelters.

Kitchen and Bathroom Requirements

The Code provides that every rental unit where common cooking facilities are provided shall contain a kitchen sink, a stove and oven and space and proper facilities for the installation of a refrigerator. Each unit must include at least one toilet, one washbasin (which cannot be the kitchen sink) and one bathtub or shower in a separate bathroom. Privies and chemical toilets are prohibited except with Board of Health permission.

Potable Water

Landlords must provide “a supply of potable water sufficient in quantity and pressure to meet the ordinary needs of the occupant” either connected to town/city water or private well with Board of Health approval. The landlord may charge tenants for actual water usage if separately assessed and metered. Hot water must also be provided of not less than 110°F and no more than 130°F.

Heating

Landlords must provide for adequate heating in every habitable room of a rental unit including bathrooms. Portable space heaters and similar equipment are prohibited. Heating must be provided to no less than 68°F between 7AM and 11PM and at least 64°F between 11PM and 7AM, except between June 15 and September 15.

Natural Light and Lighting Fixtures

The Code requires at least one window in all rooms except the kitchen if less than 70 s.f. Lighting fixtures must be provided in all bathrooms. Two outlets must be provided in every habitable room, and sufficient lighting provided in all hallways, foyers, laundry rooms and the like. Buildings over ten units must have auxiliary emergency lighting. Screens must be provided for all windows on the first floor.

Maintenance Obligations

An oft-litigated area, the Code provides for maintenance obligations for both landlord and tenant. Landlords must maintain and repair whatever appliances he has installed in the unit. If a tenant has paid for and installed an appliance himself, however, he is responsible for maintaining it. Tenants are also responsible for the general cleanliness of toilets, sinks, showers, bathtubs, and kitchen appliances. So when the tenant claims there is mold in the bathroom, the landlord can argue that the tenant’s lack of cleanliness is the cause. Landlords must also exterminate any pest, insect or rodent infestation.

Asbestos and Lead Paint Materials

If there is asbestos material in the unit, the landlord must keep it in good repair, free of all defects, cracks and tears which would allow for the release of asbestos dust. Due to the liability exposure, it’s a good idea for any landlord to remove all asbestos materials. Lead paint is absolutely prohibited where children under 6 are occupying. See my previous posts on the Lead Paint Law for more info on this complex area.

Utility Metering

Owners must provide electric and gas service to tenants unless they are separately metered and billed to the unit and the lease provides for same. Separate water metering is permissible so long as the landlord gets written approval from the local Board of Health and complies with the metering requirements of General Laws chapter 186, section 22. For homes heated with oil, the owner must provide the oil unless it is provided through a separate oil tank servicing only that dwelling unit.

Minimum Square Footage

* 150 s.f. for the first occupant, and no less than 100 s.f. for each additional occupant
* Bedrooms — 70 s.f. for first occupant, 50 s.f. for each additional occupant
All ceilings must be no less than 7 feet.

Egress/Snow and Ice Removal

Property owners must keep all means of egress free from obstruction. As for the removal of snow and ice, the Code provides that the owner shall maintain all means of egress at all times in a safe, operable condition and shall keep all exterior stairways, fire escapes, egress balconies and bridges free of snow and ice. A landlord may require the tenant be responsible for snow and ice remove only where a dwelling has an independent means of egress, not shared with other occupants, and a written lease provides for same. Otherwise, landlords are responsible for snow and ice removal. Even if the tenant is responsible, the landlord could still face liability for slip and falls on snow and ice under recent Massachusetts case law.

Locks

Owners must install locks for every door of a dwelling unit capable of being secured from unlawful entry. The main entry door of a three unit dwelling or more must be installed with a automatic locking mechanism.

Smoke/CO2 Detectors

Smoke and carbon monoxide detectors must be installed in accordance with the Mass. Fire Code.

Railings

Owners must provide safe handrails for every stairway, and a wall or guardrail on every open side of a stairway no less than 30 inches in height. For porches and balconies, a wall or guardrail at least 36 inches high must be provided. Between all guardrails and handrails, balusters at intervals of no more than 6 inches for pre-1997 construction, and at 4.5 inches for post 1997 construction must be provided.

Inspections and Code Violations

The Code provides that the local Board of Health or Inspector can inspect any unit upon the  oral or written complaint of an occupant. Inspections are supposed to take place within 24 hours of the complaint, but that rarely happens. The inspector will prepare a code violation form. Serious violations such as failure to provide heat or water must be corrected within 12 hours. Less serious violations should be corrected within 5 – 30 days depending on the type of violation. Violators have a right to a hearing before the board of health to contest any code violations.

Code violations are criminal proceedings and should not be ignored. Penalties can result in $500/day fines and even condemnation of the premises.

______________________________

100316_photo_vetstein (2)-1Richard D. Vetstein, Esq. is an experienced Massachusetts landlord-tenant attorney. If you have been cited for violations of the State Sanitary Code or have questions about it, please contact me at rvetstein@vetsteinlawgroup.com or 508-620-5352.

 

{ 1 comment }

IMG_2872This isn’t law related, but this is just too good of a story not to share with you. I conducted a closing for Derek and Jillian, a nice, young couple buying their first home, a condominium unit in Norwood. The closing itself was rather uneventful but what happened next was certainly not.

The happy new buyers, closing papers in hand, took the elevator down to the office foyer. I started walking back down the hall, but all of a sudden, I heard a female voice shriek then the sound of crying. Thinking something awful had happened, I raced down the stairwell only to find Derek on one knee with diamond in hand, proposing to Jillian in our office foyer! I’m happy to report that she did say yes! Of course I had them pose for a picture which I’ve posted here.

These are the moments which make me really proud and grateful to be a real estate attorney. It certainly put a smile on my face for the rest of the day.

I would love to hear from you readers about similar “love nest” stories. Feel free to share in the comment section.

Warmly, Rich

 

{ 0 comments }

I was honored to talk about boundary line disputes on this week’s Real Estate Radio Boston broadcast on WBZ 1030, hosted by Rick Scherer and Ali Alavi, Esq. The broadcast is below. Just click the Play button to listen! Or click on this link:  Real Estate Radio Boston | Richard Vetstein.

Tune into the broadcast every Saturday night from 8pm-9pm on WBZ 1030 AM. It’s a fantastic show!

{ 0 comments }

1240410_10152181877527492_1822384462_nJoint Committee on Housing Considering Tenant Abuse Reform

Yesterday I was honored to testify before the Massachusetts Legislature’s Joint Housing Committee in favor of House Bill 1131, the Rent Escrow Bill. The bill will level the playing field between landlords and tenants and make Massachusetts more hospitable to rental property owners.

The bill prevents tenants from being allowed to withhold rent for minor or cosmetic property condition issues through the entire pendency of an eviction case. Instead, tenants would have to pay the withheld rent into an escrow account administered by the court or the attorneys until such time as the judge rules on the property conditions. Both landlord and tenant would have “skin in the game,” and it would cut way down on the expense and length of evictions.

For more detailed information about the bill please read my prior post:  Massachusetts Tenant Rent Escrow Bill Set To Pass This Term?

As a landlord tenant attorney who has handled over 5,000 evictions, I told legislators some horror stories about how “professional tenants” have victimized my landlord clients by creating minor code issues, withholding rent, then attempting to extort my clients out of thousands of dollars. It certainly appeared to resonate with the lawmakers and I even got a nice round of applause from the gallery after my testimony!

If you are a landlord, please contact your state rep and senator to support House Bill 1131. After many years trying to get this bill through, we may finally have the best environment to pass this much-needed reform to the eviction system.

{ 0 comments }

The Ice Dam Cometh!

by Rich Vetstein on February 19, 2014 · 1 comment

in Construction Law, Insurance, Safety

Massachusetts Ice Dam Treatment & Prevention

A little break from law stuff to talk about some important safety information. With up to a foot of snow on most Massachusetts roofs and a spring thaw on the way, there will be widespread ice dam and roof damage afflicting homeowners in the next weeks. I have a feeling it’s going to be very bad.

There are ice dams all over my roof. My son’s bedroom just sprung a leak. And I can’t get a crew out here to get on my roof until Friday at the earliest. (Sorry, but I’m not risking life or limb climbing up my ice covered roof!). I did use a roof shovel to clear a few feet of snow off the roof, but I need some professional help.

Here are some tips from my friend, George Lonergan of Lonergan Construction in Framingham (Tel:  508-875-0052) – whose roof clearing crews have been out 7 days a week. For folks closer to Boston, GF Sprague Roofing out of Needham is also good.

  1. Try to remove snow from the roof but only if it can be done safely. A roof rake or push broom can be used but may cause damage to the shingles. If it’s not possible to remove the snow safely, call a professional.
  2. Chisel grooves into the dam to allow the water behind it to drain off. This is a good emergency measure, especially if rain or a sudden thaw is coming. Be careful not to damage those shingles!
  3. Fill an old pair of your wife’s pantyhose with calcium chloride snow melt and lay it across the dam. It will help to melt the dam and also keep that area of the roof clear. DO NOT USE ROCK SALT! It may stain the roof and siding. It is best for small dams or prevention. It’s also a good idea to scrape the snow off the roof first.

To prevent ice dams in the longer term, keeping warm air from escaping into the attic is the first course of action. In addition to helping resolve ice dam issues, it will result in a more comfortable and less expensive to heat home.

Ice Dam Insurance Coverage

Very few insurance policies cover ice dam or snow removal from your roof or anywhere else on your property for that matter. However, certain cases of interior damage caused by an ice dam or roof collapse may be covered. As with any insurance claim, call the claims department immediately and take photos of the damage.

Good luck and happy raking and chiseling!

{ 1 comment }

eviction-notBill Would Curb Tenant Abuses of Eviction Process | State House Hearing Set For Feb. 25

For the last decade, Massachusetts landlords have been lobbying for a tenant rent escrow bill which would prevent tenants from using the infamous “free rent trick” in evictions. This may finally be the year that the Legislature passes this much needed reform to curb tenant abuses of the eviction process. Two bills, H.B. 1131 and H.B. 1110, have made their way to public hearing at the State House for a February 25th hearing before the Joint Committee on Housing. Landlords are urged to come and testify before the committee and otherwise support the bill by contacting their local representatives and senators.

The bills are designed to reform tenant abuses of the rent withholding law, including the infamous “free rent trick.” The free rent trick works like this:  Tenant stops paying rent for various reasons, such as economic hardship or by design. After receiving a 14 day notice to quit for non-payment of rent, the tenant will immediately call the board of health to get the owner cited for minor or cosmetic code violations such as a hole in a window screen. Under current Massachusetts law, any code violation cited, however minor, allows the tenant to withhold rent until the eviction case is resolved. What usually happens is that the tenant skips out of town or agrees to a move out but never pays the months of accrued unpaid rent, leaving the landlord stuck with thousands of lost income to pay their mortgage and expenses.

Unlike most other states, there is no requirement in Massachusetts that the tenant post the withheld rent into some form of escrow account. There have been many instances where tenants have intentionally inflicted property damage to claim code violations or just made them up altogether.

A mandatory rent escrow law would require any tenant who exercises their right of rent withholding to pay the withheld rent into an escrow account until the unsafe conditions or code violations are repaired. After repairs are done, either the landlord and tenant agree on how the escrowed rent should be divided, or a judge orders a fair settlement. In most cases, the owner will get back most of the withheld escrowed rent. But the most important impact of a mandatory rent escrow law is that those nonpaying tenants who do not escrow can be promptly evicted for nonpayment of rent. Although nonpayment evictions will still take on average three months to resolve, much-longer-delayed evictions and the free rent trick will be stopped.

The bills will most benefit small landlords and owners-occupants of multi-family residences who rent out apartments. These property owners are typically on strict budgets, and any lost rent and attorneys’  fees will prevent them from paying their mortgages, real estate taxes and property expenses, potentially leading to default and foreclosure.

For more information on how you can support these bills, please contact the Massachusetts Rental Housing Association and the Massachusetts Small Property Owner’s Association.

________________________________________

100316_photo_vetstein (2)-1Richard D. Vetstein, Esq. is a vocal advocate for Massachusetts landlord rights and can be reached at rvetstein@vetsteinlawgroup.com or 508-620-5352.

{ 1 comment }

mass ibanez titleShould Result In Much-Needed Inventory Boost To Housing Market

Good news to report for property owners saddled with toxic titles resulting from the seminal U.S. Bank v. Ibanez foreclosure ruling. Massachusetts lawmakers are poised to pass into law a new bill aimed at legislatively clearing up all of these defective titles.

By way of background, properties afflicted with Ibanez title defects, in worst cases, cannot be sold or refinanced. And homeowners without title insurance have been compelled to spend thousands in legal fees to clear their titles, while some have not been able to clear their titles at all.

The new legislation, Senate Bill 1987, would render clear and marketable any title affected by a defective foreclosure after 3 years have passed from the foreclosure. Most of these toxic titles were created prior to 2009, so the vast majority of them will be cleared up.

The bill does preserve any existing litigation over the validity of foreclosures. The legislation does not apply if there is an existing legal challenge to the validity of the foreclosure sale in which case record notice must be provided at the registry of deeds. The bill also does not shield liability of foreclosure lenders and attorneys for bad faith and consumer protection violations over faulty foreclosures.

The bill has recently been passed by the Senate and now moves on to the House. Word is that it should pass through the House and on to the Governor’s Desk.

Shrewsbury State Senator Michael Moore and the Massachusetts Land Title Association have sponsored this effort for several years now. I have been supporting this effort as well.

This is great news for the real estate market. I don’t have firm numbers, but there are probably hundreds, if not thousands, of these unsellable properties just sitting on the sidelines, and now they can get back onto the market. This is exactly what the inventory starved market needs.

(Hat tip to Colleen Sullivan over at Banker and Tradesman for passing along this important information).

{ 1 comment }

Real Time Analytics