Real Estate Litigation

Get Out! A Landlord’s Guide to Massachusetts Evictions

by Rich Vetstein on October 7, 2011

Massachusetts Summary Process Evictions: An Unlevel Playing Field For Landlords

How do you evict a tenant in Massachusetts? In Massachusetts, evictions are called “summary process.” According to the rules governing eviction cases, summary process is supposed to be “just, speedy, and inexpensive.” In practice, however, summary process can be anything but that. In fact, as I always inform my landlord clients, Massachusetts is one of the most tenant friendly states in the country, and an eviction can be costly, frustrating and unfair to landlords. In some cases, it can take many months to evict a tenant.

Further, Massachusetts eviction practice is loaded with traps for the unwary and procedural complexities for landlords. Landlords who represent themselves do so at their own peril and will often arrive at court with their cases dismissed for not following these requirements. It’s not a do-it-yourself situation.

Grounds For Eviction

A.      Non-payment

There are several common grounds for evicting a tenant. The most common is for non-payment of rent. In these cases, the landlord must send the tenant a statutory 14 day “notice to quit” before starting the eviction process. The 14 day notice to quit must be drafted carefully, and the best practice is to have it served by a constable or sheriff to ensure proof of delivery. The landlord must prove in court that the tenant received the notice, and service by constable or sheriff will automatically qualify as “good service.” Certified mail is not good enough as tenants can avoid pickup. Having an experienced eviction attorney draft the notice to quit can prevent have your case being “dead on arrival.”

B.      No-Fault

Another common ground for eviction is for termination of a 30 day tenancy at will, otherwise known as a no-fault eviction. Again, a 30 day notice to quit must be served on the tenant before commencing an eviction. Landlords often trip up on this type of notice with short months. In practice, judges will often give tenants in no-fault evictions a bit more leeway in terms of vacating the premises.

C.      For cause

“For cause” evictions encompass the range of bad behavior by tenants in violation of lease provisions. 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. “For cause” evictions are the most involved of all evictions as the landlord must offer proof by way of live testimony of the tenant’s violations of the lease. Getting police officers to show up for an eviction hearing can be challenging. For drugs and other illegal activity, Massachusetts also has a special expedited eviction process.

Read our post on the Massachusetts Notice To Quit: Don’t Be Dead On Arrival At Eviction Court

Going to Court

Starting an eviction requires the preparation and service of a Summary Process Summons and Complaint. You can choose to file your case in the local District Court or the Housing Court which is specialized to hear evictions. The Housing Court fees are less expensive, but can be busier. Some Housing Court judges have the reputation of being tenant or landlord friendly as well. Some would probably be happier retired and playing golf. It’s a tough job these days.

The summary process summons and complaint form is complicated to the layperson. It must be first served by a constable or sheriff on the tenant. Then, no less than 7 days after, it must be filed with the court by the “entry date,” which is always a Monday. The hearings are almost always on Thursday morning. Again, it’s best to have an experienced Massachusetts eviction attorney handle the legal paperwork.

Tenant Defenses and Counterclaims

Through the use of discovery requests, defenses and counterclaims, tenants in Massachusetts have ample legal means to delay and beat evictions. All tenants have a right to file “discovery” – formal requests for information and documents – from the landlord, which will automatically delay the hearing for two weeks. The tenant also may assert defenses and counterclaims against the landlord. These can range from improper notice or service, state Sanitary Code violations, no heat/hot water, failure to make repairs, retaliation, discrimination, and violations of the security deposit law—which carries triple damages and attorneys’ fees. (See my prior post on security deposits). Regardless of the merits of such claims, these defenses and counterclaims make the eviction process more complicated, time-consuming, and expensive.

Read my post on the Massachusetts State Sanitary Code — Everything A Landlord Wanted To Know But Was Afraid To Ask

Agreements for Judgment and Mediation

Eviction sessions are very busy. In some courts, there are over 100 cases stacked up on any one day and only one judge to hear them all. Accordingly, the courts will encourage parties to work out their differences on their own through mediation which is an informal sit-down between the parties to discuss ways to resolve the case. Some courts have housing specialists who can preside over the mediation session. Mediation is always non-binding so if no agreement can be reached you can proceed to a trial.

In the Housing Court, there are trained housing specialists who facilitate the mediation process. There are many advantages for landlords to mediation, and I almost always recommend giving it a try. The end result of a mediation is for the parties to sign an agreement for judgment. In a non-payment case, you can structure a payment plan and/or voluntary move-out. For a “cause” eviction, you can provide for a “last chance” agreement or move-out. The major benefit for landlords is that an agreement for judgment becomes a binding court order and the judge is supposed to enforce it upon proof of a violation. It also shows the judge that the landlord has been reasonable and accommodating. Experienced Massachusetts eviction attorneys will also make the tenants waive their rights to appeal and right to delay the case any further so as to avoid last minute requests for more time to vacate.

On the other hand, sometimes the situation is untenable and you have to go before the judge. Some judges hold a basic hearing, giving both sides the opportunity to speak. Some judges, particularly in the Housing Court, are more formal and require an actual trial with live witnesses and exhibits. I’ve had hearings last one minute and jury trials in eviction cases go on for days. But I’m always prepared to put on a case on for trial, as I always have my client present in court or on standby.

Appeals

Tenants in eviction cases do have a fairly robust right of appeal which can greatly delay resolution of the case. (A good reason in and of itself to do an agreement for judgment waiving appeal rights). However, in certain cases, the landlord can ask the court to impose an appeal bond so the tenant must pay rent into court to proceed with the appeal. Most tenants do not have the financial ability to do that, so that will terminate the appeal.

If you have any questions or need assistance with a Massachusetts summary process eviction, please contact me via email at [email protected] or by phone at 508-620-5352.

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Richard D. Vetstein, Esq. is an experienced Massachusetts summary process & eviction attorney who has handled over 2,000 eviction cases all across Massachusetts. For help with a landlord tenant matter, please email him at [email protected] or call him at 508-620-5352.

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Court Upholds Oral Handshake Deal In Land Swap

by Rich Vetstein on August 22, 2011

26297-cooperation-handshakeSeller Couldn’t Sit Back & Watch Construction Project Unfold

Massachusetts appeals judges have been mighty busy this summer issuing real estate decisions. From the forced removal of condo buildings to toxic mold, to foreclosure eviction defense, it’s been no summer vacation in Massachusetts real estate law.

Handed down today is a case right from a first year law school property exam, Hurtubise v. McPherson, embedded below.

As most real estate professionals know, contracts for the sale of real estate must be in writing and signed by the party to be charged, i.e, the seller. This is a rule of law going back to English common law and is called the Statute of Frauds which can be found in the General Laws of Massachusetts, Chapter 259, Section 1. As with most black letter law, there are a few exceptions to the general rule, and this case is a textbook example of the “detrimental reliance” exception to the Statute of Frauds.

Hand-Shake Land Swap Agreement

Here are the facts of the case. Hurtubise and McPherson owned adjoining tracts of land in the town of Templeton. Hurtubise operated a storage business on his property. He wanted to build an additional storage shed along the border between his property and McPherson’s property. Hurtubise realized that he could not meet the setback requirements of the local zoning code unless he acquired land from McPherson. Hurtubise approached McPherson, explained his need, and proposed a land trade, offering to convey to McPherson a portion of the front of his (Hurtubise’s) property in exchange for the portion of McPherson’s land at which Hurtubise intended to erect the new storage shed. McPherson agreed to the proposal and the parties shook hands.

Hurtubise proceeded with his plans for construction of the new building. He obtained a building permit and began to excavate along the border of McPherson’s lot. During the seven to eight weeks of construction, Hurtubise saw McPherson at the site. McPherson never objected to the location of the new building. Hurtubise eventually constructed a 300 x 30-foot storage shed for $39,690.

After construction, McPherson objected and accused Hurtubise of taking more land than he initially had represented. McPherson informed Hurtubise that an exorbitant payment of $250,000 would resolve the dispute which Hurtubise refused to pay. McPherson then notified the town that Hurtubise’s new building encroached on his property. The town’s building commissioner revoked Hurtubise’s building permit and ordered him to cease occupancy of the storage shed. After McPherson threatened to demolish the building, Hurtubise brought suit to enforce the oral agreement.

Exception To Written Contract Rule

As mentioned above, to be enforceable, real estate contracts for the sale of property must be in writing and signed by the seller, at minimum. As Judge Mitchell Sikora wrote in the opinion, “however an equitable qualification puts some flexibility into the joints of the Statute.” An oral agreement for the sale of land can be valid if the party seeking enforcement, in reasonable reliance on the contract and on the continuing assent of the party against whom enforcement is sought, has so changed his position that injustice can be avoided only by specific enforcement. In non-legalese, this means that if you start a construction project and spend thousands of dollars upon the promise of a land deal, albeit not in writing, you may be able to enforce that promise.

Because Hurtubise just sat by idly and watched McPherson construct his shed at considerable cost without objection, the court ruled that he couldn’t then complain there wasn’t a written agreement, in an attempt to wriggle out of the land swap deal. The court then ordered Hurtubise to convey McPherson the land necessary to build the shed.

This case is one of the very few instances where a court has upheld an oral hand-shake real estate agreement. The take-away: make sure your real estate contracts are always in writing and signed!

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Richard D. Vetstein, Esq. is an experienced real estate litigation attorney who’s handled numerous real estate contract breach cases in Land Court and Superior Court. Please contact me if you are dealing with a Massachusetts real estate contract legal dispute.

Hurtubise v McPherson Case

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220px-OldSuffolkCoCtThe Real Estate Specialty Court

Established in 1898 and still staffed with only a handful of judges, the Massachusetts Land Court is the smallest of all the Massachusetts trial courts. But for real estate practitioners, it is the most important court in the Commonwealth.

The Land Court is known for its real estate expertise, and is the starting place for almost all foreclosures. Its judges, most of whom were practicing real estate attorneys, are widely regarded as experts in the intricacies of Massachusetts real estate law. Indeed, the diminutive Land Court has recently been at the forefront of national foreclosure law with Judge Keith Long’s seminal decision in U.S. Bank v. Ibanez which made national front page news for several days.

Registered Land

The Land Court was originally established to oversee the Massachusetts land registration system. Approximately 15-20% of all property in Massachusetts is registered land. Non-registered land is referred to as recorded land.

The purpose of the registered land system — modeled after the Australian Torrens system — is to make land titles as clear and defect-free as possible. To register land, property owners have to go through a fairly rigorous process where a land court title examiner searches and certifies title and a formal plan of the land is approved. All defects and title issues are fully vetted and resolved, if possible, and upon registration, the land is deemed free of defects except noted by the examiner, including claims of adverse possession.

Registered land is freely transferable, and there is no discernible difference in examining title to registered land, other than recording which involves a few more steps than non-registered land.

Foreclosures

The Land Court is widely known as the starting point for the vast majority of foreclosures in Massachusetts. Although Massachusetts is considered a “non-judicial” foreclosure state — that is, where a mortgage holder does not need a court order to foreclosure — the state has held onto the U.S. Soldier’s and Sailor’s Civil Relief Act which gives military members protections against foreclosure. In Massachusetts, mortgage holders bring a “Soldier’s and Sailor’s Act” proceeding in the Land Court to ensure that the property owner is not an active military member. Once the Land Court issues a judgment, the foreclosure can move forward. A Soldier’s and Sailor’s proceeding is not the forum in which to challenge a foreclosure. A homeowner needs to file a separate lawsuit in Superior Court or Land Court to do so.

Quiet Title, Partition and Title Disputes

In the last 20 years, lawmakers have widely expanded the Land Court’s jurisdiction to hear more types of cases. Today, the Land Court regularly hears cases involving zoning and subdivision appeals, quiet title and actions to try title, disputes involving mortgage priorities, tax takings, adverse possession, real estate contract disputes, petitions to partition, and more. I do most of my litigation work in the Land Court’s civil session.

Strategically, certain cases are better off in the Land Court and vice-versa. An important distinction with Land Court is that there are no jury trials. Thus, if you want a jury trial, the case should be filed in Superior Court, not Land Court. For cases which are based on the interpretation of contractual language or complex real estate legal issues, Land Court is probably a good choice. For cases which have an “emotional” component and less complex, a Superior Court jury session is probably the better choice.

New Permitting Session

Most recently, in 2007, the Legislature created a special Land Court permitting session to hear zoning and subdivision appeals for larger projects involving over 25 units or over 25,000 square feet of gross floor area. With the goal to expedite zoning disputes which have roadblocked development, cases in the new session will be assigned to a single judge for the life of the case and will be assigned one of three expedited tracks. For the first time, these tracks provide deadlines for both getting to trial (ranging from six to 12 months) and for receiving a decision after trial or summary judgment (ranging from two months to four months).

Land Court decisions aren’t widely available, but recent rulings can be found here.

If you have a complicated real estate dispute, your attorney should always seriously consider bringing the claim in the Land Court where the judge will understand the issues and keep tight control over the case.

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Richard D. Vetstein, Esq. is an experienced Massachusetts Land Court Attorney who has litigated numerous cases in the Massachusetts Land Court. For further information you can contact him at [email protected].

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ynm6g3o8kphmz7dp-1024x785.jpgA new Harvard report predicts a big jump in home remodeling – and with markets like Greater Boston that have lots of older homes leading the way. With the real estate market in recovery mode, a lot of folks in the last few years have put their money towards additions, in-law suites, finished basements, expanded garages, tear-downs, and other major home remodeling projects. In some cases, however, these projects require a special permit from the local zoning code. Here are some frequently asked questions about special permits under the Massachusetts Zoning Law. (I will cover variances for the next post).

Why Do I Need A Special Permit?

The most common reason why a Special Permit is necessary is that the proposed dwelling or the new addition does not meet the setback requirements set forth in the local zoning bylaw. Setbacks are buffer zones surrounding your boundary lines which provide for a “no-build zone.” For example, in the Sudbury, Mass. zoning code for the basic residential district, the side yard setback is 20 feet, the rear yard setback is 30 feet, the front yard set back is 40 feet, and the maximum structure height is 2.5 stories, or 35 feet. So if your proposed in-law suite juts into the side yard setback of 20 feet, then you will need to obtain a special permit from the zoning board of appeals (ZBA).

The other reason you may need a special permit is if your property is “non-conforming” and you wish to make a major expansion or alteration to it. “Non-conforming” means that the zoning code has changed since your home was originally built. For example, in Sudbury, the basic residence zoning district is now a minimum of nearly 1 acre. Many Sudbury homes built in the 60’s are way under 1 acre, so they are “non-conforming.” Virtually any tear-down and major reconstruction or alteration of a non-conforming property will trigger review by the building inspector and the application for a special permit from the local zoning board.

What Do I Need To Do To Get A Special Permit?

Obtaining a special permit requires a formal application to the zoning board with your plan, notice to your abutters, and the presentation of your application in front of the board at the public hearing. It is a formal legal proceeding, and can be complex giving the nature of the zoning issues and the extent of any neighborhood opposition. The chances of success rise dramatically if you have an experienced Massachusetts zoning attorney handling the zoning application. I was an associate member on the Sudbury zoning board for 9 years, and have appeared before countless boards in other towns.

What Are The Legal Requirements For A Special Permit?

The specific requirements for a special permit differ from town to town. But they all have the same general theme. Here is the Sudbury Mass. standard:

  • That the use is in harmony with the general purpose and intent of the bylaw;
  • That the use is in an appropriate location and is not detrimental to the neighborhood and does not significantly alter the character of the zoning district;
  • Adequate and appropriate facilities will be provided for the proper operation of the proposed use;
  • That the proposed use would not be detrimental or offensive to the adjoining zoning districts and neighboring properties due to the effects of lighting, odors, smoke, noise, sewage, refuse materials or other visual nuisances;
  • That the proposed use would not cause undue traffic congestion in the immediate area.

What Happens At The Public Hearing?

The Board Chairman will open the hearing by reading the application or legal ad into the record. The applicant and/or their attorney is then called to make their presentation to the Board. Correspondence received from other town boards and or committees is read into the record as well as any correspondence from abutters. The Board members may ask questions of the applicant. The Chairman will ask if any audience members wish to speak.

For residential additions, tear downs and the like, the board is generally concerned with the general impact, if any, to the abutters, any safety or traffic issues, stormwater runoff, septic issues, and visual issues. Early communication with your neighbors is vital to ensuring the approval of your project. Neighborhood opposition to your application will decrease the likelihood of approval. While the board is technically not supposed to be a “second architect” on the project, many board members often provide comments and suggestions about the design of the project.

After all of the input the Board may close the public portion and discuss the request among themselves. The Board typically makes a decision at the end of their deliberations.

What Happens After The Board Reaches A Decision?

Once the Board makes a final decision, it is written up and and recorded with the Town Clerk. After a 20 day appeal period, the permit is mailed to the applicant, who then files the permit with the county Registry of Deeds. A copy is forwarded to the Board of Appeals Office and the Building Department. The Building Department may not issue a building permit or occupancy permit without receiving a copy of that recorded decision.

Can I Appeal The Board’s Decision?

Yes, you may appeal the decision in the Superior Court. You must act very quickly however, as appeals must be filed within 20 days of the filing of the decision with the Town Clerk. Zoning appeals are very complex and involve the submission of evidence at a trial before a Superior Court judge. It’s not something that should be undertaken without an attorney.

Richard D. Vetstein, Esq. is an experienced Massachusetts Zoning Attorney, who formerly sat on the Sudbury, Mass. Zoning Board of Appeals. Attorney Vetstein handles zoning matters across the state including the Metrowest towns of Framingham, Natick, Wayland, Weston, Ashland, Sudbury, Wellesley, Northborough, Southborough and Westborough. He can be reached at [email protected] or 508-620-5352.

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This post is a continuation of my discussion about the recent Massachusetts Appeals Court case of NRT New England, Inc. v. Moncure (click for link). Last week I talked about why the decision was very important in upholding the standard liquidated damages clause in the the typical purchase and sale agreement.

This week I’ll talk about the court’s ruling that the listing broker violated its fiduciary duties when it messed around with the escrow deposit.

Quick Take-Away

The important take away from this case for all real estate agents is that if you are holding a deposit as an escrow agent, don’t even think about messing with it even if there’s a legitimate dispute about your commission or other monies owed to you. It’s not your money! The best advice is to let the dispute run its course and continue holding the funds in escrow.

Dispute Between Listing Broker and Buyer

The facts of this case are a bit unusual. Listing Broker represented the seller in a purchase of residential property in Wayland, MA. Under the standard purchase and sale agreement, the buyer posted a $92,500 escrow deposit which Listing Broker held as an escrow agent. The same buyer apparently used Listing Broker on another transaction and owed it nearly $35,000 in fees.

The buyer lost its financing and defaulted on the contract, thereby forfeiting the $92,500 deposit. (I covered that in my prior post). Listing Broker took an assignment of the buyer’s right to the escrow funds, but didn’t tell its client that right away. Then Listing Broker tried to strong-arm its client by threatening litigation if he didn’t accept $2,500 and release the escrow deposit to Listing Broker.

Breach of Fiduciary Duty and Chapter 93A Violation

The court was none too happy with Listing Broker’s course of action here. The court reaffirmed that Listing Broker had a fiduciary duty — one of the highest duties under law — to hold the funds for the benefit of the seller and not to engage in any self-dealing. The court found that Listing Broker’s collection of a debt against the escrow deposit while it was acting as escrow agent was a clear breach of fiduciary duty.

The kicker was that the court imposed triple damages and an award of attorneys’ fees under the Massachusetts Consumer Protection Act, Chapter 93A. So Listing Broker is now on the hook for $277,500 plus thousands in legal fees. Ouch!

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This week the Massachusetts Appeals Court handed down an important decision involving the standard form purchase and sale agreement and a listing broker’s fiduciary duties as the escrow agent. The case is NRT New England, Inc. v. Moncure (click for link). I’m going to break this decision down into 2 blog posts because it’s a lot to cover.

Seller Entitled To Retain 5% Deposit When Buyer Couldn’t Close

The first important part of the decision is that the court upheld the “industry norm” 5% deposit under the purchase and sale agreement as “liquidated damages” when the buyer lost his financing and couldn’t close–even in a hot and rising market (2004) and even when the seller ultimately sold the home for a better price.

“Liquidated damages” is essentially an estimate of the anticipated damages a seller would incur if the buyer defaults and cannot close. The parties under a purchase and agreement agree on a number, typically 5% of the purchase price, as the liquidated damages that the seller is entitled to retain–in case the buyer is unable to close. (The buyer is usually protected under the financing contingency until she received a firm loan commitment).

The typical liquidated damages clause in the Massachusetts purchase and sale agreement looks like this:

If the BUYER shall fail to fulfill the BUYER’s agreements herein, all deposits made hereunder by the BUYER shall be retained by the SELLER as liquidated damages, which shall be the SELLER’S sole remedy at law or in equity.

In the NRT case the seller was scheduled to buy another property on the same day as the closing on his sale–a “back to back.” He needed the proceeds from the sale to use for his purchase transaction. However, when the buyer’s financing fell through, the seller was able to obtain a bridge loan, so he could close on his purchase. And he ultimately re-listed his property and sold it for a higher price. So the seller didn’t suffer that much in damages, certainly not equal to the $92,500 in escrow.

Nevertheless, the court upheld the seller’s entitlement to the entire $92,500 deposit. The court said that it wouldn’t take a “second look” at the liquidated damages amount, finding that the 5% was the industry norm in Massachusetts, and represented a reasonable forecast of damages in the event of a buyer’s default given the considerable risk associated carrying the expense of 2 mortgaged properties indefinitely.

Lesson To Be Learned

The lesson here for buyers is that in almost every case where a buyer defaults without legal excuse–say goodbye to that 5% deposit! And that could be a lot of dough down the tubes. So make sure you have an experienced real estate attorney review your purchase and sale agreement so you don’t find yourself in the same quagmire as the buyer in this case.

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Part 2 will be a discussion about what happened when the listing broker messed around with the seller’s deposit. Two words: triple damages. Uh oh.

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Agents: Don’t Mess With A Buyer’s Deposit

Yesterday an interesting case came down involving a nasty tug-of-war between listing brokers and an exclusive buyer’s agent, with the buyer’s six figure deposit caught in the middle. The case is Zang v. NRT New England and can be read here.

In the case, the seller signed the standard exclusive listing agreement with the listing broker which provided for a 5% commission, and cooperation with buyers’ brokers, with an equal split of the commission. Mr. Zang, a potential buyer, showed up at an open house for the condominium, unaccompanied by a broker.  The buyer made an offer through the listing agent, but an agreement couldn’t be reached.  The buyer then hired an exclusive buyer’s agent who submitted a second offer.  The offer was ultimately accepted by the seller, and the parties proceeded to sign a purchase and sale agreement.

The listing broker, however, was none too pleased that the buyer’s broker had entered the picture at the final hour looking for a commission. The listing agent even left a few amusing voicemail messages for the buyer, asking him whether “you think that it’s really fair that [the buyer’s agent] should come in at this late date and capture half of the commission… and what does Alan [one of the listing agents] get for all of his work? Nothing. But, you know, I guess that’s money in your pocket.”

The buyer posted a $122,500 deposit (10% of the purchase price) upon the execution of the purchase and sale agreement. The agreement provided that the listing agent would act as escrow agent and that a 5% commission would be paid by the seller to the listing agent and the buyer’s agent, split equally. In short, the seller’s net sales proceeds were to be reduced by $61,250, of which $30,625 was to be paid to the buyer’s agent at closing.

After the closing, however, the listing agent refused to pay the buyer’s broker his commission, and refused to disburse the remaining escrow deposit, essentially holding it hostage.  Big no-no, said the Appeals Court.  While the listing agent may have a legitimate dispute over the commission, the court ruled, its fiduciary duties as escrow agent took precedence. The listing agent had no right to retain the buyer’s money, and was contractually obligated to disburse it according to the purchase and sale agreement, period.  The court did not sanction this sort of self-help by the listing agent.  And the court let stand the buyer’s claims for 93A/consumer protection violation which carries triple damages and attorneys’ fees.

So the lesson for real estate agents here is don’t mess with a deposit even if you feel you have a legitimate beef over a commission.  It’s not worth it, and it will subject you to liability.

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Overview: Lis Pendens, Latin for “A Suit Pending”

A lis pendens is Latin for “a suit pending.” Under the Massachusetts lis pendens law, a lis pendens is a notice endorsed by a judge certifying that there is litigation pending involving the title or occupancy rights to a property. Where real estate deals go sour, a court will often issue a lis pendens where a buyer seeks “specific performance” of a real estate contract in order to force a seller to go through with a transaction. Lis pendens are also common in other real estate cases such as boundary, title, zoning, and ownership disputes. The lis pendens is recorded at the registry of deeds against the property and its owner(s), creating a serious cloud on the title to the affected property. A lis pendens will, in many cases, effectively prevent the owner from selling the property until the claim is resolved–thus, earning its well-deserved reputation as dangerous arrow in a real estate litigator’s quiver.

Heavy Ammunition For Buyers

Since the Massachusetts Supreme Judicial Court held in 1998 that the standard Greater Boston Real Estate form Offer To Purchase is a binding contract, buyers have used the lis pendens with great success against sellers who unjustifiably try to back out of Offers to Purchase and Purchase and Sale Agreements. Aggressive buyer attorneys would often obtain a lis pendens without prior notice to the seller (called ex parte relief), and this would give buyers a huge advantage and effectively derail any pending sale of the property until the judge resolved the claim.

Recent Changes To The Law

In response to complaints that litigants were abusing the law with frivolous claims for lis pendens’, lawmakers amended the law in 2003. Now, claimants seeking ex parte relief must show there is a clear danger that the seller, if notified in advance, will convey, encumber, damage or destroy the property. Sellers also have a new remedy to stop frivolous claims: a “special motion to dismiss” which carries with it an award of attorneys’ fees and costs. The playing field is a bit more leveled now, yet the lis pendens remains a powerful tool for real estate attorneys.

Dealing With A Lis Pendens

Dealing with a meritorious lis pendens remains very difficult. Standard owner’s title insurance policies do not insure against them. Further, most title companies hesitate to affirmatively insure a lis pendens as they would effectively be underwriting the ultimate success of the lawsuit. Sometimes, however, coverage can be obtained for an additional premium and/or with some form of indemnification or security. In the absence of insurance, a lis pendens will remain a cloud on title until the claim is ultimately resolved in the courts, which these days can take many years. Given the high cost of litigation, a financial settlement is often the only way to resolve the matter in a cost-effective manner.

As an experienced real estate litigator who has obtained and defended scores of lis pendens’, please contact me with any questions about a Massachusetts lis pendens.

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Richard D. Vetstein, Esq. is an experienced and creative Massachusetts real estate litigator who loves to help property owners defend their contract or property rights in court. Please contact him at [email protected] or 508-620-5352 for a no-obligation consultation.

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