Safety

With the economy and housing market on the upswing, builders are finally building again. I’ve seen a definite uptick in new construction purchases. Buying a new construction home, however, is very different and much more involved compared to buying a previously owned property. In this post, I want to cover the various aspects of purchasing a new construction home, from selecting a builder, financing, legal, through construction and to the closing. As the Beatles song goes, I also have a little help from my Realtor friends in this post who have graciously offered some of their expert guidance. Follow our advice, and hopefully you will avoid becoming Tom Hanks and Shelley Long in the hilarious movie, The Money Pit!

Selecting and Working with a Builder

Choosing the right builder is obviously critical. You can search for builder licenses and state disciplinary history at the Mass.gov site here. (Search under Construction Supervisor). If the builder is not a licensed Construction Supervisor, they may be licensed as a Home Improvement Contractor (HIC) which can be searched at the Office of Consumer Affairs website here. If they hold neither license type, that’s a red flag. Also, look up the builder’s name in the Mass. Land Records site, and check whether they have any mechanic’s liens filed against them. That is another red flag indicating they may be undercapitalized and don’t pay their subcontractors.

Get a list of the last 5 homes the builder has constructed, and try to talk to those homeowners. Don’t rely on the builder’s list of references as no intelligent builder would give out a bad reference.

Hire A Buyer’s Agent

Besides conducting a town-wide survey, one of the smartest things you can do is hire an independent buyer’s real estate agent, preferably one with lots of experience in new construction. While buyers today can do a lot of their own due diligence and research on prospective builders, an experienced Realtor knows all the local builders in town and knows who builds castles and who builds shanty-shacks. A buyer’s agent will also provide a much-needed buffer between the builder’s sales agents and listing agent, many of whom unfortunately engage in high-pressure sales tactics and fast-talking. As buyer agent, Marilyn Messenger advises,

“Many buyers don’t realize that if they visit a new construction site without a buyer agent, they run the risk of having to work directly with the builder’s agent whose job is to work in the best interest of the builder. A buyer’s agent will watch out for the buyer’s interests.”

Amenities, Allowances & Upgrades

The builder should provide you with a detailed specification sheet with a standard panel of features and options for flooring, appliances, paint, trims, HVAC, and lighting, etc. These will be built into the purchase price. Most builders also have allowances for things like additional recessed lighting, upgraded stainless steel appliances, decking, and fancy hardwood floors. As Cambridge area Realtor Lara Gordon notes, the buyers’ ability to select design elements is one of the major advantages of new construction.

It’s imperative that all allowances be spelled out in writing and attached to the purchase contract documents, which I will discuss later. Change orders are common during the construction process, and these too should be memorialized in writing. They will be added to the purchase price or paid in advance.

Contract Documents

New construction purchases in Massachusetts follow the same basic legal process as already-owned homes. The parties first execute an Offer to Purchase which spells out the very basics of the transaction: down payment and purchase price, closing date, and financing contingency. A lot of builders ask for more than the standard 5% deposit, but I would push back on that in this market.

After the offer is signed, the parties will sign the Purchase and Sale Agreement. As a buyer, the detailed specifications, amenities and agreed upon allowances must be incorporated into the contract, along with the floor and elevation plans, if any.

The proposed purchase and sale agreement will likely track the so-called “standard form,” but the builder will typically add a detailed rider, which is completely different than the usual seller rider seen in existing home contracts. The builder rider will have provisions dealing with how change orders are handled, that the builder is not responsible for cracking due to climatic changes, and may attempt to hold the buyer’s feet to the fire with respect to getting his financing in place. A lot of builders will try to limit the availability of holdbacks at closing. I would push back on this important item of leverage for buyers. Some of the large national builders such as Pulte will even claim that their contracts are “non-negotiable.” This is nonsense. Everything is negotiable these days.

Hiring an experienced real estate attorney will tip the balance back to the buyer, and the attorney should have a comprehensive buyer rider in place to protect you in case there are title issues or you suddenly lose your financing. Because there are often delays with new construction, one of the most important rider provisions for buyers is a clause which will give buyer’s protection in case they lose their rate lock due to a delay.

Mortgage Financing

Most new construction buyers in Massachusetts will take out a conventional mortgage loan, with the builder responsible for financing the actual construction through his own construction loan. Some builders, especially national ones, will have their own mortgage lending for their projects, but they often don’t offer the best rates and terms. Sometimes, buyers will finance the construction through a construction loan under which the borrower pays interest only through the construction process, and is then converted to a conventional mortgage once the home is completed. I would counsel buyers to avoid taking on the financial responsibility of a construction loan. As with all lending, shop around and compare apples to apples.

Inspections & Warranties

For new construction, home inspections must necessarily be delayed from the usual timeframe (7-10 days after accepted offer) where the home is not yet completed, and buyers should absolutely reserve their right to perform the usual comprehensive home inspection prior to closing. (If the home is already done, get in there with the home inspector). During the construction phase, builders don’t want buyers on the construction site, for obvious liability (and annoyance) reasons, so resist the urge to buy your own hard-hat and hang out with the construction guys. Metrowest area agent Heidi Zizza of mdm Realty retells a funny story about a Natick woman who literally broke a window trying to gain entry into her under-construction home.

Contrary to popular belief, Massachusetts law does not require a 1-year builder’s written warranty for new construction, however, most builders will provide one, albeit littered with exceptions to coverage. Fairly recent Massachusetts case law does impose a 3 year “implied warranty of habitability” for certain undiscovered construction defects. Again, selecting a reputable builder in the first place is “the ounce of prevention worth the pound of cure.”

Punch-Lists and Closing

There will inevitably be unfinished items right up to the closing. I’ve rarely seen a new construction transaction without a punch-list at closing. Some unfinished items will be serious enough to warrant an escrow holdback at closing (remember, I had said push back on this during P&S negotiations). Some lenders, however, will not allow a holdback, so the parties will have to negotiate and be creative at closing to ensure that all unfinished work is completed within a reasonable time after closing. If the home is part of a larger project/subdivision, this is usually not an issue. However, for “one-off” single site projects, getting the builder to come back and finish punch-list items after closing can be like pulling teeth. Again, having a real estate lawyer on your side and in control of the funds will give you leverage here.

Once papers are passed, the closing attorney will lastly ensure that there are no outstanding subcontractor liens on the property, which is one of most common hiccup at closings. For this reason and many others, it is imperative that buyers obtain their own owner’s title insurance policy, to ensure that title is clear, marketable and free of undiscovered defects and liens.

Buying new construction is often a long, drawn out, and stressful process for new buyers. Do your research. Be patient. And hire the best professionals on your side. Good luck!

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Richard D. Vetstein, Esq. is an experienced Massachusetts real estate attorney who often handles Massachusetts new construction home purchases. If you need assistance with a new construction purchase or sale, please contact him at 508-620-5352 or at rvetstein@vetsteinlawgroup.com.

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Breaking: Attorney General Strikes Down Wakefield Ban on Dispensary

Hazy Legal Landscape Providing Angst to Town Planners

Massachusetts voters overwhelmingly approved the Medical Marijuana Ballot Initiative/Question 3 (click for full text), opening the door to the opening of at least 35 medical marijuana dispensaries throughout the state in 2013. But, the bigger question is whether the same voters and town leaders will support the opening of dispensaries on their own street corners and downtown areas. Many towns and cities are already gearing up for a fight over the locations, as one marijuana law firm is already scheduling seminars on how to open up dispensaries in Framingham. In litigious Massachusetts, we can certainly expect aggrieved abutters to challenge the opening of what they call “pot shops” next to their residences and businesses. The actual opening of marijuana dispensaries could be years away due to litigation and opposition.

Up To 35 Marijuana Dispensaries in 2013

The ballot law authorizes the opening of up to 35 dispensaries in 2013, and the Department of Public Health retains authority to open more later if demand is there. The law requires that at least one dispensary must be located in each of Massachusetts’ 14 counties, but caps each county at no more than 5 locations. The law seeks an accelerated rollout of dispensaries. Treatment centers can file applications as early as January 1, 2013, and open up to 120 days later, subject to the rollout of regulations by the state Department of Public Health.

Possible Target Locations

Based on size, county seat, and demographics, likely locations for marijuana dispensaries in Eastern Massachusetts would include: ((This is my own opinion/analysis.))

  • Boston, Roxbury/Dorchester/Mattapan, South Boston (Suffolk County)
  • Cambridge, Lowell, Framingham, Marlborough, Waltham, Woburn (Middlesex County) ((The location of dispensaries in Middlesex county — Massachusetts’ most populous county — will be a huge battle.))
  • Lawrence, Salem, Peabody, Lynn (Essex County)
  • Dedham, Quincy, Brookline, Franklin (Norfolk County)
  • Brockton, Plymouth, Middleboro (Plymouth County)
  • Taunton, New Bedford (Bristol County)
  • Worcester (Worcester County)

A Smoky Legal Landscape

The ballot provision, however, is very murky as to how cities and towns are supposed to handle the potential influx of dispensaries. This is causing town leaders to scramble for legal guidance as to whether they should either attempt to block locations wholesale or enact special zoning districts regulating the placement of dispensaries.

As for any attempt to block the opening of marijuana centers, the question will have to be answered by the courts as the law is silent as to whether municipalities have this power. The legal issues surrounding municipal zoning and siting of medical marijuana dispensaries will likely follow similar cases involving methadone clinics, alcohol treatment centers/sober houses and even adult entertainment venues — all uses which are legal, yet subject to reasonable zoning governance. Additionally, treatment centers could seek protection from the American’s With Disabilities Act and other disability laws which protect cancer, HIV, glaucoma and other qualified patients who are entitled to receive medical marijuana.

I am of the opinion that a municipality cannot enact an ordinance or by-law which will block a marijuana dispensary from opening in town as long as the dispensary has complied with all DPH regulations. The town, however, can utilize its zoning powers to regulate where in town such a dispensary can be located, so long as the town does not enact illegal “spot zoning” in so doing.

While medical marijuana may have passed fairly easily on Election Day, it will probably be some time before Massachusetts sorts out all the legal issues as to where these dispensaries should go.

I am going to keep this post updated with news articles and posts about the new law and reaction to it, below.

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Richard D. Vetstein, Esq. is an experience Massachusetts zoning and real estate attorney. If you are concerned or have questions about the new Medical Marijuana Law, please contact him at info@vetsteinlawgroup.com.

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Concern Over 60 Day Supply Provision & Federal Ban On Pot

Burned up Massachusetts landlords are fuming with concern over the state’s newly passed but hazy medicinal marijuana law. The law — rolling out Jan. 1 — grants medical marijuana users the right to grow a two-month supply of weed at home if they cannot get to a marijuana dispensary because they are too sick or too broke. The new law also potentially opens landlords up to federal prosecution for violating the federal controlled substances laws.

Skip Schloming, executive director of the state’s Small Property Owners Association, expressed deep concern about the 60-day supply provision:

“You could have as many as 24 plants that are 6 feet tall,” Schloming told the Herald. “And that could cause all sorts of property damage, from water damage, to mold and humidity, to wiring issues that could cause a fire. … This has the potential to be a disaster.”

The SPOA called for a 6 month delay in implementing the law.

I hate to be a “buzz kill” for medical marijuana users, but I believe the landlords have a legitimate gripe. In the landlord-tenant context, landlords own the property and remain primarily responsible for what goes on in their apartment buildings. I’m no weed expert, but imagine a small studio apartment loaded with a veritable jungle of pot plants — a prospect which would frighten any residential landlord for a number of reasons.

First, a medical marijuana grower could be targeted for burglarization. If they are truly sick and broke enough to qualify as home growers, then they would be equally vulnerable to pot bandits stealing their stash.

Second, maintaining marijuana cultivation requires specialized equipment not necessarily compatible with close-knit apartment living. I did some research, and found this website dedicated to hydroponic growing equipment. Growing marijuana plants is fairly sophisticated. Growers need to monitor pH and moisture levels, carbon dioxide outputs and germination of seeds. Failure of this equipment could conceivably cause mold, mildew and other damage to interior units.

Bay State landlords are also concerned about running afoul of federal drug laws as marijuana remains a federally prohibited controlled substance. Landlords are begging Beacon Hill lawmakers to give them the right to refuse to rent to tenants who grow pot for medical use over fears their property could be seized. As reported in the Boston Herald, commercial and residential landlords are right to worry, drug forfeiture attorneys say, because landlords can be charged as conspirators if their tenants are targeted by the feds.

No matter landlords’ concerns, medical marijuana is here to stay in Massachusetts. It will be up to the state Department of Public Health — the same agency rocked by the highly publicized state crime lab fiasco — to enact sensible rules and regulations governing medical marijuana. Let’s hope that the DPH considers the practicalities and logistics for marijuana growing in tight-knit apartment buildings. Strict rules on home growing eligibility are a must. Same for the approval of safe, tested growing equipment. Immunizing landlords from liability for medical marijuana growing or use by tenants would be another good idea.

We will see how it all plays out on Beacon Hill…

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Richard D. Vetstein, Esq. is a Massachusetts real estate attorney who handles landlord-tenant matters and evictions throughout the state. He can be reached at info@vetsteinlawgroup.com.

 

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Impact on Pending Home Sales and Refinances

Meteorologists are now predicting that early next week Hurricane Sandy will either pass close by or make a direct impact on New England. This storm is potentially huge, rivaling last year’s Hurricane Irene and the Perfect Storm of 1991.

  • If you are closing on a property next week, you may want to consider pushing up the closing to before the hurricane makes landfall on early Tuesday. I realize that may not be possible at this point, but it’s worth a shot.
  • If you have not secured a homeowner’s insurance policy, you should probably wait until the storm passes as most carriers will not write new policies right now.
  • If you are closing on a purchase or refinance after the storm passes — and especially if the Federal Government declares a Federal Disaster Area –be prepared to have a re-inspection of the property before closing. A hurricane considered to be an Act of God and as a result the borrower will be required to pay for any re-inspection fee. These re-inspections range from $125 to $200. You will receive notice from your lender and re-disclosures prior to closing. This will also likely delay your closing
  • If there is substantial damage to a home you are purchasing, you’ll have to look to your purchase and sale agreement as to whether you have a right to pull out of the deal or proceed, provided you get the benefit of any insurance proceeds.

Hurricane Safety Precautions & Information

Important Links

Pre-Planning:

  • Plan an evacuation route to the nearest shelter or “safe” area and keep a map handy. During emergencies, shelter locations will announced on the radio.
  • Replenish emergency kits and supplies.
  • Get lots of batteries and flashlights!
  • Secure important documents from possible damage or move to a safe location.
  • Develop a list of important phone numbers.
  • Develop a plan to secure loose objects around the house; trim branches and trees.
  • Ensure that your pets have collars and identification tags.

Prior to the Hurricane:

Secure all loose objects outdoors.

  • Secure all windows using plywood.
  • Fill your vehicle with fuel.
  • Charge all batteries (i.e. phone, lamps, flashlights, radios, etc.)
  • Listen to the emergency broadcasts of the storm.
  • Be prepared to evacuate with emergency supplies to a predetermined location.

During the Hurricane:

Stay in doors and away from windows.  Keep to the center of the building on the ground level.

  • Listen to the emergency broadcast on the radio or television.
  • Turn off all electrical devices and appliances that are not needed.
  • Stay away from coastal waters, rivers, streams or other flooding areas.
  • Do not try to cross flooded areas with your vehicle.
  • Listen for instructions from emergency officials when the storm is over.

Emergency Supplies and Kits:

First aid kit and personal medications

  • Drinking water
  • Ice Chest
  • Lighter, matches and candles
  • Clothing, personal toiletries
  • Sleeping bags and blankets
  • Portable radio and flashlight
  • Extra batteries
  • Non-perishable foods
  • Manual can opener
  • Important documents
  • Quiet games, books, or toys for children

Local Insurance Claims Numbers

Acadia Insurance (800) 691-4966
AIG (Global Energy) (877) 743-7669
Chartis (formerly AIG) Private Client Group 888-760-9195
Andover Companies: Cambridge Mutual & Merrimack Mutual (800) 225-0770
Chubb Group (800) 252-4670
Commerce (800) 221-1605
Fireman’s Fund (888) 347-3428
Great American (888) 882-3835
Guard Insurance Group (888) 639-2567
Hanover Insurance (800) 628-0250
Hartford Insurance (800) 327-3636
Hingham Mutual (After hours claims) (800) 972-5399
Mass. Property Insurance Underwriting (800) 851-8978
Trident (After hours claims) (800) 288-2502
Tower (877) 365-8693
Quincy Mutual (800) 490-0047
Safety Insurance (800) 951-2100
Selective Insurance (866) 455-9969
Splash Program (Emergency Pollution related claims) (866) 577-5274
Splash Program (Emergency Non-Pollution related claims) (800) 746-3835
Travelers Personal lines:
(877) 425-2466
Commercial:
(800) 832-7839
Utica National (800) 216-1420
Vermont Mutual (After hours claims) (800) 445-2330
Zurich/Maryland (800) 565-6295

Good luck!!!!

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Insured Gets The Short End Of The Insurance Coverage Stick For Parking Lot & Building Flooding

The Massachusetts Supreme Judicial Court has not been too kind to insureds these days. For the second time in 2 months, the SJC has upheld the denial of a property owner’s claim in connection with flooding, this time in the commercial setting.  In Surabian Realty Co. v. NGM Insurance Co., the Court ruled that a commercial property owner’s claim for flooding caused by a blocked parking lot catch basin was not covered under an “all risk” commercial/business insurance policy.

Blocked Drain

Surabian Realty owned an office building in Foxborough. During heavy rains in 2009, rainwater stopped flowing down the parking lot drain. The drain had become clogged with debris. Rainwater then ponded in the lot and seeped under the door of the building, flooding its lower level. The flooding caused damage to the carpeting, baseboards, and walls, totaling approximately $34,000.

Surabian made a claim under its “all risk” commercial insurance policy which had a special indorsement for this type of situation, which provided, “The most we will pay for loss or damage caused by water that backs up or overflows from a sewer, drain or sump is $25,000 for any one occurrence.” The insurance company, however, denied  the claim on the grounds that the flooding was still excluded from coverage as it was caused by “surface water.”

Court Rules For Insurance Company (Again)

The SJC took an electron microscope to the policy language, parsing the language almost to a fault and unfairly (in my opinion) against the insured. The Court held:

“Construing these clauses in combination, we interpret the insurance contract, as amended by the indorsement, to exclude damage caused by flood waters that spread over the surface of the ground without having entered a drain, but to cover damage caused by water that backed up after entering a drain.”

So basically, the court said that the rainwater has to actually enter the drain, then backup, while a blocked drain that doesn’t allow water to fall down the pipe won’t be covered. Um, ok…. A better rationale would have been that the claim wasn’t covered because maintaining and keeping the drain free of debris was really the responsibility of the insured property owner, not a risk that the insurance company assumed. But I’m not the judge.

This is also the second instance in the last few months where the Court has relied upon the policy’s “anti-concurrent” clause which excluded coverage where  the damage results from the combination of a covered peril and an excluded peril.

Lessons For Property Owners

Aside from making sure catch basins are cleaned, the tough lesson for property owners here is that your supposed “all risk” insurance policy isn’t really “all risk” as you probably perceive it. It seems that these days a lot of insurance claims are denied or insureds are scared of even making a claim lest they get cancelled by the insurance company. It’s a tough predicament.

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Richard D. Vetstein, Esq. is an experienced Massachusetts real estate and commercial insurance coverage attorney. For more information, please contact him at 508-620-5352 or info@vetsteinlawgroup.com.

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69 Year Old Woman Found Dead After Neighbor’s Handyman Cuts 30-foot Arborvitaes; Estate Recovers $150,000 Wrongful Death Settlement

In a tragic case out of Somerset, Massachusetts reported by Massachusetts Lawyers Weekly, a woman’s estate has recovered a $150,000 wrongful death settlement after she dropped dead when her neighbor cut down a row of trees which she and her husband planted 40 years ago.

According to Taunton lawyer Claudine A. Cloutier, who represented the woman’s estate, the neighbor hired a worker to remove some of the trees. When the woman discovered they had been cut down, she apparently became emotionally distraught. Her son found her dead in a chair the next day. There were no signs of trauma. Her estate brought negligence and tort claims against the neighbor, alleging wrongful death partially caused by stress arising from the destruction of the plants. The case went to mediation, and was settled before trial for $150,000.

Massachusetts Illegal Tree Cutting Law

Disputes over tree pruning and cutting are very common in Massachusetts. Indeed, Massachusetts has one of the oldest tree cutting and trimming laws on the books which provides for triple damages for any illegal cutting:

A person who without license willfully cuts down, carries away, girdles or otherwise destroys trees, timber, wood or underwood on the land of another shall be liable to the owner in tort for three times the amount of the damages assessed therefor; but if it is found that the defendant had good reason to believe that the land on which the trespass was committed was his own or that he was otherwise lawfully authorized to do the acts complained of, he shall be liable for single damages only.

Nevertheless, at common law, a neighbor may remove branches extending over a shared property line onto his or her own property. Also, the neighbor has no liability for roots growing into your yard and causing damage. Massachusetts law does not allow a person to cross or enter a neighbor’s property for these purposes without the neighbor’s consent, nor to remove any branches or other vegetation within the confines of the neighbor’s property. You can trim the branches and roots back, but you cannot kill the tree. This is the “Massachusetts Rule.”

Damages are assessed that either the market value of the timber or the replacement cost of the trees. Replacement cost typically requires the assistance of an expert arborist or landscaper. In a case out of Martha’s Vineyard, the appeals court upheld a $30,000 award for the replacement cost of 10 mature oak trees. Upon a finding of maliciousness under the tree cutting law, those damages were tripled.

Before cutting, trimming or pruning trees on or near your property line, it’s always a good idea to consult your plot plan or survey and speak to your neighbor before taking out the chain saws.

Utility Tree Cutting

I’ve been reading about many recent disputes between property owners and utility companies (Wayland v. NStar) over tree cutting within utility easements. The law provides a public utility the right to remove or trim your tree if it interferes with the necessary and reasonable operation of the utility. Furthermore, the utility is required to perform tree trimming as part of its program to maintain reliable service for its customers. The National Electric Safety Code requires utilities to trim or remove trees growing near power lines that threaten to disrupt service. Proper and regular tree trimming helps prevent the danger and inconvenience of outages.

More ResourcesMassachusetts Law Library

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Richard D. Vetstein, Esq. is an experience real estate attorney who has litigated numerous illegal tree cutting cases. If you are dealing with a Massachusetts unlawful tree cutting or trimming situation, please contact him at 508-620-5352 or via email at info@vetsteinlawgroup.com.

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Real Estate Crash Has Resulted In Many More Forms and Disclosures

These days buyers are leaving closing rooms with not only their keys but a mild case of carpal tunnel syndrome! The reason for sore forearms and wrists is the voluminous stack of closing documents which are now required to be signed and notarized at every Massachusetts real estate purchase or refinance closing.

One of my opening “break the ice” lines at closings is to suggest that the buyers start massaging their writing hands. Then I show them the 2 inch stack of documents they must review and sign, and they usually say, “Are you serious? We have to sign all that?” Yep, I reply. You can thank Fannie Mae and the real estate collapse for that! All the new rules and regulations passed in the last 5 years have resulted in, you guessed it, more forms. Do you think the Feds and state ever eliminate old or out-dated forms? Nope.

Let me quickly go over some of the more important — and less important — documents signed at a typical Massachusetts real estate closing.

The Closing Documents

  • HUD-1 Settlement Statement. This is arguably the most important form signed at closing. It breaks down all the closing costs, lender fees, taxes, insurance, escrows and more. We did a full post on the HUD-1 and all the closing costs you can expect to pay here. Under the newer RESPA rules, most closing costs must be within 10% tolerance of the Good Faith Estimate provided by the lender (which you will also re-sign at closing).
  • Promissory Note & Mortgage. These two documents form what I like to call the “mortgage contract.” The promissory note is the lending contract between borrower and lender and sets the interest rate and payment terms of the loan. It is not recorded at the registry of deeds. The Mortgage or Security Instrument is a long (20+ page) document and provides the legal collateral (your house) securing the loan from the lender. The Mortgage gets recorded in the county registry of deeds and is available to public view. Read a full explanation of the Note and Mortgage in this post.
  • Truth in Lending Disclosure (TIL). The Truth in Lending should really be called “Confusion In Lending,” as the federal government has come up with a confusing way to “explain” how your interest rate works. This is a complex form and we’ve written about it extensively in this post. Your closing lawyer will fully explain the TIL form to you at closing.
  • Loan Underwriting Documents. With increased audit risk on loan files, lenders today are requiring that borrowers sign “fresh” copies of almost all the documents they signed when they originally applied for the loan. This includes the loan application, IRS forms W-9 and 4506’s.
  • Fraud Prevention Documents. Again, with the massive mortgage fraud of the last decade, lenders are requiring many more forms to prevent fraud, forgeries, and straw-buyers. The closing attorney will also make a copy of borrowers’ driver’s licenses and other photo i.d. and submit the borrower’s names through the Patriot Act database. They include Occupancy Affidavit (confirming that borrowers will not rent out the mortgaged property), and the Signature Affidavit (confirming buyers are who they say they are or previously used a maiden name or nickname).
  • Escrow Documents. Unless lenders waive the requirement, borrowers must fund an escrow account at closing representing several months of real estate taxes and homeowner’s insurance. This provides a cushion in case borrowers default and the taxes and insurance are not paid.
  • Title Documents. For purchase transactions, Massachusetts requires that the closing attorney certify that a 50 year title examination has been performed. Buyers will counter-sign this certification of title, as well as several title insurance affidavits and documents which the seller is required to sign, to ensure that all known title problems have been disclosed and discovered. Of course, we always recommend that buyers obtain their own owner’s title insurance which will provide coverage for unknown title defects such as forgeries, boundary line issues, missing mortgage discharges, etc.
  • Property Safety Disclosures. In Massachusetts, buyers and sellers will sign a smoke/carbon monoxide detector compliance agreement, lead paint disclosure, and UFFI (urea formaldehyde foam insulation) agreement. These ensure that the property has received proper certifications and will absolve the lender from liability for these safety issues.
  • Servicing, EOCA and Affiliated Business Disclosures. Chances are that your lender will assign the servicing rights to your mortgage to a larger servicer, like JP Morgan Chase or CitiMortgage. You will sign forms acknowledging this. You will be notified of the new mortgage holder usually within 30-60 days after closing. In the meantime, the closing attorney will give you a “first payment letter” instructing you where to send your first payment if you don’t hear from the new servicer. You will also sign forms under the federal and state discrimination in lenders laws and forms disclosing who the lender uses for closing services.

Well, those are most of the documents that buyers will sign at the closing. Sellers have a slew of their own documents to be signed at closing, and I’ll cover that in a future post. As I said, at your closing, massage your signature hand, grab a comfy pen, and sign your life away!

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Richard D. Vetstein, Esq. is an experienced Massachusetts real estate attorney. He can be reached by email at info@vetsteinlawgroup.com or 508-620-5352.

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The old Robert Frost poem Mending Wall goes “Good fences make good neighbors.” But a neighbor can quickly turn from good to bad when a they maliciously construct a “spite fence” on the property line. And that includes Sarah Palin who installed this 14 feet monstrous fence at her Wasilla, Alaska home.

What Is An Illegal Spite Fence?

Spite fences are those which neighbors put up extremely close to the other neighbor’s property for the purpose of annoying or inconveniencing the neighbor, and not for any legitimate other reason. In certain circumstances in Massachusetts, courts can rule that certain types of fences are illegal “spite fences,” and order that they be taken down, decreased in height or award damages to the complaining neighbor.

Under the Massachusetts Spite Fence Law (Gen. Laws ch. 49, § 21) ((Interestingly, Massachusetts was one of the first states to enact a spite fence law in 1887)) a fence is an illegal “spite fence” if:

A fence or other structure in the nature of a fence which unnecessarily exceeds six feet in height and is maliciously erected or maintained for the purpose of annoying the owners or occupants of adjoining property….

Whether a fence is an illegal spite fence depends on the circumstances. Usually spite fences are erected where neighbors have been fighting or in a legal dispute of some kind, and the fence is installed as a form of revenge or pay-back. In the vast majority of towns and cities, fences are allowed to be up to 6 feet tall. If the fence in question is over 6 feet tall, and there is evidence that it was installed maliciously, it may be an illegal spite fence.

In a recent dispute on Concord Street in Wilmington (see photo right), a neighbor has installed a very ugly make-shift plywood spite fence with a blue tarp attached. This precipitated a proposal to pass a new fence by-law in Wilmington. I’m not sure of the circumstances surrounding this particular fence, but it is certainly borders on a classic spite fence. In another reported case, the Land Court ordered a neighbor to take down a makeshift fence with spray painted signs and no trespass warnings.

Most folks who erect spite fences will claim the fence is for privacy, but if the home faces an entirely different direction, you can debunk that as a cover for maliciousness. Neighbors may also try to get around the Spite Fence Law by installing a row of trees over 6 feet tall behind the fence. These, too, may be considered illegal.

What Can I Do If My Neighbor Puts Up A Spite Fence?

Under the Spite Fence Law cited above, you can sue your neighbor and ask the court to take down the fence and also seek damages. Under this law and upon a showing of “irreparable harm” the court has the power to impose an injunction ordering that the fence be taken down or reduced to 6 feet tall. Alternatively, the court can award damages.

The difficulty with these cases is that you need to prove you neighbor acted “maliciously” in installing the fence. You will need to marshal evidence to prove that, and that’s where an experienced Massachusetts real estate litigation attorney would add tremendous value. These cases are complex and judges will often require evidentiary hearings before imposing an order taking down a fence. It’s not a “do it yourself” type of situation!

If you are struggling with a boundary line issue or a potential “spite fence,” don’t hesitate to contact me at info@vetsteinlawgroup.com. I have successfully litigated quite a lot of these cases.

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Richard D. Vetstein, Esq. is an experienced Massachusetts real estate litigation attorney. Mr. Vetstein frequently represents Massachusetts residents in contentious boundary line, fence, and adverse possession cases.

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Dry Rot Example

Water Damage Originating From Exterior Of Home = Claim Denied

In one of the more important homeowner’s insurance cases decided in recent memory, the Massachusetts Supreme Judicial Court (SJC) considered what is covered under a standard Massachusetts homeowner’s insurance policy when rain, snow melt and runoff create water damage and dry rot to the inside of a home. The case is Boazova v. Safety Insurance Co., SJC-10908 (May 29, 2012).

The Court ruled there was no coverage under the homeowner’s insurance policy where significant hidden water seepage through foundation cracks caused a kitchen floor to turn into a “spongy and mushy” mess. Under the exclusion for damage caused by “surface water,” the court held, there is no coverage for loss covered by rain, flood waters or runoff originating from outside the home, rather than inside the home, like a burst pipe. This interpretation of the Mass. standard homeowner’s policy is not what most insured expect from their insurance coverage, but unfortunately it puts to rest what most homeowners who have suffered a water damage claim know already:  a water damage claim will likely be denied if the source of water is from the natural accumulation of rain, snow melt or ice seeping into the ground, through a roof, or through the foundation.

Severe Wood Rot Discovered

While undertaking a kitchen renovation project, Ms. Boazova, an Arlington homeowner, discovered severe deterioration of the wooden sill plate that rested on top of the concrete foundation at the base of the home’s rear wall, as well as of the adjoining floor joists and wall studs. The kitchen floor and sub-floor was moist, spongy and falling apart. The homeowner’s expert engineer opined that because the concrete patio was poured directly against the house, water and moisture migrated down from the sill plate, below grade to the foundation, causing the water damage. There was no dispute that the origin of the water infiltration and seepage was from outside elements such as rain, sleet and snow melt. The insurance company denied coverage based on the policy’s exclusion for damage caused by “surface water,” and the homeowner sued.

No Coverage For Damage Caused By “Surface Water”

This case is the first in recent memory where the SJC has considered the interplay between the new Limited Fungi, Wet or Dry Rot, or Bacteria Coverage indorsement, the “hidden seepage” provision and the “anti-concurrent cause” exclusion for “surface water damage” in the standard Massachusetts homeowner’s insurance policy. Making sense of the Massachusetts standard homeowner’s policy coverages and exclusions is a bit like reading Egyptian hieroglyphics. Even the SJC justices had some difficulty, albeit they ultimately sided with the insurance company:

“Although the language of the policy and the indorsement is challenging to even the most careful reader because of the way it connects various coverages, exclusions and exceptions, we conclude that Boazova’s claimed loss — the deterioration and rotting of the wooden sill plat, adjoining floor joists, and wall studs — is excluded from coverage by unambiguous provisions in the policy.”

Take-Away: Exterior Surface Water Cause = Claim Denied

The key point is the Court’s conclusion that the surface water exclusion carried the day. Describing “surface water” as “waters from rain, melting snow, springs or seepage, or floods that lie or flow on the surface of the earth and naturally spread over the ground but to not form a part of a natural watercourse or lake,” the judges ruled that there was no coverage because the property damage was a direct result of rain and snow melt migrating down the foundation into the bellow grade kitchen floor. This covers just about every conceivable flooding scenario.

As far as what homeowner’s can take-away from this decision, well unfortunately they should keep an emergency capital reserve fund ready because any claims made for water damage arising out of exterior conditions will likely be denied. The only type of “flooding” claims which will be covered would be burst pipes and possibly overrun interior sump pumps or perimeter drain systems which cause flooding — and even those will likely involve a battle with the insurance company.

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Richard D. Vetstein, Esq. is an experienced Massachusetts real estate and homeowner’s insurance coverage attorney. For more information, please contact him at 508-620-5352 or info@vetsteinlawgroup.com.

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When you are considering purchasing a home in Massachusetts, the property may have the benefit or burden of an easement. Most easements and restrictions are quite “harmless” and standard, however, some can have a major impact on future expansion possibilities and the right to use portions of the property. In this post, I’m going to go through the most common types of easements and how they can affect property.

What Is An Easement?

In plain English, an easement is a right that another person or company has to use your property. They don’t own your property, but the easement gives them the legal right to use your property as specified in the easement instrument. The property that enjoys the benefit of the easement is sometimes referred to as the “dominant estate,” and the property over, under, or through which the easement runs is sometimes referred to as the “servient estate.” Easements are usually recorded in the registry of deeds, but sometimes they can arise from “implication” or “by necessity.” I’ll explain those later.

Utility Easements

The most common types of easements in Massachusetts are utility easements for such things as overhead and underground power lines, cable lines, gas lines, and water mains. These easements allow the utility companies to use portions of residential property to provide their respective utility services. Sometimes, the easements will show up on a plot plan or survey, and some will be found recorded in the title, usually when the lot was first laid out. The majority of these easements do not materially affect the use and expansion of your property, however, the one type of easement to take note of are high pressure gas line easements.  For obvious safety reasons, these easements usually carry with them strict restrictions on what can be built on or near them.

Driveway or Access Easements

Another common type of easements that are found in Massachusetts are access easements for driveways and the like. Properties with shared driveways will often have easements enabling such sharing– or they should! These easements should also provide for common maintenance and upkeep responsibilities and expense. Other types of access easements include walking and bike paths and beach access – very common down the Cape and on the Islands.

Drainage Easements

Another common type of easements are drainage easements which are typical for newer subdivisions. Drainage easements allow for one lot to drain its storm water onto another or into a detention pond.

Prescriptive Easements

If you have heard of adverse possession, then you know what a prescriptive easement is all about. An easement by prescription is an easement acquired through adverse possession – which is the hostile adverse use of someone else’s property for 20 or more continuous years. Prescriptive easements arise where people have acted as though an easement has existed but there is no instrument of easement recorded at the registry of deeds. For example, a prescriptive easement can arise if a neighbor’s family has used a walking path on the neighbor’s property for over 20 years. twenty years. I’ve written extensively on adverse possession in this post.

Easements by Implication and by Necessity

An easement by implication is found in the law when there is no recorded easement, but where the circumstances show an easement was intended to exist. It usually exists where there is common ownership of a lot, the seller conveys a portion of the land under current ownership, and both parties intended to create an easement at the time of conveyance. If someone claims an easement by implication which negatively affects one’s property, the owner’s title insurance policy, if any, will typically cover that situation. Easements by necessity occur when a property is sold in a land-locked configuration without any legal access. An easement is therefore created “by necessity” to prevent the land-locking. An adverse easement by necessity would also be covered by an owner’s title insurance policy.

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Richard D. Vetstein, Esq. is an experienced Massachusetts real estate attorney. They can be reached by email at info@vetsteinlawgroup.com or 508-620-5352.

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Renter’s Insurance Policy Raises Questions

I’ve recently become aware that some Massachusetts landlords are requiring that tenants procure their own policy of renter’s insurance as a condition of leasing. In fact, MSN Real Estate did a nice write up about the practice here. But I am also hearing about a dark side to this practice where some landlords have a kickback arrangement with the insurance provider where the landlord receives compensation for any policy taken out by a tenant.

Renter’s insurance is almost always a good idea, but under Massachusetts law, can a landlord require that a tenant get a policy (if the tenant doesn’t want one) and must it disclose a referral relationship with the insurance provider?

Landlords Should Be Careful About Renter’s Insurance Requirement

In light of recent court decisions, landlords should re-examine the legality of a mandatory renter’s insurance policy requirement.  In the recent Hermida v. Archstone class action ruling, which considered amenity fees under the Massachusetts security deposit statute, the court held that landlords can only charge first and last month’s rent, a security deposit, and a lost key fee at the beginning of a tenancy, and no other types of fees. Any other type of fee or financial obligation required to be paid by the tenant at the beginning of the lease could be deemed illegal under the Mass. Security Deposit law, Mass. Gen. Laws ch. 186, sec. 15B. Accordingly, landlord must be very careful about what and how much they charge tenants at the inception of leases, over and above the standard rent deposits and new key fee. At the very least, renter’s insurance should be optional, and any affiliate or kickback arrangement should be fully disclosed to the tenant. This still may not prevent a landlord from getting sued over a mandatory renter’s insurance requirement.

Renter’s Insurance Still Smart Choice

That said, I always recommend that tenants get their own renter’s insurance policy. It’s fairly inexpensive and provides protection to your personal belongings. Massachusetts law does provide for a minimum of $750 per unit for tenant relocation assistance due to fire displacement. However, that is not nearly enough for the average renter.

Has your landlord required that you purchase renter’s insurance? Have they disclosed any referral relationship? I’d like to hear from you. The practice may well be illegal.

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Richard D. Vetstein, Esq. is an experienced Massachusetts Real Estate Landlord Attorney. For further information you can contact him at info@vetsteinlawgroup.com.

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Another Expansion Of Massachusetts Landlord Liability

In yet another case demonstrating Massachusetts’ inhospitable legal environment towards residential landlords, Northeast Housing Court Judge David Kerman has ruled that an owner of a mixed used residential – commercial building is “strictly liable” for a drunk tenant’s fall through a defective porch guardrail. The 17-page ruling is Sheehan v. Weaver, and is embedded below. The imposition of strict liability, sometimes called absolute or no-fault liability, makes landlords 100% liable for the injuries of tenants where there is a building code violation, regardless of whether the tenant was equally at fault for the accident. This is a troubling ruling and another reason supporting the notion that Massachusetts is landlord unfriendly!

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. One of Weaver’s residential tenants, William Sheehan, fell through a porch guardrail, several stories onto the asphalt pavement below, suffering serious injuries. There was evidence that Sheehan was intoxicated, however, 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 plaintiff’s own negligence. The jury also found the landlord strictly liable, assessing $242,000 in damages.

Building Code Violation At Issue

The Massachusetts State Building Code provides for strict (100%) liability for any personal injuries caused by any building code violation at any “place of assembly, theatre, special hall, public hall, factory, workshop, manufacturing establishment or building.” The landlord argued that the primarily residential structure was not sufficiently commercial to be considered a “building” within the meaning of the Building Code’s strict liability provision. But Judge David D. Kerman disagreed:

“[T]he structure in this case may well be at the outer margin of the class of structures that fall within the ambit of the term ‘building’ in the strict liability law,” wrote Kerman. “However, it is my opinion that the mixed residential-commercial four-unit non-owner-occupied structure in this case is ‘commercial’ and ‘public’ enough to fit within the term ‘building’ in section 51.”

The imposition of strict liability resulted in the landlord being hit with the full amount of the $242,000 judgment with no reduction for the tenant’s comparative negligence due to his intoxication. Ouch.

Commentary: Bad Decision

As I stated to Massachusetts Lawyers Weekly, this is a troubling ruling. The Building Code provision, passed in the late 1800’s, was clearly intended to cover structures with a distinctively commercial nature, i.e., “public hall, factory, workshop, manufacturing establishing or building.” The law was not intended to cover a predominantly residential apartment building with commercial/retail on the ground floor, in my opinion.

This ruling will now expand liability for residential developers who have built quite a number of mixed-use residential projects in the last few years. This decision can be read as providing strict liability for anyone injured due to any type of building code violation, however minor. Property managers and commercial insurers should be aware of this ruling, and ensure that there are no building code issues which could cause harm to tenants.

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.

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Richard D. Vetstein, Esq. is an experienced Massachusetts real estate attorney. For more information, please contact him at 508-620-5352 or info@vetsteinlawgroup.com.

Sheehan v. Weaver

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Under a new Massachusetts oil heating law which went into effect on September 30, 2011, every homeowner with an oil heating system is required to install an oil safety valve or an oil supply line with protective sleeve in their system. The cost is approximately $150 to $350 depending on the system. The required upgrade is to prevent leaks from tanks and pipes that connect to your furnace. The upgrade will reduce the risk of an oil leak so by making a relatively small expenditure now, you can prevent a much greater expense in the future.

Who Must Upgrade?

Owners of 1- to 4-unit residences that are heated with oil must already have or install an oil safety valve or an oil supply line with a protective sleeve. Installation of these devices must be performed by a licensed oil burner technician. Technicians are employed by companies that deliver home heating oil or are self-employed. It is important to note that heating oil systems installed on or after January 1, 1990 most likely are already in compliance because state fire codes implemented these requirements on new installations at that time.

Who Is Exempt?

Homeowners are exempt from taking these leak prevention steps if:

  • the oil burner is located above the oil storage tank and the entire oil supply line is connected to and above the top of the tank OR
  • an oil safety valve or oil supply line with protective sleeve was installed on or after January 1, 1990, AND
  • those changes are in compliance with the oil burning equipment regulations; a copy of the oil burner permit from the local fire department may be used to demonstrate compliance.

Why Comply?

Not only is complying with the new law required, it makes good financial and environmental sense. Homeowners who take these preventive measures can avoid the disruption and expense that can be caused by heating oil leaks. A leak may result in exposure to petroleum vapors in your home. If the leak reaches the soil or groundwater beneath your house, then a cleanup must be performed to restore your property to state environmental standards. Such a leak can cost many thousands to clean up. Leaks that affect another property or impact drinking water supply wells can complicate the cleanup and increase the expense. Each year, several hundred Massachusetts families experience some kind of leak.

What will an upgrade cost?

The typical cost of installing either an oil safety valve or oil supply line with a protective sleeve ranges from $150 – $350 (including labor, parts, and local permit fees).

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Richard D. Vetstein, Esq. is an experienced Massachusetts real estate attorney. Please contact him if you need assistance with a home purchase or sale.

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The home inspection is one of the most critical aspects of every Massachusetts real estate transaction. Virtually every buyer in a standard purchase transaction (meaning not a short sale, foreclosure, or bank-owned property) will opt to perform a home inspection, and for good reason. You need to know whether there are any serious structural, mechanical or other defective conditions in the home before you close.

As always, I’m going to focus on the legal aspects of the home inspection as it impacts the overall transaction.

Buyer Beware

Let’s start out with the legal framework for what, if anything, a seller and his real estate agent are required to disclose to a prospective buyer. Surprisingly to most buyers, a private seller has no legal duty in Massachusetts to disclose any type of information, good or bad, about the property (except for the presence of lead paint). This is called caveat emptor, or buyer beware. Real estate agents stand on a heightened legal footing. Under Massachusetts consumer protection regulations governing real estate brokers, a broker must disclose to a buyer “any fact, the disclosure of which may have influenced the buyer or prospective buyer not to enter into the transaction.”

Nevertheless, I always advise buyers not to rely or trust anything the seller or his/her agent says about the property. This is exactly the reason why most buyers will choose to get an independent home inspection.

Inspection Contingencies

The standard form Offer to Purchase (click for form) will include several inspection related contingencies: the general home inspection contingency, radon, lead paint, and pest contingencies. The buyer typically has between 5 and 10 days to complete these inspections. If the inspections reveals any problems requiring repair or remediation, the parties will negotiate repairs during this inspection period, and the agreement will be reflected in the standard purchase and sale agreement or sometimes a separate repair agreement which is signed around 14 days after the accepted offer. Typically, the Realtors do the heavy lifting on home inspection negotiations, and by the time it gets to the attorneys, there is an agreement in place.

The attorneys can craft the language for repairs. I always insist that repairs are performed by licensed contractors with evidence of completion provided prior to or at closing. Also, buyers should know that repairs provided in the purchase and sale agreement may trigger a second property inspection by the lender’s underwriters which could add another layer of oversight into the deal.

If the problems are so serious that the buyer wants to walk away from the deal, there is a mechanism for where the buyer provides notice to the seller and a copy of the inspection report. It’s very important to provide proper notice in order to get the buyer’s deposit returned. An attorney should be consulted for this situation.

Home Inspector License Requirements

Since 1999, Massachusetts has required that home inspectors be licensed by the state Board of Registration of Home Inspectors. You can search for home inspector licenses here: Massachusetts Home Inspector License Search.

Buyers should recognize the limits of the home inspection. The state regulations requires inspection of “readily accessible” components of a dwelling. Most modestly priced inspections are visual inspections of the property. The inspector is trained to identify defects in the systems of a house but cannot be expected to have x-ray vision. Moreover, property inspectors are not generally trained civil engineers. Structural defects and weaknesses may not be readily apparent, and may require follow up by a licensed structural engineer. In many cases, however, evidence of inappropriate settling or structural failure can be observed during a visual inspection. An experienced inspector will summarize the “big picture,” but inspectors are not required to identify the exact nature and extent of structural deficiencies. Regulations specifying the elements of a dwelling to be observed and reported on by the home inspector may be found here at 266 C.M.R. § 6.00.

Condominiums

When you buy a condo, you not only buy the unit, but the common areas such as the common roof, mechanical and HVAC systems, grounds, etc. Good home inspectors will ensure that the inspection of a condominium includes the common areas as well as the unit itself. The common area inspection may reveal deferred maintenance needs and inadequately performed repairs that may result in increased condominium fees and special assessments.

Radon

The Environmental Protection Agency (EPA) has established an “action level” of 4.0 pico-curies per liter (4.0 pCi/l) of radon present in indoor air. Although not established as an unsafe level, this figure has been established as the point at which protective measures are recommended. Prospective purchasers and home inspectors frequently use commercially available canisters to collect radon data. This method is cost-effective but may not give accurate results. The canisters are ordinarily placed for twenty-four to forty-eight hours in the basement and on the first floor of the dwelling. The canisters must be placed away from drafts and should not be disturbed. After the test period, the canisters are sealed and forwarded to a testing laboratory. Sometimes, the radon results are not ready by the time the purchase and sale agreement has to be signed. In this situation, the parties can either agree to extend the deadline or agree to a radon contingency.

If the radon results come back over 4.0 pCi/l, depending on the language of the radon contingency, the buyer can typically opt out of the deal altogether or require the seller to install a radon remediation system. Often the sellers will attempt to cap the cost of the system.

Pests

Most home inspectors are also qualified to perform inspections for wood-boring insects, such as termites, powder post beetles, and carpenter ants. All properties should be inspected for such pests. Properties financed by certain government-sponsored loan programs, such as the Federal Housing Authority, require a pest inspection as a condition of obtaining a loan. It’s a good idea to ask the sellers if they have an existing pest control contract that can be transferred to the new buyers.

Lead Paint

The Massachusetts Lead Law requires the buyer to be given the opportunity to inspect for lead paint. The seller or broker is required to provide potential purchasers of homes built before 1978 with the notification package prepared by the Massachusetts Department of Public Health.

Sellers and real estate agents are required by law to disclose any information about known lead paint hazards in their properties, and to provide copies of any documentation relating to the lead paint status of the properties (i.e., a lead inspection report or risk assessment report). The seller must grant a ten-day contingency period from the date the buyer receives the property transfer notification to conduct a lead paint inspection. If the buyer discovers lead paint in the dwelling during the inspection period, the contingency required by the statute permits the buyer to withdraw from the agreement without further obligation.

Although a seller is under no obligation to actually abate the lead paint, a lead-free house may be more valuable and marketable. This is particularly true for multi-family properties where tenants with children under six years of age may trigger the abatement requirements of the law. Sellers are required to provide any documentation they have of the estimated costs to abate the lead paint. Should a seller refuse to make a price concession based on the presence of a lead paint hazard, a buyer could argue that any subsequent buyer also should be made aware of the hazards and related costs. As a result, the availability of a lead paint inspection and cost estimate can become a powerful negotiating tool for the buyer.

Lead paint testing is typically not done as part of a standard home inspection, and must be separately arranged by a certified lead paint assessor.

Mold and Mildew

Mold and mildew are tricky subjects for home inspectors. The presence of excessive amounts of mold spores has been linked to asthma and other respiratory ailments and is claimed to cause permanent injuries. Mold grows in warm, moist environments and can be present behind walls and ceilings, in heating and cooling ducts, and in other difficult-to-inspect parts of a house or condominium building. As noted, although a building inspector cannot peer behind walls, a thorough inspection can detect water penetration, which is the precursor and necessary condition for a mold problem. Where mold is suspected, a buyer can always request that his home inspector be allowed to drill small exploratory holes to test for the presence of mold/mildew.

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Richard D. Vetstein, Esq. is an experienced Massachusetts real estate attorney. Please contact him if you need assistance with a home purchase or sale.

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Judge Rules That Occupy Movement Protesters Are Common Trespassers

Today, Massachusetts Superior Court Justice Frances A. McIntyre issued a ruling clearing the way for the eviction of the Occupy Boston protest which has taken over Dewey Square in downtown Boston. Judge McIntyre had originally granted the protesters a temporary restraining order sustaining the protests, but after reviewing evidence and hearing legal argument, she has changed her mind.

For interest to our real estate readers, the Judge balanced the City’s property rights vs. the protesters First Amendment speech rights. The judge ultimately concluded that the “occupation” as practiced by the Occupy Boston protesters — physically taking over the public park from the City and to the exclusion of others — was a classic trespass and not a First Amendment right.

“To the extent that the act of occupation, as defined, communicates, it speaks of boldness, outrage, and a willingness to take personal risk. But the plaintiffs’ occupation of Dewey Square to the effective exclusion of others is the very antithesis of their message that a more just and egalitarian society is possible. It does not send the message the plaintiffs profess to intend.” — Judge Francis McIntyre

Analysis: Sound Decision But Quite Expansive

This is a solid, well-reasoned judicial opinion that may be difficult to overcome on appeal. However, the judge’s reasoning on “occupation” is new and perhaps ground-breaking, so it could be susceptible to a different opinion on appeal. This case will surely make its way up to the Supreme Judicial Court, and we’ll blog about it here of course.

As the judge found, the First Amendment is not absolute. Yes, the protesters have a right to assembly, but that right must be peaceful and not permanent as to constitute a seizure of public land or present a grave public safety risk. The First Amendment, by its own language, protects speech, not physical occupation of public land. That’s called eminent domain.

Furthermore, the possibility of real public safety tragedy is virtually guaranteed at some point the longer this encampment is allowed to fester with its flammable tarps, fire sources, auto batteries, extension cords and no sanitary facilities on site. Most of the protesters were not born for the terrible Cocoanut Grove Fire in 1942. A fire would quickly swallow up the tent camp and kill dozens. Health, sanitary and fire codes were not intended to abridge the protester’s speech rights.

The judge went much further than she had to though, and this is where her reasoning could be challenged on appeal:

 “Little in the way of expression is outlawed under the United States Constitution, but an act which incites a lawful forceful response is unlikely to pass as expressive speech.”

One need only turn to the Civil Rights Marches in Alabama in 1963 to see the flaw with this argument. The protesters in Alabama, simply by marching, incited a forceful response by the Alabama police and their water guns. Using Judge McIntyre’s reasoning, therefore, the Civil Rights Marches are not protected by the First Amendment simply because they elicited a police response. This is illogical as many expressive marches in turbulent times have resulted in police reaction. It doesn’t make the marches or speech any less entitled to constitutional protection.

I’ve posted the ruling below. What are your thoughts on the legal issues?

Occupy Boston Decision

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Tree Damage At My House, Sudbury MA

It was only 3 months ago I was blogging about fallen trees and downed power lines in the wake of Hurricane Irene. Well, here we go again with the Halloween N’or Easter Storm 2011 with the same questions and answers. As you can see to my right, I woke up to a huge limb across my front lawn, which luckily didn’t snap my lines or hit my house! For those less unfortunate, I will outline the law again.

Who Is Responsible If My Neighbor’s Tree Falls On My Property?

The short answer is that, legally speaking, your neighbor is not liable for a healthy tree falling down during a major storm event. That is considered an “Act of God” for which no one is legally liable (except God of course, but I think he enjoys some type of legal immunity–I’m not sure, I’ll have to research that one). So, you will have to make a claim under your homeowner’s insurance policy for the damage caused by the neighbor’s tree.

As the court stated in the 1983 case of Ponte v. DaSilva:

The failure of a landowner to prevent the blowing or dropping of leaves, branches, and sap from a healthy tree onto a neighbor’s property is not unreasonable and cannot be the basis of a finding of negligence or private nuisance. Of course, a neighbor has the right to remove so much of the tree as overhangs his property. To impose liability for injuries sustained as a result of debris from a healthy tree on property adjoining the site of the accident would be to ignore reality, and would be unworkable. No case has been brought to our attention in which liability has been imposed in such circumstances

On the other hand, if the neighbor’s tree was diseased or decayed, was known to be at risk of falling and the neighbor ignored it, there could be negligence and liability. Either way, if you have homeowner’s insurance, the insurance companies will sort out fault and blame.

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Tree down in Andover, Mass. Courtesy Boston.com

Read our post on Hurricane Sandy Aftermath Here

Massachusetts Fallen Tree Law

Given all the trees and branches which fell across New England, the pressing question of the day is, clearly, who is responsible if my neighbor’s tree or tree branch fell on my house, car, shed, patio, grill, etc. during the storm?

The short answer is that, legally speaking, your neighbor is not liable for a healthy tree falling down during a major storm event. That is considered an “Act of God” for which no one is legally liable (except God of course, but I think he enjoys some type of legal immunity–I’m not sure, I’ll have to research that one). So, you will have to make a claim under your homeowner’s insurance policy for the damage caused by the neighbor’s tree.

As the court stated in the 1983 case of Ponte v. DaSilva:

The failure of a landowner to prevent the blowing or dropping of leaves, branches, and sap from a healthy tree onto a neighbor’s property is not unreasonable and cannot be the basis of a finding of negligence or private nuisance. Of course, a neighbor has the right to remove so much of the tree as overhangs his property. To impose liability for injuries sustained as a result of debris from a healthy tree on property adjoining the site of the accident would be to ignore reality, and would be unworkable. No case has been brought to our attention in which liability has been imposed in such circumstances

On the other hand, if the neighbor’s tree was diseased or decayed, was known to be at risk of falling and the neighbor ignored it, there could be negligence and liability. Either way, if you have homeowner’s insurance, the insurance companies will sort out fault and blame.

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Hurricane Irene Damage, Maryland (courtesy David Yarkin)

If It’s Wet, It’s Probably Not Covered. If It’s Wind, It Is Probably Covered.

What Type of Hurricane Damage Is Covered Under A Massachusetts Homeowners Insurance Policy?

I’m writing this post as I watch Hurricane Irene bore down on Massachusetts, scattering my lawn with tree branches and flickering my lights. My Facebook stream is filling with reports of power outages and basement flooding, but luckily I’ve been spared (for now). *Check that–we’ve had no power since 11am on Sunday, a live wire down on our street, and not an NStar crew to be found anywhere!

Being the dorky real estate attorney that I am, I naturally thought to myself, what type of hurricane damage, if any, is covered under a standard Massachusetts homeowner’s insurance coverage? Well, after some research the short answer is that if it’s wet, it’s probably not covered, but if it’s wind, it is probably covered.

Flooding and Water Damage

Flooding — defined by insurers as any water that rises from the ground or from the sky, including tidal waves, as well as destruction from rapid snow melts — aren’t covered by Massachusetts homeowner’s insurance policies. So the flooded basements from all this rain is likely not covered.

To get reimbursed for water damage, homeowners would need additional flood insurance, which is provided by the federal government but can be purchased through an agent or insurance company. The average flood premium is about $600 annually, but rates go up to nearly $6,000 for the highest-risk coastal properties, according to the National Flood Insurance Program.

Homeowners who live in flood zones probably have flood insurance already: Many lenders won’t provide these home buyers with a mortgage unless they’ve signed up for flood coverage. These homeowners can rest (relatively) easy; if their home floods, flood insurance will pay for that damage. Those unlucky homeowner’s in the interior parts of the state aren’t so lucky.

Wind Damage/Downed Trees

Basic homeowners insurance policies do, however, typically pay for damage caused by winds — including broken windows, torn roofs and any interior damage from water falling into the home. Likewise, if strong winds blow tree limbs or entire trees onto a home, garage or shed, it’s likely covered. (If a tree falls onto a car, many comprehensive auto policies will cover the damage.)

But in many states on the East Coast, homeowners may have to pay a hefty deductible before homeowners’ insurance policies kick in for wind damage — often 1% to 5% of the total amount the home is insured for.

Serious Damage

If a home becomes so damaged that it’s uninhabitable, most standard homeowner policies will pay for a family’s living expenses — including lodging and food — while the house is being repaired.

Making A Claim

As with any insurance damage claim, my advice has always been document, document, document. Take photos and video of the damage. Keep all receipts for fans, blowers, wet vacs, sump pumps, repairs, new windows, etc. Be prepared to wait for the insurance companies to process the thousands of claims arising from Hurricane Irene. And of course, stay safe!

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Weather.com 8/26/11 7:00am

Important Insurance Claims Information: Cleaning Up After Hurricane Irene (click here).

Hurricane Preparedness Bulletin

Reports are now saying that Hurricane Irene is potentially tracking for a direct hit on New England in the wee early morning hours of Monday.

Should you be closing on a purchase or refinance after the storm passes and the Feds declare a Federal Disaster Area, be prepared to have a re-inspection of the property before closing. This is considered to be an Act of God and as a result the borrower will be required to pay for any re-inspection fee. These re-inspections range from $125 to $200. You will receive notice from your lender and re-disclosures prior to closing.

Here is some safety information and insurance claims in preparation for the storm surge.

When a Hurricane is Headed Your Way

Careful preparation and planning before a storm arrives will help minimize damage, loss and grief.  The following is a short listing of what could be done to prepare yourself and your family during this season.

Pre-Planning:

Obtain information on flood zones and evacuation shelters.  in some area, these can be found in your telephone book or online.

  • Plan an evacuation route to the nearest shelter or “safe” area and keep a map handy.  During emergencies, shelter locations be also be announced on the radio.
  • Replenish emergency kits and supplies.
  • Secure important documents from possible damage or move to a safe location.
  • Develop a list of important phone numbers.
  • Develop a plan to secure loose objects around the house; trim branches and trees.
  • Ensure that your pets have collars and identification tags.

Prior to the Hurricane:

Secure all loose objects outdoors.

  • Secure all windows using plywood.
  • Fill your vehicle with fuel.
  • Charge all batteries (i.e. phone, lamps, flashlights, radios, etc.)
  • Listen to the emergency broadcasts of the storm.
  • Be prepared to evacuate with emergency supplies to a predetermined location.

During the Hurricane:

Stay in doors and away from windows.  Keep to the center of the building on the ground level.

  • Listen to the emergency broadcast on the radio or television.
  • Turn off all electrical devices and appliances that are not needed.
  • Stay away from coastal waters, rivers, streams or other flooding areas.
  • Do not try to cross flooded areas with your vehicle.
  • Listen for instructions from emergency officials when the storm is over.

Emergency Supplies and Kits:

First aid kit and personal medications

  • Drinking water
  • Ice Chest
  • Lighter, matches and candles
  • Clothing, personal toiletries
  • Sleeping bags and blankets
  • Portable radio and flashlight
  • Extra batteries
  • Non-perishable foods
  • Manual can opener
  • Important documents
  • Quiet games, books, or toys for children

Here are the carrier’s phone numbers:

Acadia Insurance (800) 691-4966
AIG (Global Energy) (877) 743-7669
Chartis (formerly AIG) Private Client Group 888-760-9195
Andover Companies: Cambridge Mutual & Merrimack Mutual (800) 225-0770
Chubb Group (800) 252-4670
Commerce (800) 221-1605
Fireman’s Fund (888) 347-3428
Great American (888) 882-3835
Guard Insurance Group (888) 639-2567
Hanover Insurance (800) 628-0250
Hartford Insurance (800) 327-3636
Hingham Mutual (After hours claims) (800) 972-5399
Mass. Property Insurance Underwriting (800) 851-8978
Trident (After hours claims) (800) 288-2502
Tower (877) 365-8693
Quincy Mutual (800) 490-0047
Safety Insurance (800) 951-2100
Selective Insurance (866) 455-9969
Splash Program (Emergency Pollution related claims) (866) 577-5274
Splash Program (Emergency Non-Pollution related claims) (800) 746-3835
Travelers Personal lines:
(877) 425-2466
Commercial:
(800) 832-7839
Utica National (800) 216-1420
Vermont Mutual (After hours claims) (800) 445-2330
Zurich/Maryland (800) 565-6295

 

If you do not currently have homeowner’s insurance please do not call today to get any, as the carriers will not write coverage until after the storm passes.

Here is the latest forecast from NECN.

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mold_houseApplication of “Discovery Rule” Enables Toxic Mold Claim To Survive Dismissal

Toxic mold is a dangerous condition that can arise in buildings with untreated water leaks and penetration. The most common form of “toxic mold” is Stachybotrys chartarum, a greenish-black mold. It can grow on material with a high cellulose and low nitrogen content, such as fiberboard, gypsum board, paper, dust, and lint. Growth occurs when there is moisture from water damage, excessive humidity, water leaks, condensation, water infiltration, or flooding. Constant moisture is required for its growth. According to the Centers for Disease Control, toxic mold causes upper respiratory tract symptoms, cough, and wheeze in otherwise healthy people; with asthma symptoms in people with asthma; and with hypersensitivity pneumonitis in individuals susceptible to that immune-mediated condition. The CDC also found limited or suggestive evidence linking indoor mold exposure and respiratory illness in otherwise healthy children.

Roof Leaks Lead To Toxic Mold

According to the August 15, 2011 case of Doherty v. Admiral’s Flagship Condominium Trust (see below), Denise Doherty owned a condominium unit at the Admiral’s Flagship Condominium in Chelsea. (If you are driving into Boston northbound on the Mystic Bridge, these are the condominium units on Admiral’s Hill under the bridge.) In 2004, a roof leak led to ceiling cracks and loosening plaster in Doherty’s unit, and she requested that repairs be made. Any repairs made were either untimely or inappropriate. In February, 2006, Doherty noticed mushrooms and water infiltration on the same threshold and notified the condominium management company. It replied that the threshold was rotted, and required replacement. The management company did a shoddy job repairing the damage.

A month later a mold remediation company found hazardous mold in unsafe levels in Doherty’s unit caused by water infiltration and chronic dampness. Following this discovery, the condominium management promised to repair the leaks, and that the mold would be removed. A mold remediation was attempted, but failed, and mold remains in the unit. In 2008, Doherty’s doctor ordered her to vacate her unit due to the presence of the mold. Although Doherty has continued to request repairs of the leaks and chronic dampness, and a full remediation of the mold, no further action has been taken. She filed suit against the condominium and its manager on February 13, 2009, claiming that due to the defendants’ failure to repair, she has suffered severe, permanent health problems, lost income, loss of her personal property, and loss of the value of her condominium unit.

Limitations Period Begins When Toxic Mold Symptoms First Arise

Doherty’s personal injury claims are governed by a 3 year statute of limitations. A statute of limitations is the time period set by law by which a person is allowed to file a lawsuit. If you sleep on your rights, you lose them.

The condominium claimed that the stopwatch for Doherty’s claims started in 2004 when the water leak occurred, and that she filed her lawsuit 2 years late. The lower court agreed and dismissed the lawsuit.

The Appeals Court overturned that ruling, holding that under the “discovery rule” the statute of limitations for a toxic mold claim starts when the injured person becomes aware of the existence of toxic mold through investigation or some physical manifestation of being exposed to toxic mold, such as respiratory symptoms, asthma and the like. In Doherty’s case, she first became aware of the toxic mold when the lab results came back in March 2006 which was within the 3 year limitations period. The court reasoned:

We agree with the foregoing cases that without some indication of a hazardous contamination, the plaintiff could not have been aware that she was being exposed to toxic mold, regardless of when the leak began. Contrary to the defendants argument, it is not a certainty that all water infiltration will eventually evolve into toxic mold. To conclude otherwise would encourage, and possibly even require, a plaintiff to preemptively file suit the moment water starts to infiltrate a dwelling or other building, before any mold or mold-related injury has even occurred.

According to the judges themselves, this decision is the first Massachusetts appellate case dealing with the statute of limitations for toxic mold, so it’s quite important. The case will make it easier for toxic mold victims to sue wrongdoers in state court. The case also highlights the importance of addressing water leaks in condominiums quickly and professionally. If the condominium management had properly dealt with the roof leaks in the first place, perhaps Ms. Doherty would not have been exposed to toxic mold in the first place!

Doherty v. Admiral’s Condo Case

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