Massachusetts Real Estate Lawyer Blog

Appeals Court of Massachusetts Decides Easement Issue in Neighbors’ Dispute

Published on: September 4, 2015 | by Pulgini & Norton, LLP

The Massachusetts Court of Appeals recently ruled on a property dispute between neighboring landowners regarding their use and enjoyment of an easement. In Burke v. Spalenza, No. 14-P-594, (Mass. App. Ct. Sept. 2, 2015), the dispute arose when the defendants began parking their large utility vehicle in a manner that prevented the plaintiffs from accessing their property through a shared driveway.

The plaintiffs sought a declaratory judgment from the Massachusetts Land Court to determine the location, scope, and dimensions of the easement they claimed to hold by title, or in the alternative, find that they possess a prescriptive easement. The Land Court issued a judgment declaring that the parties are bound by an easement through the defendants’ property to the plaintiffs’ property, and it adopted a plan submitted by the plaintiffs depicting the scope and location of the driveway. The defendants subsequently appealed the Land Court’s decision.

Massachusetts Court of Appeals Rules that Residents Do Not Own the Homes They Built on Property Leased from Town

Published on: August 28, 2015 | by Pulgini & Norton, LLP

In Touher v. Town of Essex, the Massachusetts Court of Appeals was presented with a somewhat unusual situation involving long-term land leases between the town of Essex and residents who built homes on the leased property. Four sets of plaintiffs filed a complaint with the lower court, seeking a declaration that they owned the buildings erected on property leased to them by Essex and on which they reside. A Superior Court judge found that, although two of the plaintiffs owned their cottages as personal property, the more substantial homes constructed by the other two plaintiffs were fixtures that belonged to the town. On appeal, the court affirmed the ruling.

For over a century, the town of Essex has been leasing plots of waterfront property to seasonal residents. Many residents built seasonal cottages on their leased property and paid real estate taxes on the cottages. Fearing the town would eventually sell the land and the structures built on them, the plaintiffs filed a complaint seeking a declaration that they owned their homes as personal property.

In determining whether the residents’ houses were fixtures or personal property, the court cited to the general rule that if it has become so affixed that its identity is lost, or so annexed that it cannot be removed without material injury to the real estate or to itself, it is a fixture. In Touher, the court held that the residents’ homes, one of which expanded the original cottage to double its size, and the other of which was a substantial three-story structure, could not be removed without significant damage to the homes and were permanently affixed to the land.

Massachusetts Land Court Finds Property Owners Have Standing to Challenge Neighbor’s Zoning Variance

Published on: August 21, 2015 | by Pulgini & Norton, LLP

The Massachusetts Land Court released a recent decision in the case of Holmes v. Guinen, addressing the issues of whether the plaintiffs have standing to challenge the zoning variance granted to their defendant-neighbor to construct a new house only five feet from their property line, and whether the variance was properly granted to the defendant.

Standing

To have standing to challenge a decision granting a variance, a person must be aggrieved by the decision. By statute, those whose property abuts the subject property or whose property is within 300 feet of the subject property are entitled to a rebuttable presumption that they are aggrieved and therefore have standing. Since the plaintiff’s property abuts the subject property, they have a rebuttable presumption of standing. A defendant can rebut the presumption by either showing that the reasons the plaintiff claims to be aggrieved are not those protected by the Zoning Act, or that the plaintiff’s allegations are unfounded or de minimis. If the defendant sufficiently rebuts the presumption, the burden is on the plaintiff to prove standing by establishing, with direct facts, that the injury stemming from the decision is special and different from the concerns of the rest of the community.

Massachusetts Land Court Affirms Denial of Homeowner’s Application for Zoning Variance, Special Permit

Published on: August 14, 2015 | by Pulgini & Norton, LLP

The case of Krock v. Nelson, No. 395229 (July 13, 2015), came to the Massachusetts Land Court following a lengthy procedural history beginning in 2009. The court ultimately affirmed the decision of the Zoning Board of Appeals of the Town of Mashpee, which denied the plaintiffs’ application for a zoning variance and special permit.

The plaintiffs’ property is an undersized lot consisting of 5,000 square feet, with less than the minimum lot size, frontage, front yard setback, and side yard setbacks required by the local zoning bylaws. The single-family dwelling located on the property is 975 square feet, with a lot coverage of 19.5%. Although the property is nonconforming, it is grandfathered by law and can be used in its current condition.

The plaintiffs filed an application for a variance to raze the existing building and replace it with a new 2.5-story, 3,000-square foot single-family home, which would result in a lot coverage of 30%. Their proposal, however, would not change the property’s existing non-conformities to comply with the bylaw’s requirements. They also sought a special permit to modify an existing, non-conforming structure, as well as a written determination that the proposed development would not be substantially more detrimental to the neighborhood than the existing structure.

Massachusetts Court Affirms Bank’s Claim for Possession of Homeowner’s Property in Foreclosure Case

Published on: August 7, 2015 | by Pulgini & Norton, LLP

The Massachusetts Court of Appeals recently decided whether a claim of unfair and deceptive review of a homeowner’s loan modification request could affect the bank’s title post-foreclosure. Bank of New York Mellon v. Fernandez arose out of a post-foreclosure summary judgment action filed by the bank, which was seeking to recover possession of the property. The homeowner answered with affirmative defenses and counterclaims asserting that the bank’s mortgage servicer had failed to comply with the Home Affordable Modification Program (HAMP) regulations when it denied her request to modify her loan. The case reached the court of appeals when the homeowner appealed a lower court’s judgment awarding possession of her house to the bank.

The case is slightly unusual because typically in a post-foreclosure summary judgment action, the only legal issue for the Housing Court to determine is whether the bank strictly complied with the power of sale provided in the mortgage, thereby lawfully obtaining title to the property. As a result, the homeowner’s claim that the mortgage servicer violated laws governing the loan modification program would generally not affect the bank’s title and right to possession.

Massachusetts Land Court Finds For Owners in Property Tax Lien Foreclosure Proceeding

Published on: July 31, 2015 | by Pulgini & Norton, LLP

In a newly released opinion, the Massachusetts Land Court discussed the harsh consequences of property tax lien foreclosure proceedings. In Tallage LLC v. Meaney, the homeowners’ unpaid water and sewer bills became a tax debt, since those utilities are provided by the city. The city auctions its tax receivables to private companies, which then pursue the taxpayers for the lien amounts and may obtain a right of redemption on a property tax lien. In Tallage, the company that purchased the property owners’ tax liens initiated tax lien foreclosure proceedings against the owners.

Procedurally, in tax foreclosure cases, the lienholder files an action in the Land Court to foreclose the right of redemption. If no voluntary agreement is made as to payment of a redemption amount, the court will determine the amount and date by which it must be paid. If the taxpayer fails to comply with the court’s order, the right of redemption is foreclosed and a judgment is entered. However, the judgment may be vacated if the party moves the court to do so within one year, and the court finds that, after careful consideration, this is required to accomplish justice.

It is important to note that there are key differences separating tax foreclosure cases from mortgage and other kinds of foreclosures. First, since the interest rate accrues at 14% from the time the taxes are due until the sale occurs, and 16% thereafter, small tax bills can rapidly become significant. In addition, unlike mortgage foreclosures or judgment liens where the remaining sale proceeds (minus the obligation amount) are returned to the property owner, when the right of redemption on a property tax lien is foreclosed, the lienholder acquires “absolute title” to the property, eliminating all of the property owner’s interest and equity. Remarkably, the lienholder receives the entire amount of the proceeds once the foreclosure is final, regardless of the amount owned on the lien. In Tallage, the owners’ property had a fair market value in excess of $270,000. The plaintiff acquired the tax title to the property for only $1,052—a windfall that did not go unnoticed by the court.

Massachusetts Supreme Judicial Court Finds in Favor of Homeowners, Voids Foreclosure Sale

Published on: July 24, 2015 | by Pulgini & Norton, LLP

In a newly released opinion, the Supreme Judicial Court of Massachusetts took on the issue of illegal foreclosure sales. In an action filed by plaintiff-homeowners against their mortgage lender, Pinti v. Emigrant Mortgage Co., No. SJC-11742 (Mass. July 17, 2015), the homeowners challenged the validity of the foreclosure sale on their home, alleging that, since the lender failed to comply with the mortgage provisions, the foreclosure sale was void. The court agreed, finding that strict compliance with the mortgage provisions was required as a condition of sale, and it ruled in favor of the homeowners.

In Pinti v. Emigrant Mortgage Co., the terms of the mortgage provided that if the homeowners default on their mortgage payments, the lender can accelerate their loan only after providing notice to the homeowners of certain information. Specifically, the lender was obligated to provide notice of the default and inform the homeowners of the action required to cure the default, of the date by which the default must be cured, and that failure to cure by the date provided may result in acceleration of the mortgage. The lender’s notice must also state that they have “the right to bring a court action to assert the non-existence of a default or any other defense to acceleration and sale.” Upon the homeowner’s failure to cure the default, the mortgage allows the lender to invoke the statutory power of sale.

In 2012, the lender foreclosed on the homeowners by exercising the power of sale contained in the mortgage. However, while the lender did send notice as required under the mortgage, the notice merely stated that the homeowners have “the right to assert in any lawsuit for foreclosure and sale the nonexistence of a default or any other defense [they] may have to acceleration and foreclosure and sale.” The lender argued in court that it had complied with the terms of the mortgage substantially, although not strictly, and that it was sufficient for a valid foreclosure sale. The court disagreed with the lender, holding that in light of the fact that the Massachusetts statutory power of sale entitles the mortgagee to foreclose without judicial oversight, one who sells under a power of sale must follow strictly its terms, and failure to do so results in “no valid execution of the power, and the sale is wholly void.”

Massachusetts Court Ruling Questions Whether Wells Fargo Satisfied Procedural Requirements in Foreclosure Case

Published on: July 17, 2015 | by Pulgini & Norton, LLP

The Appeals Court of Massachusetts recently issued an opinion in Wells Fargo Bank, N.A. v. Cook, 87 Mass.App.Ct. 382 (2015), evaluating whether the procedural and substantive requirements set out in the United States House and Urban Development (HUD) regulations were satisfied by Wells Fargo in a foreclosure case.

The homeowners in the case had refinanced their property in 2008 with a loan secured by a mortgage. Since the Federal Housing Administration had insured their mortgage, HUD regulations were incorporated into it. The HUD regulation at issue in the case restricted Wells Fargo’s right to accelerate the loan payments and foreclose on the house in the event of a default. Specifically, it provided that Wells Fargo must have a face-to-face interview with the homeowners, or attempt to do so, before three payments due on the mortgage go unpaid.

On August 12, 2008, Wells Fargo held an event at Gillette Stadium, providing hundreds of people with an opportunity to settle their mortgage disputes and negotiate loan modifications in a face-to-face interview. After missing three installments, the homeowners attended the event and met with a representative of Wells Fargo for 15 minutes. The homeowners testified that they attempted to cure the default by bringing a cash payment, but the representative would not accept it. The homeowners were instead told that they would receive a letter regarding the loan modification in the mail, which they did several days later, and they accepted the terms. However, after the homeowners made two payments under the new agreement, Wells Fargo rejected their third payment, declared the loan in default, accelerated the payments, and foreclosed. A lower court granted Wells Fargo’s eviction action in a summary judgment against the homeowners, which they appealed.

Massachusetts Attorney General Supports Supreme Court Disparate Impact Housing Decision

Published on: July 10, 2015 | by Pulgini & Norton, LLP

The Attorney General released a statement late last month in response to a recent U.S. Supreme Court decision regarding disparate impact claims made under the Fair Housing Act (FHA). The ruling was in alignment with the Attorney General’s argument that both businesses and individuals involved in real estate transactions, including the renting and selling of homes, must be held legally accountable for the discriminatory effects of their practices.

The Court specifically referred to the amicus curiae brief filed by the Attorney General’s office for the proposition that disparate impact claims are critical for states to be able to combat the specific sort of systematic discrimination that the FHA was designed to address.

Massachusetts Court: Real Property Liens Survive Bankruptcy Proceedings

Published on: June 24, 2015 | by Pulgini & Norton, LLP

In a recent Massachusetts Supreme Judicial Court case, Christakis v. Jeanne D’Arc Credit Union, Mass. Sup. Jud. Ct. (2015), the court had before it the issue of whether or not judicial liens on real property remain after the owner of the property receives a discharge under Chapter 7 of the Bankruptcy Code.

The plaintiff had filed a complaint in land court to remove judicial liens on the real property she owned. Three creditors had obtained final judgments against the plaintiff owner. The liens on the property, which purportedly arose out of unpaid credit card bills, were finalized prior to the plaintiff’s filing for bankruptcy.

Once the plaintiff filed for bankruptcy, there were various cross motions and motions for summary judgment motions filed. However, only one out of the three creditors responded to the filing.