Massachusetts Real Estate Lawyer Blog

Courts Recognize Importance of Lawyer Involvement in Real Estate Transactions; Massachusetts Attorneys Required in Closings

Published on: January 20, 2015 | by Pulgini & Norton, LLP

The landmark decision reached by the U.S. Court of Appeals for the First Circuit, in Real Estate Bar Association (REBA) v. National Estate Information Services (NREIS), 459 Mass. 512 (2011), affirmed not only the mandatory presence of but the substantial participation and involvement of a Massachusetts attorney in real estate closing proceedings.

The issue in the case was the legality of the NREIS’s actions related to providing so-called “drive by closing attorneys” and all the necessary required documents as part of its services. NREIS provided nationwide services for closings, and it had a list of contract attorneys who would arrive at closing proceedings to provide limited services and in order to meet the attendance requirement under Massachusetts law.

The justices in the case cited a lack of information necessary to determine whether the NREIS was engaged in the unauthorized practice of law, but they reaffirmed that the conveyance of real property and the various corollary documents associated with the transfer did amount to the practice of law, and therefore the situation required more than the mere presence of an attorney.

Massachusetts Mortgage Laws and Avoiding Foreclosure

Published on: January 13, 2015 | by Pulgini & Norton, LLP

The threat of a foreclosure is scary. Whether you have lived in your home for many years, or just a few months, having to leave due to falling behind on payments is something that no one wants to have to do. However, if you receive a foreclosure notice, it is imperative that you do not just ignore it.

Massachusetts law has a very generous grace period for homeowners facing foreclosure, but in order to take full advantage, you have to address the default payments head on. If you are not sure how you want to proceed, but you know that you don’t want to lose your house, hiring an experienced Massachusetts real estate attorney is one way to ensure that your rights will be zealously advocated for.

Mass. G.L. Ch. 244 Section 35A (b) provides that, “a mortgagor of residential property shall have a 150-day right to cure a default of a required payment as provided in the residential mortgage or note secured by the residential property[.]” The default is cured by a full payment of all amounts that are due.

The Duty to Disclose Defects, or Lack Thereof, in Massachusetts Real Estate Transactions

Published on: January 6, 2015 | by Pulgini & Norton, LLP

Buying a new home can be an incredibly exciting and simultaneously stressful situation. It is not difficult to imagine the potential hassles that can arise when the property that you saved up for years to purchase, and continue to work hard to afford, begins to show signs of problems that were not fully disclosed at the time of purchase.

Generally speaking, since the buyer and seller are by the very nature of the transaction in a conflict of interest, there is no special fiduciary relationship, and thus sellers do not owe much of a legal duty to disclose information to buyers at the time of the sale.

Anti-Big Box Zoning Proposed In Easthampton, Massachusetts

Published on: December 30, 2014 | by Pulgini & Norton, LLP

Easthampton Proposes Building Size Limit To Exclude Big Box Retailers

In a move calculated to enhance the business climate for small to medium-size businesses, the City Council of Easthampton, Massachusetts is considering an ordinance to ban big-box retailers all over the city. Only the industrially zoned area would be excluded from the new ordinance, which limits buildings to a maximum of 50,000 square feet. The Ordinance Committee and Planning Board are considering the proposed ordinance, introduced by City Council President Joseph McCoy, acting on behalf of David Gardner and Daniel Hagan, Jr. The initial discussions among members of the Ordinance Committee took place at its November 25 and December 10 meetings, as posted in published agendas. No recommendation has yet been issued, according to chairman and District 4 councilor Salem Derby. The official debate before the Planning Commission has yet to be scheduled. McCoy said there would be plenty of opportunity for the public to weigh in on the proposed building size cap, particularly as the Planning Board conducts its evaluation. Public hearings will be held, he said.

Gardner formerly chaired the Zoning Board of Appeals and was also on the Planning Board. He is a member of Easthampton’s Economic Development and Industrial Commission (EDIC). Hagan, an attorney, was a leader in 2010 in petitioning to limit the size of the highway business district on Route 10, hoping to use the limitation to thwart the development of big-box stores, a plan rejected by the Planning Board.

Proposal Is Called Compatible With Existing Business Buildings’ Scale, Encouraging For Business Growth

Gardner’s position is that the proposal to limit the size of retail buildings is compatible with goals and future planning set forth in the City of Easthampton Master Plan. The proposed limitations on building size would encourage the growth of small businesses and discourage development that’s out of scale with other elements of a neighborhood or commercial district. The 50,000-square-foot limit would not exclude smaller-scale retailers and is not unreasonable. Gardner offered examples of existing commercial buildings that would be in compliance with the new limits, such as the Easthampton Savings Bank at 28,700 square feet, the Municipal Building at 26,000 square feet, and Valley Medical at 31,000 square feet.

Your Massachusetts Real Estate Attorney Can Assess the Possibility of Lowering Your Property Tax

Published on: December 17, 2014 | by Pulgini & Norton, LLP

Boston Property Values Skyrocket

Owners of commercial and residential properties all over the Boston area are facing higher property tax assessments. This goes along with the good news – bad news phenomenon of the relentlessly rising value of Boston real estate. In fact, the collective value of Boston residential and commercial properties has now soared to $100 billion, says the City Assessor’s Office. Next year, property owners will find tax bills in the mail, reflecting their higher assessments and the associated higher property taxes to be calculated in the beginning of 2015.

During the last decade, Boston’s real estate has been transformed by massive public and private developments that have changed the character of many areas of the city. The Seaport District, formerly a barren waste of parking lots, is now the site of new commercial office space. Downtown has become more accessible via the renovation of transportation corridors, such as The Big Dig and Rose Kennedy Greenway. New office and residential towers have risen from North Station to the Fenway. In the residential market as well, prices have shown a dramatic shift upwards. Condominiums in the heart of Boston sold for $830,000 in the fall of 2014, a price 16% higher than in 2013. In neighborhoods such as the Back Bay, prices are even higher. The average condo there is now valued at more than $1.4 million.

Higher Assessed Values Mean Higher Property Taxes

Higher assessments lead to higher property taxes, a potential deal-breaker for a business owner’s bottom line. An advocate for businesses in the Back Bay said tax hikes are one of many factors making it more difficult for smaller shop owners to continue operating there. Some properties, such as a pub on Boylston Street, have gone up in assessed value by as much as 81 percent, from $1.9 million to $3.5 million. This would add tens of thousands of dollars to the property owner’s annual tax bill. Small business owners predict hardships, since income may not rise proportionately to cover the increased tax expense. Owners of local businesses are concerned that higher costs will drive out all but large national and international chain stores, altering the character of neighborhoods and resulting in vistas of block upon block of banks and cell phone stores.

Massachusetts Mortgage Holders Benefit From Extension of Tax Break

Published on: December 10, 2014 | by Pulgini & Norton, LLP

U.S. Congress Set To Extend Relief For Mortgage Holders

More than 30 percent of federal income tax filers in Massachusetts claim the mortgage interest deduction. Many of these mortgage holders in Massachusetts could potentially benefit from the proposed Tax Increase Prevention Act of 2014. Congress is expected to enact this extension of an earlier mortgage holder relief law before taking its recess at the end of 2014. The House of Representatives already passed the extension, as H.R. 5771. The Senate is expected to pass its own version of the bill, and then the two will presumably be reconciled and presented to President Obama for his signature.

The new law is the extension of the federal Mortgage Forgiveness Debt Relief Act of 2007. This provision in the IRS Code was enacted by Congress in the aftermath of the collapse of the real estate market after the financial crisis of 2007. The Act relieves taxpayers from the previous provision of the IRS Code that had required a mortgage holder to report as income any mortgage debt forgiven by a lender, such as if a homeowner whose mortgage was more than the value of his or her home made a short sale and the bank accepted the sale price instead of the full amount of the mortgage debt.

Former IRS Code Provisions Will Be Superseded

Under the former IRS Tax Code provisions, if a homeowner borrowed money from a commercial lender and the lender later canceled or forgave the debt, the taxpayer might have had to report the canceled amount as income for tax purposes. The rationale was that when the taxpayer borrowed the money, he or she was not required to report the loan proceeds as income because of the obligation eventually to repay the lender. When that obligation was subsequently canceled, the amount received as loan proceeds became reportable as income because there was no longer any obligation to repay the lender. Under the former tax provision, the lender reported the amount of the canceled debt to both the borrower and the IRS on a Form 1099-C, Cancellation of Debt.

Your Massachusetts Real Estate Lawyer Tells How Snow Removal Laws Affect You

Published on: December 3, 2014 | by Pulgini & Norton, LLP

Massachusetts Snow Removal Statutes

In July 2010, a series of state statutes went into effect that are particularly relevant this winter, with the National Weather Service predicting one Polar Vortex after another to come whirling through the state. Massachusetts General Laws ch. 85, §§ 5, 6, and 7 assign shoveling duties for sidewalks, driveways, and streets, on both public and private property.

If you own property in Massachusetts, whether residential or commercial, you are required by these statutes to take responsibility in a number of ways for removing or mitigating the snow drifts and ice sheets that accumulate on sidewalks and parking lots. This may involve do it yourself shoveling, contracting with a snowplow service, or hiring someone to distribute sand or salt on the accumulated white stuff. If you fail to do your part, and someone is injured as a result, you could face liability for either physical injury, property damage, or both.

Property Owners Responsible For Public Sidewalks

Responsibility for snow-related maintenance is not limited to property you own but may also apply to public property adjoining your private property. In cities like Boston, Worcester, and Lynn, property owners are responsible for keeping the sidewalks in front of their businesses or residences clear of snow and safe for pedestrians. There may even be a time limit on how long you can wait before clearing the sidewalk. The city ordinance in Worcester, for example, allows you only 10 hours after it stops snowing to clear away ice and snow from sidewalks in front of your business or residence. Failure to do so may lead to a fine of $75 for every day the snow or ice remains uncleared. In Boston, a property owner must clear the entire width of the sidewalk or a minimum of 42 inches, within three hours after the snow ceases to fall, to avoid fines. This holds true, even if that monster drift was plowed onto your sidewalk by a city plow. For the specific snow removal ordinance for your town, click the ordinances and bylaws for Massachusetts towns, find your town, and search for “snow removal.” If your town is not listed here, contact your local town or city hall for more information.

Sober Housing Program Improves Massachusetts Neighborhoods

Published on: November 26, 2014 | by Pulgini & Norton, LLP

The Cycle of Homelessness and Addiction

Nothing is sadder than the sight of homeless men and women sleeping in private doorways or public parks even in the nicest neighborhoods. One solution that appears to be gaining ground is the construction of sober living facilities, designed to break the cycle of homelessness and addiction. A state agency and its non-profit subsidiary are funding affordable housing options for men, women, and families, which will ultimately improve Massachusetts neighborhoods for all residents.

MassHousing

MassHousing (The Massachusetts Housing Finance Agency) is an independent, quasi-public agency created to finance affordable housing in Massachusetts. MassHousing sells bonds to raise capital and lends the proceeds to low- and moderate-income homebuyers and homeowners, as well as developers proposing to build or preserve affordable or mixed-income rental housing. MassHousing is self-supporting, not dependent on taxpayer dollars to sustain its operations. It does administer some publicly funded programs on behalf of the Commonwealth. Since its inception in 1966, MassHousing has provided more than $17 billion for affordable housing. As announced in 2014, $292,200 in funding by MassHousing will help create or preserve 66 units of sober housing in Framingham, Holyoke, Leeds, Tewksbury, and Worcester for men, women, and veterans.

Center for Community Recovery Innovations Creates Affordable Sober Housing

The Center for Community Recovery Innovations, Inc. (CCRI) is itself a nonprofit, functioning as a subsidiary corporation of MassHousing. CCRI distributes grants that in turn support non-profits that create or preserve affordable sober housing in Massachusetts. CCRI has awarded more than $7.8 million in grants to build or subsidize 1,700 units of specialized housing in more than 40 communities. CCRI funding is a crucial bridge over gaps in financing for this type of housing, targeted to get projects completed for the residents who need them.

Your Massachusetts Real Estate Attorney Can Advise You On Municipal Impact Fees

Published on: November 19, 2014 | by Pulgini & Norton, LLP

Towns Assess Impact Fees on Developers to Fund Infrastructure

If you are buying a home in a new development, your purchase price may reflect fees paid by the developer to fund the paving of the street in front of your house, and other municipal services. The developer may be able to contest such fees, saving you money. Many towns are assessing impact fees on developers to mitigate the additional costs associated with development, considering options for funding new roads, water and sewer facilities, street lighting, schools, and other support structures. Impact fees are typically imposed upon developers or builders at the time the municipality issues a building permit. The fees are then used to finance needed capital improvements and the expansion of existing facilities. In Massachusetts, Home Rule authority under the state constitution as well as state statutes provide the basis for cities and towns to assess fees in connection with the provision of municipal services. Impact fees to pay for such civic enhancements have been held constitutionally valid.

Courts Scrutinize Who Benefits from Impact Fees

Pursuant to Emerson College v. City of Boston, Massachusetts courts apply an impact fee analysis that limits the ability of municipalities to allocate the public infrastructure costs associated with new residential development. In that case, on appeal from a property owner’s protest at being charged a fee by the City of Boston for enhanced fire protection, the Supreme Judicial Court of Massachusetts struck down the impact fee, ruling that it was not voluntary and provided no particularized benefit to the payer of the fee. In the 20 years since Emerson College, Massachusetts courts have continued to strike down these fees.

In the case of Greater Franklin Developers Association v. Town of Franklin, the Appeals Court considered the developers’ challenge to a “school impact fee” charged to them when they applied for permits to start construction on a new residential project. The Town of Franklin asked the court to find that the need for additional classroom space was directly related to projected growth. The court declined to do so, finding instead that the Town’s argument failed the Emerson College test, since the “benefit of expanded school facilities is not particularized to the fee payers” but enhances “the entire community.”

More Good News for Massachusetts Home Buyers – Prices Are Coming Down

Published on: November 12, 2014 | by Pulgini & Norton, LLP

Massachusetts Real Estate Market Cooling Down

The Massachusetts housing market, particularly in the Boston area, has finally started to cool down after a blazing hot summer that saw relentlessly rising home prices. Although the fall and winter are traditionally slow for real estate sales, this year is seeing an unseasonable reduction in home prices. This is good news for home buyers, especially since interest rates are still at historic lows but are predicted to begin an upward climb due to financial analysts’ belief that the Federal Reserve Bank will allow interest rates to rise by sometime next year. Now is definitely the time to buy.

The third-quarter downward trend showed in a number of areas as diverse as Cape Cod and the Berkshires. The market is transforming from a seller’s kingdom to the realm of the buyer, in both high-end and more humble parts of the Commonwealth. Sellers are enticing buyers with ever-improving deals, including steep price reductions. The online real estate site Zillow.com has published data indicating that 42.7 percent of all home sellers who listed their property for sale reduced their asking price at least once during the three-month span ending Sept. 30, 2014. Sellers reduced their asking price an average of five percent. In the second quarter of 2014, sellers had only reduced listed prices in 33 percent of homes for sale, and the average price cut was slightly less than in the third quarter, at 4.3 percent.