Massachusetts Real Estate Lawyer Blog

Good News For Massachusetts Home Buyers: FHFA Relaxes Mortgage Guidelines

Published on: November 5, 2014 | by Pulgini & Norton, LLP

The Federal Housing Finance Agency, regulator of Fannie Mae and Freddie Mac, is initiating changes in lending rules that would allow more potential buyers to qualify for home mortgages, especially in high-demand markets like Massachusetts. These changes should enhance buyers’ ability to participate in the housing recovery.

Fannie Mae and Freddie Mac are not themselves mortgage lenders but are potential purchasers of loans from banks, credit unions, and other financial institutions. This frees up funds so the direct lenders can make loans to more aspiring homeowners. To qualify to sell loans to Fannie or Freddie, the lenders must follow guidelines laid down by the federal agencies or face the possibility of being forced to buy back the loans. During the recession and the decline in property values and the plague of foreclosures, Fannie/Freddie imposed stringent requirements on borrowers and lenders. In response, banks adopted additional requirements—called “overlays”—that impose even more rigorous requirements on borrowers. Although Fannie/Freddie loans currently require a FICO credit score of at least 620 to qualify, most lenders demand a credit score of 740 or more for a borrower to qualify for a loan.

Although interest rates are currently the lowest they have been in 18 months, the overlays have excluded many potential borrowers from the real estate market. This in turn has led to a decline in home sales, slowing the housing recovery. In fact, home sales have been down in six of the past nine months in 2014 in Massachusetts and are down nationally too.

Federal Court Dismisses Lawsuit on Massachusetts Foreclosure Prevention Law

Published on: October 24, 2014 | by Pulgini & Norton, LLP

Massachusetts Attorney General Sues Federal Agencies

In Commonwealth of Massachusetts v Federal Housing Finance Agency et al., a federal judge dismissed a lawsuit brought by Massachusetts Attorney General Martha Coakley in which she accused mortgage finance giants Fannie Mae and Freddie Mac of violating a state law meant to prevent Massachusetts residents from losing their homes to foreclosure.

The Attorney General, in a complaint filed in June in Massachusetts state court in Suffolk County, alleged that Fannie Mae and Freddie Mac, and the Federal HousingFinance Agency (FHFA), as the agencies’ conservator, refused to comply with Massachusetts law, specifically An Act to Prevent Unnecessary and Unreasonable Foreclosures. The Legislature enacted the law to keep Massachusetts residents in their homes rather than allowing them to lose them to foreclosure. It prohibits creditors’ practice of preventing non-profits from buying foreclosed homes solely on the basis that the non-profit will then resell the property to its former owner at a reduced principal balance.

For example, as described in the complaint, one buyback program is Boston Community Capital’s (BCC) “Stabilizing Urban Neighborhoods” Initiative (SUN). SUN buys homes that have been foreclosed and are now owned by the banks holding the defaulted mortgages. The non-profit buys homes at their current market value and then sells the homes to the original homeowners, the only condition being that they can qualify for financing, which the non-profit makes sure is both available and affordable.

Zoning Reform Needed to Make Massachusetts Housing Affordable

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

Over-regulation Drives Up Housing Costs

Real estate attorneys and other professionals in Massachusetts agree that housing in the Commonwealth is not affordable to most people. Massachusetts does not produce enough new housing units to make the market rate housing affordable to the average worker. Zoning isn’t the sole source of the problem, but land use regulation is the infrastructure upon which Massachusetts’ ability to compete economically against other states depends.

Land Use Partnership Act (“LUPA”)

Fortunately, extensive work has gone into trying to improve this situation, most notably the Zoning Reform Task Force meetings of 2007-2009. The result of that effort, the Land Use Partnership Act (LUPA), is a step forward, but far from perfect. It was filed in both the 2009-2010 and the 2011-2012 legislative sessions. When that effort stalled, for many, the zoning reform effort seemed to pass into abeyance.

LUPA has the objective of advancing five inter-related goals:

That communities prepare and adopt land use plans that take into account the Commonwealth’s broader land use objectives;
That communities enact and implement zoning and other land use regulations in a manner consistent with their overall plans and objectives;
That communities enact and implement zoning and other land use regulations that, to the extent practicable, make development as of right;
That communities adopt practices that, to the extent practicable, make land use permitting prompt and predictable; and
That property owners obtaining land use permits have a reasonable opportunity to use them.

You Need a Massachusetts Real Estate Attorney to Navigate Special Zoning on Martha’s Vineyard

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

A property owner seeking to build in a historic area will need the assistance of an experienced Massachusetts real estate attorney. Some of the procedures available to landowners whose plans are blocked by local restrictions are non-judicial in nature, but they may be even more complex than the court process. The Appeals Court in the case of Therese M. Hall & others vs. Martha’s Vineyard Commission & another, No. 13-P-626, rendered a decision that left a disappointed family with a glimmer of hope of being able to develop their land, if they were to use one of these quasi-judicial avenues.

In the 1960s, the Hall family acquired approximately 125 acres of undeveloped land near five ancient paths or ways within Edgartown and West Tisbury on Martha’s Vineyard. The paths and ways are known as Ben Tom’s Road, Middle Line Path, Pennywise Path, Tar Kiln Road, and Watcha Path. The Hall family collectively owns about 68 percent of the area adjoining the paths and ways, almost none of which has been developed.

Any plans to develop their land must first go through the Martha’s Vineyard Commission (MVC). By St. 1977, c. 831 (Act), the Legislature empowered the MVC as a regional commission with authority to regulate the lands and waters of Martha’s Vineyard. The Act authorizes districts of critical planning concern [DCPC] status, inter alia, for “an area which possesses unique natural, historical, ecological, scientific, or cultural resources of regional . . . significance.” St. 1977, c. 831, § 8.

Your Massachusetts Real Estate Attorney Can Help You Protect Your Property From Effects of Climate Change

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

Major storms Katrina and Sandy have made catastrophic hurricane damage in the United States a reality, and there are significant lessons that need to be applied to protect our shorelines in the future. There are specific vulnerabilities the city of Boston will face in the event of sea level rise, and there is a need to ascertain how critical some of these threats are to the average Bostonian, and in particular the Boston property owner.

Up and down the New England coastline, a precedent has been set for the utilization of sea walls, dunes, and other effective man-made and natural flood protective strategies. There has not been a significant flood preventive structure built since 1978, but waterfront development of Boston has continued. The desirability of both commerce and real estate in the Boston Harbor region has increased significantly, especially since the completion of the project nicknamed “The Big Dig.” Moving forward, as this ongoing development continues, constant vigilance is needed to be certain that both new and existing development is assessed as to adequacy in curtailing ongoing threats from flooding.

Massachusetts became the first state to officially incorporate climate change effects into its environmental review procedures by adopting legislation that directs agencies to consider reasonably foreseeable climate change effects, including additional greenhouse gas emissions and predicted sea level rise. Massachusetts G.L. ch. 30, § 61 (2012).

How Your Massachusetts Real Estate Attorney Can Help You With a Development Agreement

Published on: September 23, 2014 | by Pulgini & Norton, LLP

Closing a real estate transaction can be a difficult process. One or more of the parties may change their minds or try to sabotage the deal for various reasons. Trying to negotiate, even with a formerly trusted business associate or partner, may become an agonizing fiasco. In such a situation, the services of an experienced real estate attorney are invaluable to assure a successful closing.

The Supreme Judicial Court of Massachusetts, in the case of K.G.M. Custom Homes, Inc. vs. Stephen J. Prosky & others, No. SJC-11449, on May 29, 2014, issued a decision to try to remedy an unraveled real estate development deal. The main issue the court had to sort out was the proper damages for the aggrieved party, since there was no way to salvage the actual deal itself.

The Proskys are three siblings who own a fairly large piece of undeveloped land in Norton. In 1999, they talked to their real estate broker, David Joyce, about the possibility of selling the land to a developer. He suggested the property might be attractive to someone who wanted to build affordable housing. The broker referred the Proskys to K.G.M., a husband and wife real estate development company.
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Property Owners’ Responsibilities Under Massachusetts Lead Law

Published on: September 16, 2014 | by Pulgini & Norton, LLP

If you purchase or rent out residential property in Massachusetts where young children live or may live, you need to be aware of the requirements of the Massachusetts Lead Law, 105 CMR 460.00, and in particular CMR 460.100, Duty of Owner(s) of Residential Premises.

Lead poisoning is a hazard to many young children in Massachusetts, who are exposed to lead paint with harmful effects. Children exposed to lead may experience brain damage, kidney failure, and learning disorders. The Lead Law was enacted to prevent these serious health consequences, which can be permanent and disabling.

Under the Lead Law, a property owner must either remove or safely cover lead paint. The Lead Law applies to all homes built before 1978 when a child under the age of six is a resident of the household. Examples of hazardous circumstances that would trigger the law include paint chips and lead paint anywhere that a child may reach it. Subject properties include both an owner’s residence and a rental property. There are grants and loans available to help pay for lead abatement.

If You Have a Beach House in Massachusetts, You May Also Have Unexpected Guests

Published on: September 9, 2014 | by Pulgini & Norton, LLP

If you own beachfront property in Massachusetts, or are considering purchasing such property, it might save some surprises if you consult a Massachusetts real estate attorney regarding your rights and the rights of others to access your private beach.

Over the years, Massachusetts courts have only slightly increased the scope of public activities that are guaranteed to be available even on privately held tideland property. These public rights include fishing, bird hunting, and boating.

Fortunately, Massachusetts law gives coastal property owners more extensive private rights to their beachfront area than other states.

Ask Your Massachusetts Real Estate Attorney About the Dover Amendment Before You Purchase A Home

Published on: September 2, 2014 | by Pulgini & Norton, LLP

When you are looking at homes for sale, you consider factors like the square footage, the number of bedrooms and bathrooms, the asking price, and the location. A nearby church or school may seem like an enhancement, but in fact it calls for investigation and a consultation with a real estate attorney.

The character of a community can be affected by zoning regulations and also by the presence of institutions that are in part exempt from zoning regulations.

The Dover Amendment, Mass. G. L. c. 40A, section 3, exempts religious and educational institutions from local zoning ordinances. However, it does not completely exempt such facilities from local regulation of the following:

bulk of structures,
height of structures,
yard sizes,
lot area,
setbacks,
open space,
parking, and
building footprints.

How a Real Estate Attorney Can Ease Your Worries About Easements

Published on: August 25, 2014 | by Pulgini & Norton, LLP

A prospective purchaser of property may discover that there is an easement giving a non-owner, whether a person, company, or public entity, the right to use a portion of the property. An easement is usually a passageway between two properties, possibly for a driveway when one property does not have direct access to a street, or for power or telephone lines.

An easement may be negotiated between neighbors regarding their adjacent properties, during the course of their ownership. The issue may then be raised or contested by subsequent owners of what is called the servient estate, the property on which the easement exists.

The existence of an easement may be shown in the property deed, or in a subdivision plan, or both. Verbal agreements are not favored by the courts, but if they are well verified, they may stand up, if there is additional evidence that both property owners intended to create the easement.