How To Sell a Home Before Foreclosure

One of the most effective means of avoiding foreclosure is to simply sell a home before a foreclosure sale occurs. While this is not the desired option for homeowners who wish to keep their homes, selling a home before foreclosure is a good option in certain circumstances.

Selling a Home v. Defending Against a Foreclosure

The decision to sell a home, rather than defend against a foreclosure, is more often a financial decision than a legal one. The critical factor is generally whether the homeowner has the income to sustain a loan modification or other means of paying the mortgage debt. If the homeowner, even under the best circumstances, is no longer able to afford the home, selling the property is worth considering.

A critical factor in this decision is whether the homeowner has equity in the property. Equity is the owner’s value in the property: the market value of the home less all owed money, including mortgages, home equity loans, and any liens on the property. If a homeowner owes more than the home is worth (commonly known as being underwater), a sale of the home becomes more difficult.

How to Sell A Home Before Foreclosure

A homeowner can sell their home anytime prior to a foreclosure sale. Under most mortgage agreements, a lender is entitled to collect all legal fees and expenses that accrue in the foreclosure process, so a homeowner should keep this in mind, as a delay in selling can cut into the homeowner’s net payoff from the sale.

The ease of selling a home before foreclosure often depends upon whether a foreclosure sale is imminent. If no foreclosure sale is upcoming, a homeowner can simply list their home for sale, pay off the mortgage, and be done with the matter. A homeowner in such a case should strongly consider using a reputable real estate agent and closing attorney, and ensure they understand exactly what their payoff will be from the sale.

When to Speak with An Attorney

If a foreclosure sale is imminent, a homeowner needs to speak with an attorney. In some cases, an attorney may be able to delay a foreclosure sale and provide the homeowner with the time needed to complete the sale, either through negotiations with the lender or a court action.

The success of a lawyer in stopping a foreclosure sale often depends upon the likelihood of the homeowner selling the property. A court will be more inclined to delay a foreclosure sale if the homeowner has taken firm steps towards selling the home, such as hiring a real estate agent and listing the property for sale.

Conclusion

Selling a home to avoid foreclosure is a good option for some homeowners facing foreclosure. If you need assistance with such a matter, contact me for a consultation.

A Landlord’s Guide to the Massachusetts State Sanitary Code

A recent, horrific story from Everett is a good reminder of the importance of knowing (and following) the Massachusetts state sanitary code.

This article discusses how two Everett landlords had fifty-nine code violations in their residential apartments, with over nineteen people living in the home. Two firefighters were tragically burned in a fire last summer resulting from these housing conditions. These landlords, most appropriately, are facing criminal charges for their neglect of this building.

What is the Massachusetts State Sanitary Code?

The Massachusetts state sanitary code sets the minimum standards for housing in the Commonwealth of Massachusetts.  The code covers nearly any matter related to residential housing, including cooking and bathroom facilities, required utilities for residential housing, and safety requirements.

Depending on the town or city, there may be additional, local housing requirements as well. The Massachusetts state sanitary code, however, covers all of the state and is the baseline for a landlord’s responsibility for rental housing.

How is the Massachusetts State Sanitary Code Enforced?

Local jurisdictions generally enforce the state sanitary code through a board of health or inspectional services department. The City of Boston’s Inspectional Services Department (“ISD”) is the most well known of these agencies, and is often called upon when a question arises about a Boston landlord’s non-compliance with the code.

If a tenant files a complaint with one of these agencies, the agency will generally send an inspector to the apartment and cite the landlord for any violations of the code. The landlord is then given a deadline for correcting these violations. Failure to do so can result in penalties and, in a case like this article discusses, possible criminal charges.

Tenants, in certain circumstances, can also enforce the state sanitary code on their own. Massachusetts law allows a tenant to file a petition to enforce the code, if the local agency refuses to take action.

Legal Ramifications for Non-Compliance With the State Sanitary Code

In addition to facing penalties from the the town or city, non-compliance with the state sanitary code also comes with legal ramifications. A landlord who fails to comply with the code may be subject to violation of the implied warranty of habitability, covenant of quiet enjoyment, or the Consumer Protection Law. An official citation from one of these agencies can be compelling proof that the landlord has not complied with these laws.

It is a common misconception that any violation of the state sanitary code is grounds for legal action by a tenant. Minor violations of the code are often not enough to constitute a viable cause of action against a landlord. Nonetheless, landlords need to take care in ensuring that they comply with these detailed regulations.

Practical Implications

It is rare for any landlord to be 100% compliant with the code at any given time, given its many, many regulations. A landlord who learns that they are non-compliant with the state sanitary code needs to act quickly in addressing the problem. Doing so avoids a larger problem developing in the future.

Landlords also need to be aware of Massachusetts’s law on retaliation. A landlord cannot “punish” a tenant who makes a code complaint, through raising the rent, starting an eviction, or doing anything else negative against the tenant.

In many towns and cities, landlords can request their own inspection of a rental unit, to determine what is necessary for complying with the code. This is worth considering prior to renting a unit, or when a landlord has a vacancy. Landlords should also always keep good records on all work done on their rental units.

Conclusion

If you need assistance with a landlord-tenant matter, contact me for a consultation.

Notice to Quit for Massachusetts Evictions

The Supreme Judicial Court issued an important decision this week clarifying the notice to quit requirement for Massachusetts evictions. The decision, Cambridge Street Realty v. Stewart, is included below.

Cambridge Street Realty concerns several legal issues that are of importance to Massachusetts eviction law. Here, I’ll focus on the decision’s discussion of the notice to quit, which is a requirement for nearly all evictions in Massachusetts.

What is a Notice to Quit?

A notice to quit is a legal document informing a tenant that the landlord is terminating their tenancy. This is required for nearly all evictions in Massachusetts and requires the landlord to prove that it served one of these notices to the tenant, prior to starting an eviction. Failure to provide an adequate notice to quit is often grounds for dismissing an eviction case.

The time required in the notice to quit generally depends upon the type of tenancy and the reason for eviction. In Cambridge Street Realty, the tenant was in Section 8 housing, which is federally subsidized and generally has additional, specific requirements for such a notice. Here, the tenant alleged that the notice to quit was defective, but only raised this argument after the eviction case was over.

What Does a Defective Notice Mean For An Eviction Case?

The Court in Cambridge Street Realty needed to determine what impact a defective notice to quit has on an eviction. Here, the tenant argued that a notice to quit is a jurisdictional requirement, meaning that the failure to provide an adequate notice to quit could be raised at any time . . . even after the eviction is over.

The Court rejected this argument. While a notice to quit is a requirement for most evictions, a tenant must adequately raise a defective notice as part of their eviction defense. Failure to do so means that the tenant waived the right to challenge the eviction on these grounds. As such, a tenant is unable to come back to court later and attempt to reverse an eviction, by arguing that the original notice to quit was in error.

Practical Implications

Cambridge Street Realty is an important win for Massachusetts landlords. Making a notice to quit a jurisdictional requirement for evictions would have had precarious implications for landlords. Such an outcome could have conceivably allowed a tenant to void an eviction well after it occurred, leaving possession of a rental apartment in flux.

It would, however, be shortsighted to interpret Cambridge Street Realty as diminishing the notice to quit requirement for Massachusetts evictions. A tenant who does raise the adequacy of a notice to quit in court will be heard on this issue, and will be successful if the landlord provided the tenant with an improper notice. This is one reason, among many, that Massachusetts landlords should consider speaking with a landlord-tenant attorney for assistance with an eviction.

Cambridge-Street-Realty-LLC-v.-Stewart

Zoning Decision Making in Massachusetts

A recent decision from the Appeals Court discusses the important topic of Massachusetts zoning decision making, regarding what a zoning or permitting board is allowed (and not allowed) to consider as part of its decisions.  The case, Clear Channel Outdoor v. Zoning Board of Appeals of Salisbury, is included below.

Background

This case concerned two businesses attempting to erect a digital billboard in Salisbury.  For reasons that are not completely clear in the decision, these applicants needed final approval for a billboard from the state’s Department of Transportation Office of Outdoor Advertising.  Prior to this step, the applicants firs needed approval from the Town of Salisbury’s Zoning Board of Appeals

Per the towns’  local ordinance, a decision for approving these signs required a special permit.

What is a Special Permit?

A special permit is a form of land use decision making, which gives a permitting board authority to approve or deny a particular use of property.  Compared to a variance, the requirements of a special permit are less stringent.  The requirements for a special permit often include a detailed list of criteria that the permitting authority must consider in its decision.

Zoning Decision Making

In this case, the zoning board of appeals decided to grant a special permit to only one of the two applicants.  The problem?  Both applicants qualified for the special permit.  Nonetheless, the board only gave approval to one of the signs.  While not clear from the decision, the reason for this appears to be that, because the state could only pick one of the two applicants in the end, the zoning board of appeals could select between the two billboards, despite both qualifying for the special permit.

Not so fast, ruled the Appeals Court.  The Court held that the board erred because it considered criteria outside the special permit requirements.  Since both qualified for a special permit, the board was wrong to deny one of these applicants the special permit.  Doing so made the board’s decision legally untenable.

Practical Implications

This case is an important reminder that the scope of zoning decision making is not unlimited.  While zoning authorities often have discretion in making these decisions, they do have to stick to the guidelines provided in their municipalities’s zoning ordinances and state law.  Consideration of any other factors runs the risk of the zoning decision being defeated in court.

Conclusion

If you need assistance with a zoning or land use matter, contact me for a consultation.

Clear Channel Outdoor v. Zoning Board of Appeals of Salisbury

Five Things That All Massachusetts Landlords Need to Know

Being a Massachusetts landlord isn’t easy.   There are many, many cases of landlords who have run afoul of the state’s numerous laws regulating landlord conduct; most of which favor the tenant.  Here are five things that  every Massachusetts landlord needs to know.

1. A Landlord is Responsible for Maintaining Rental Property

While this may be obvious to most landlords, it is worth a mention here.  A landlord is responsible for maintaining their rental property, including compliance with the state’s sanitary code.

This is in contrast to commercial real estate, where a landlord is permitted to offer a property “as is.”  Doing this is strictly prohibited for residential property; even if a landlord and tenant signed an agreement that excused a landlord from taking care of a rental property, it would be void and unenforceable at law.

2. Fair Housing Laws Exist  (And Are Enforced)

Both federal and Massachusetts law ban housing discrimination.  Housing discrimination laws are enforced, and come with steep penalties for landlords who violate these provisions.  A Massachusetts landlord needs to know these laws and be aware of the kind of conduct that violates these regulations.  

3. Security Deposits Are Heavily Regulated in Massachusetts

Massachusetts’s security deposit law is among the most complex and confusing laws in the state, filled with traps for the unwary.   Few Massachusetts landlords fully comply with its provisions, and failure to do so can result in treble damages, attorney fees, and costs against a landlord.  Massachusetts landlords should strongly consider not taking a security deposit.  If they do, it is essential that they learn and abide by this law’s detailed requirements. 

4. Good Tenants Are a Good Investment 

What’s the best way to avoid problems with tenants?  Choose good tenants.  The extra time and expense in picking good candidates for rental units are worth its expense, many, many times over. 

5. Evictions Are Costly

Massachusetts law permits a landlord to bring an eviction against a tenant for outstanding rent, and a civil action for damage to a rental unit.  However, even under the best case scenario, it is rare for a landlord to be made completely whole through an eviction proceeding or lawsuit.  The expenses of bringing such a case, and the difficulties of enforcing one of these judgments, are factors that every Massachusetts landlord needs to know.

Conclusion

If you need assistance with a landlord-tenant matter, contact me for a consultation. 

Massachusetts Zoning: What You Need to Know

A recent article about Medford, concerning the challenges of getting past the city’s land use controls, is a good example of the importance of understanding Massachusetts zoning when seeking to develop property.  The article discusses many of the hurdles that can arise when attempting to seek zoning approval from a local municipality.

Overview of Massachusetts Zoning

Zoning are rules and regulations controlling how one uses their property.  The purpose of zoning is to keep order and consistency within municipalities.  Visit a city without zoning controls and you’ll see the reason why such regulations are in place.

Zoning ordinances generally consist of dimensional and use controls for real property.  As discussed in this article, these ordinances are often complex and highly detailed.

Exemptions from Massachusetts Zoning 

Massachusetts zoning often becomes an issue when a property owner is unable to comply with a zoning ordinance.  In such a case, a variance is required.  A variance requires a finding that:

[O]wing to circumstances relating to the soil conditions, shape, or topography of such land or structures and especially affecting such land or structures but not affecting generally the zoning district in which it is located, a literal enforcement of the provisions of the ordinance or by-law would involve substantial hardship, financial or otherwise, to the petitioner or appellant, and that desirable relief may be granted without substantial detriment to the public good and without nullifying or substantially derogating from the intent or purpose of such ordinance or by-law.

Additionally, some uses under a town or city’s zoning ordinance require specific approval by a local zoning permitting authority, known as a special permit.  The requirements for a special permit are not as rigorous as a variance, but a special permit must still be approved by the appropriate town or city board (often the zoning board of appeals or planning board).

In addition to zoning, there are often other regulations concerning real estate development, including environmental, historic preservation, and affordable housing requirements.

Conclusion

Massachusetts zoning requirements can be confusing.  For assistance with this process, consider speaking with an experienced real estate litigation attorney, who can assist with this process. 

Chapter 93A for Landlords and Tenants

The Appeals Court issued an important decision this week about the Consumer Protection Law (commonly known as “Chapter 93A”, in reference to its location in the state law) and its potential application for landlords and tenants.  The decision, Exhibit Source, Inc. v. Wells Avenue Business Center, is included below.

This decision concerns a dispute involving a commercial landlord-tenant relationship.  Nonetheless, this case has important lessons in the context of Chapter 93A for landlords and tenants with residential tenancies.

Overview of Chapter 93A

Chapter 93A prohibits “unfair or deceptive” business practices.  There are two main parts of this law: Section 9, for unfair or deceptive practices between consumers and businesses, and Section 11,  for unfair or deceptive practices between businesses.  While the concept of the law is generally the same for both sections, the requirements for each are slightly different.  Here, I’ll be focusing on Section 9.

“Unfair or deceptive” business practices is purposely intended to be broad, and allows for a wide array of potential applications.  Chapter 93A allows for monetary damages for violation of this law, and possible treble damages if the conduct was willful or knowing.  The law, importantly, allows for attorney fees as well.

For a consumer to bring a Chapter 93A case, they must send the business a demand letter first and allow them thirty days to respond, before filing suit.  This letter is not required if the consumer is bringing a Chapter 93A case as a counterclaim (a lawsuit filed in response to an existing lawsuit).  A letter is also not required if the business does not have an office or assets in Massachusetts.

This demand letter is a critical requirement for a Chapter 93A case.  Failure to comply with this requirement is often grounds for dismissal.

Chapter 93A for Landlords and Tenants

Exhibit Source, Inc. has several important lessons on how Chapter 93A applies to landlords and tenants.

First, Exhibit Source, Inc. is a good example of  Chapter 93A’s breadth.  Many acts, which might not otherwise be unlawful, can fall within the context of Chapter 93A, making it a powerful tool in pursuing a landlord-tenant dispute.

Second, Exhibit Source, Inc. discusses a central goal of this law: encouraging parties to settle their disputes without going to court.  If a party fails to offer a reasonable settlement offer in response to a Chapter 93A claim, the court can (and most likely will) punish them for this.

For this reason, a landlord who receives a Chapter 93A demand letter needs to properly address it.  Failure to do so can lead to much greater problems later on if the matter winds up in court.

Conclusion

If you need assistance with a Chapter 93A matter, contact me for a consultation.

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Getting Possession of a Rental Unit

Getting possession of a rental unit is the primary goal of an eviction case.  A successful eviction case allows a landlord to legally remove the tenant and their possessions from the rental unit.  The formal court order that allows the landlord to do so is known as an execution, and the process of using this court order for getting possession of a rental unit is commonly referred to as levying the execution.

Evictions 101

Eviction (known in Massachusetts as “summary process” cases) is the required, legal proceeding for obtaining possession of property.  Massachusetts (like nearly all states) is a judicial eviction state: one must bring a formal court proceeding to remove a tenant.  Attempting to remove a tenant without a court order, commonly known as a “self help” eviction, is a serious offense.

If the landlord wins the eviction case, or reaches an agreement for the tenant to move, the court will issue an execution for possession.  This is the court order that permits a landlord to physically remove a tenant and their possessions from the rental unit.

Levying the Execution 

 The actual process of getting possession of a rental unit is commonly known as levying the execution.  The tenant must be given 48 hours notice prior to the move out, and service of this notice must be made by a constable or sheriff.  Levying an execution requires the landlord to pay for the moving and storage expenses.  Needless to say, these expenses can add up.

Stay of Execution

A tenant is permitted to request a stay of execution if they believe they need more time to find a new place to live.  The law is written to apply only for tenants involved in a “no-fault” eviction case, where the tenant is not behind on their rent or in violation of a term of their tenancy.  Courts, however, commonly consider stays of execution for all types of tenancies, on the theory that courts have inherent power to manage the eviction process.

Conclusion

Getting possession of a rental unit is not an easy process, and if done incorrectly, can result in enormous costs and expenses that could otherwise be avoided.  For this reason, speak to an experienced landlord-tenant attorney for assistance with such a matter.