The Massachusetts Appeals Court last month issued an important decision about trusts in Massachusetts courts, on whether a lawyer is needed to represent such entities. The full decision, Braxton v. City of Boston, is included below.
Although I am writing this as a blog post about landlord-tenant law, this issue regarding trusts in Massachusetts courts is equally relevant to other areas of law, especially real estate matters.
What is a Trust?
A trust is a property interest held by one person for the benefit of others. Trusts have become a common means of passing property to others without having to do a formal probate proceeding. A trust is generally run by a trustee, who runs it for the beneficiaries.
Trusts are a common means of holding real estate. When placed into a trust, the trust becomes the owner of the property.
Trusts, importantly, can sue, and be sued in Massachusetts courts.
Trusts in Massachusetts Courts: Get a Lawyer!
Braxton concerned a simple question: does a trust need to be represented by a lawyer in court?
Prior cases make it clear that a corporation or limited liability company (“LLC”) need an an attorney for a court proceeding (except small claims). The rationale is that an organized business is a separate legal entity, and not the same as the individuals who own it. Braxton, to the best of my knowledge, is the first case to address whether this rule also applies to a trust.
In Braxton, the Appeals Court ruled that trusts, like businesses, must also be represented by a lawyer in court. This ruling makes sense: a trust, like a business, is a separate legal entity, and it makes little sense to require a business to have an attorney represent it in court, but not a trust.
Limited Exception: Filing a Notice of Appeal
Braxton recognizes a limited exception to this rule: the filing of a notice of appeal. An appeal is a court case that reviews a lower court decision. To do an appeal, one must file a notice of appeal by a fixed deadline after a final decision in a case is reached. For civil matters, this deadline is generally thirty days. (eviction appeals are ten days, and zoning appeals are twenty days).
A notice of appeal must be filed by this deadline; if it is not, the appeal can get dismissed. In Braxton, a trust wished to appeal a court decision, but no longer had a lawyer representing it. Rather than miss the appeal deadline, it went ahead and filed a notice of appeal without an attorney. The question for the Appeals Court was whether this was an adequate notice of appeal.
The Court ruled that in such a scenario, where a trust no longer had an attorney, it was proper for a trustee to file the notice of appeal on its own, with the caveat that the trust needs to find a lawyer ASAP. This ruling applies to business entities as well: a corporate officer can also file a notice of appeal for a corporation or LLC if it does not have a lawyer.
The rationale of this rule, in my opinion, is the need to meet appeal deadlines. It would be unfair to deprive a trust or business with the right to appeal solely because it does not have an attorney by the deadline date.
A trust, like a business entity, needs a lawyer for court proceedings. Although Braxton recognizes an exception to this rule, this exception appears to be a narrow, limited one. Recent cases show that Massachusetts courts are not tolerant of non-lawyers practicing law. The consequences for doing so can be severe.
If you need legal representation for an eviction, contact me for a consultation.
Short term rentals in Massachusetts, like the rest of the country, come with some unique legal challenges. Such rentals, which most commonly occur through AirBnb, are not a traditional landlord-tenant relationship, but still come with various legal obligations.
The law is still developing, so this blog post may (and almost certainly will) need updating in the future.
Short Term Rentals and Zoning
Anyone interested in using their property as a short term rental needs to consult with their local zoning ordinances. Zoning regulates how property in a town or city may be used.
Some towns or cities in Massachusetts have heavily restricted short term rentals. In other places, such as Boston, short term rental owners need to register these units.
If you are considering a short term rental, check with your municipality and determine if any zoning relief is required. Do so before starting a short term rental (or considering buying a such a property). Some zoning relief, such as a variance, can take several months to obtain and is never a guarantee.
Short Term Rental Issues for Residential Tenancies
If you are an owner of residential property in Massachusetts, it’s a good idea to put in an addendum about whether your tenants can use their apartment as a short term rental.
While the law is not settled on this point, there is an argument to be made that, unless explicitly prohibited, short term rentals are not necessarily a violation of a standard lease agreement. Best to make this clear in any rental agreement.
Dealing With a Guest Who Won’t Leave
What happens if a short term rental guest won’t leave? Although not completely settled, it seems unlikely that such a guest would be considered a tenant, which would require a formal eviction proceeding.
In such a scenario, a short term rental owner could simply try to contact the local authorities, who may be willing to remove the holdover guest without a formal court hearing. If legal action becomes necessary, a civil action for trespass is a possibility, with a request for an immediate court order to have the occupant removed from the property.
If you need assistance with a short term rental, contact me for a consultation.
Commercial evictions in Massachusetts concern property that is not used for human habitation, such as a store or office space. Similar to residential property, an owner of commercial property must bring a formal court action (known as “summary process”) for obtaining possession from a tenant.
This is where the similarities between commercial and residential evictions end. Read on for important information that one should know about commercial evictions in Massachusetts.
No Right to Housing Court for a Commercial Eviction Case
Housing Court is a popular forum for resolving residential property disputes in Massachusetts. A residential landlord is permitted to file an eviction in Housing Court, and if an eviction is filed in another court, either party (tenant or landlord) has the right to transfer it to Housing Court.
Housing Court, however, does not have jurisdiction over commercial evictions in Massachusetts. These cases must be brought in District Court or Superior Court.
Commercial Property Is Often Rented “As Is”, Which Limits the Available Defenses in a Commercial Eviction Case
Residential property comes with an implied warranty of habitability. A landlord can only rent property that is fit for human habitation: a responsibility that cannot be waived. Residential property must also comply with the state sanitary code.
Commercial property, in contrast can (and most often does) get rented “as is.” In such a case, the tenant is generally responsible for the care and maintenance of the property. As such, problems arising from conditions in the rental property are limited as defenses to commercial evictions in Massachusetts.
Commercial Leases Often Require the Waiver of a Jury Demand
Tenants in residential evictions have the right to a jury trial. Most commercial evictions require tenants to waive their right to a jury trial if an eviction case ever becomes necessary. As a result, commercial evictions typically move at a much faster pace than residential cases.
Counterclaims Are Not Allowed in Commercial Evictions
Counterclaims are not allowed in commercial evictions. As such, a tenant defending a commercial eviction is much more limited in the potential defenses they can raise in such a proceeding.
Commercial tenants, however, are free to file a separate lawsuit against a landlord and ask that it be consolidated with the eviction.
Massachusetts’s Security Deposit Law Does Not Apply to Commercial Tenancies
As I’ve written, Massachusetts’s security deposit law is a trap for unwary residential landlords, and can result in steep penalties if violated. This law, however, does not apply to commercial tenancies. A commercial landlord can accept a security deposit without having to comply with the numerous requirements of the residential security deposit law.
Massachusetts’s security deposit law often comes up in residential evictions, and is a problem if the landlord has not followed this law. For commercial evictions, however, this law does not apply.
That’s not to say that a commercial landlord can do whatever they want with a security deposit. Chapter 93A, which prohibits unfair and deceptive business practices, can apply if a commercial landlord acts unreasonably with a security deposit.
If you need assistance with commercial evictions in Massachusetts, contact me for a consultation.
The Massachusetts Property Law Blog is proud to have Attorney Joseph N. Schneidermanguest blog on upcoming zoning decisions from the Massachusetts Appeals Court. Attorney Schneiderman is an appellate attorney licensed in Massachusetts and Connecticut and may be contacted at email@example.com.
Verizon sought to build a cellular tower in Dudley. On August 22, 2017, Verizon successfully obtained a special permit from the Dudley Planning Board. On September 11, 2017, the Pecynas, as self-represented abutters, timely appealed the special permit to the Worcester Superior Court but did not join Verizon as a party. Compare G.L. c. 40A, §17 (Aggrieved party has 20 days to appeal.) Curiously, the Town Clerk issued a certificate of no appeal the next week. As ten months of litigation elapsed, Verizon built the tower.
Later represented by counsel, the Pecynas unsuccessfully sought an injunction to demolish the tower and to belatedly join Verizon as a party. A Superior Court judge denied both motions and dismissed their appeal, reasoning that: (1) because the Town Clerk never received the notice of appeal, the appeal was untimely and (2) belatedly joining Verizon would be prejudicial because Verizon built the tower despite the faulty notice. The Pecynas appealed to the Appeals Court. Curiously, the Town of Dudley did not file a brief-although Verizon appeared and argued as amicus curiae.
The Pecynas asserted that they notified the town orally that they intended to challenge and appeal the special permit. The Pecynas further asserted that they attempted to file the appeal but the Town Clerk refused to accept it until Day 21-and apparently wanted discovery on that point. By contrast, Verizon asserted that only actual notice suffices, citing much of the caselaw leading to Hickey. Verizon also asserted that the Pecynas forfeited or waived their right to seek discovery on the issue notice by filing a written motion for discovery.
Like Hickey, two compelling doctrines are clashing here. On the one hand, courts demand and enforce strict compliance with the timing and notice provisions of Section 17. Those provisions ensure that Verizon has no encumbrances to building its tower, or conversely, so the Pecynas know about and can challenge it.
If the Pecynas have truly preserved their right to seek discovery on notice, a good intermediate solution is for the Appeals Court to remand the case for a hearing on that point-and possibly even retain jurisdiction. The trial judge could weigh whether the prejudice to the Pecynas of having the town thwart their ability to appeal outweighs the prejudice to Verizon of relying on a faulty certificate to build a tower.
Nimchik (Lemire, Singh, and Wendlandt, J.J.)
This case is a challenge to “spot zoning”, i.e., singling out land in a particular area without regard to the general objectives of zoning. More specifically, a building supply company successfully applied to the Chicopee City Council to rezone parcels residential land to business land to facilitate the construction of a garage. This residential neighborhood is west of Route 33 near Westover Air Force Base. That part of Route 33 is, to quote Homer J. Simpson, a “miracle mile where value wears a neon sombrero and there’s not a single church nor cultural institution to offend the eye.” The abutters sued in the Western Housing Court, asserting that the rezoning amounted to unlawful spot zoning. A Judge granted summary judgment for the business and city.
The abutters press on appeal that constructing the large garage and subsequent large truck traffic would be detrimental to the residential neighborhood and only benefits the building supplier and is not a public benefit for zoning. The abutters further contend that the city council’s voting practices to rezone the land were unlawful because there were not enough votes supporting the rezone. Finally, the abutters contend that the judge needed to make express findings of fact resolving the appeal as the judge allowed the motion in a handwritten margin endorsement.
The city and the supplier counter that much of the abutting land is already zoned for business and that the residents will not suffer any detriment. The city and the supplier further argue that the abutters have forfeited or waived any issue on the voting practices by not expressly raising the issue in opposition to summary judgment. Much of the oral arguments focused on this point; Justice Lemire asked counsel for the abutters three different times about how and where this issue appeared below.
Spot zoning, i.e.,, that a municipality has singled out land without regard for the public welfare and purposes of zoning is certainly a serious issue since the Zoning Act requires uniformity-and amounts to a constitutional violation. But, the abutters are carrying a heavy burden to prove not only that there is spot zoning but that there should be a trial. the abutters so See e.g. Van Renselaar v. City of Springfield, 58 Mass. App. Ct. 104, 108 (2003). The abutters’ brief hints that, perhaps, Chicopee could have and should have granted a variance because of unusual land conditions here-indeed, one parcel is triangular. But if the city and the supplier are right about the neighboring land, the motion judge probably correctly resolved the issue at summary judgment.
Johnson (Milkey, Sullivan, and Ditkoff, J.J.)
An ice cream stand owner on Lake Avenue along Lake Quinsingamond in Worcester sought to expand into a full borne fast food restaurant. He sought a special permit and variance for relief from the required parking spaces the Worcester Zoning Code require. Abutters who own property on Lake Avenue (also then self-represented) sued and the Superior Court granted summary judgment for the city and property owner.
On appeal, the abutters assert that by adopting the findings of the zoning board verbatim as their facts in support of summary judgment, which were unsupported, summary judgment was inappropriate. The abutters specifically emphasize that they put forward evidence that the expansion would increase noise, traffic and there is nothing unique about the parcel topographically to justify the variance. Rather, the Board granted the variance because it would be substantially beneficial. The abutters have also pressed that summary judgment was inappropriate in light of how the zoning appeal process is a de novo factual review.
The City counters that the abutters did not oppose their statement of facts. This raised concerns at argument-Justices Sullivan and Ditkoff alike pressed counsel for the city on whether or not there was not factual support. This led to the City’s point that the abutters have waived or forfeited this issue on appeal-and it was too late to challenge that in a motion for reconsideration. Justice Milkey contended that responses to interrogatories were part of the record-and questioned whether or not that fact alone would create a genuine issue of fact. The City continued to harp that the pro se abutters waived it-which drew serious doubt from Justices Milkey and Sullivan. Indeed, Justice Sullivan quite emphatically asked counsel for the city, “Is the city troubled by the notion of making a waiver argument against a pro se taxpayer where the problem was created by the manner in which the city presented its case?”
The verbatim adoption of one party’s statement of facts is not error in and of itself. See e.g. Cormier v. Carty, 381 Mass. 324 (1981) But, those facts are subject to challenge for clear error and reviewing courts will carefully scrutinize those findings. Id. This is also just as much of an issue in zoning cases-the verbatim articulation of the variance standards without factual support for the variance is error. Indeed, a board must make detailed findings to justify a variance. See e.g. Wendy’s Hamburgers v. Board of Appeal of Billerica, 454 Mass. 374, 387 (2009)
If the city did indeed make shoddy findings that do not justify the variance and indeed there is no basis for it, summary judgment is completely inappropriate and a trial should occur. The only question is whether or not the abutters waived or forfeited the issue-and even that is not crystal clear. If the abutters did indeed proffer responses, that should suffice as counter evidence to defeat summary judgment.
All three appeals could rise or fall on the issue of waiver/forfeiture. The waiver/forfeiture rule means that a party cannot raise a legal issue for the first time on appeal that they did not raise in the lower court. To quote Justice John Greaney, the waiver/forfeiture rule exists because “…there is something unseemly about telling a lower court it was wrong when it never was presented with the opportunity to be right.” Commonwealth v. Alphas, 430 Mass. 8, 23 (1999). In criminal cases, the rule is relaxed. But in civil cases, including zoning cases, the rule is hard and harsh-even if the parties are self-represented. As earlier, if the Pecynas did not put the lower court on notice of the Town Clerk gaming the system, their appeal is or may be doomed.
Similarly, in Nimchik, although the validity of the vote to rezone is potentially a serious one, if the abutters did not properly preserve the issue, it’s not fair game on appeal-and neither the lower court nor the appellate court will comb the record to identify it. If there is a question about preservation, lay it out at the outset-or write a compelling a reply brief pointing out how the parties raised and addressed the issue below. Or better yet, avoid the issue of preservation by bringing in appellate counsel to frame and hone the legal issues and write a compelling motion or opposition.
However, in Johnson, if the parties did all they thought they could do to put the lower court on notice of some issue of fact, waiver/forfeiture is completely inappropriate. Indeed, Justice Sullivan made an important point during oral argument that it would not be fair to hold the rule against a self-represented party who tried to put the lower court on notice of an issue that the city did not.
Nimchik and Johnson offer important opportunities to clarify the application of summary judgment to zoning cases. Summary judgment is appropriate when a party’s evidence demonstrates there is no genuine issue of material fact and one party deserves judgment as a matter of law. However, zoning appeals are also de novo proceedings-that is, a court finds completely new facts without regard to how the zoning board found facts. Jury trials are available in Superior Court zoning appeals.
However, nearly 40 years ago, the Supreme Judicial Court specifically endorsed and recognized summary judgment as an appropriate remedy in zoning appeals, even though zoning appeals could be quite “factually complex.”. Framingham Clinic v. Zoning Board of Appeals of Framingham, 382 Mass. 283, 299 (1981). Zoning boards often (tend to) assert that their decisions and findings deserve substantial deference-including on appeals from summary judgments in their favor. This is despite how appellate courts review summary judgment decisions de novo-without deference to the lower court judge.
This tangle also arises in practice. As noted earlier, the abutters/plaintiffs asserted that they wanted express factual findings in both Nimchik and Johnson. But motion judges do not find facts on summary judgment, motion judges determine whether there is some genuine issue of material fact. An express articulation of facts would be better suited for resolving a case on cross-motions for summary judgment to explain why there are no issues of fact and one party or the other is correct as a matter of law. Ideally, the Appeals Court will clarify this tangle and provide substantive guidance to the practicing bar about how to frame and pursue these motions.
Joseph N. Schneiderman has an appellate practice with a particular interest in zoning since he took on the Boston Zoning Board in the Appeals Court. Joe also speaks to the Hampden County Bar AssociatIon’s Real Estate Section about the latest appellate developments. Joe gratefully thanks Adam for another opportunity to blog!
Choosing a landlord attorney can be a critical decision for your landlord-tenant dispute. Among the many things to keep in mind is how your attorney will attempt to resolve your case as affordably as possible.
You may be wondering why this blog post includes a picture of a table above. It is not simply because I built it myself (although I am proud of it!). Rather, it demonstrates an important part of my approach when representing all clients, especially landlords.
When I’m not lawyering, I enjoy woodworking. I’ve built a great workshop and have constructed some good pieces of furniture, including the table above. This table is made from a piece of California redwood that my wife and I purchased during our last vacation. With some power tools and a lot of elbow grease, I turned it into a great addition for our home.
Not everything I make is of this quality. Below is a table that I made as a stand for my scroll saw:
It doesn’t have the bells and whistles as my other project for a good reason: it stays in my workshop, and not in my living room. I could have designed it to look like the redwood table above, but I’d rather spend my time and money on other projects.
So, what does this have to do with choosing a landlord attorney?
Not every part of the legal process requires the construction of a perfect piece of furniture. Sometimes, a basic table will do. In other words, although one can spend enormous time and money in a legal proceeding, it isn’t always necessary.
Landlord-tenant disputes can get expensive . . . very quickly. My goal in these cases (and for my otherpractice areas) is to make sure that I’m spending my client’s money wisely. I’ve seen some attorneys spend an enormous amount of time on matters that could otherwise be avoided. I have also seen attorneys attempt to litigate cases where the end goal just isn’t worth it for their client.
Of course, some expenses can’t be avoided. My workshop table above didn’t need a polyurethane finish, but it certainly required the right fasteners to ensure that it doesn’t fall apart. Having a solid background in landlord-tenant law is the key to knowing what is needed (and what isn’t) in a landlord-tenant dispute.
If you need assistance with a landlord-tenant matter, contact me for a consultation.
The Massachusetts Appeals Court issued an important decision last month on who can appeal a zoning decision. This decision clarifies that overcrowding concerns related to zoning approval are adequate grounds for giving a party a right to appeal one of these decisions. The full decision, Murchison v. Zoning Board of Appeals of Sherborn, is included below.
Zoning are local regulations on the use of real property. These ordinances generally regulate the size, dimension, and uses of property, and are enacted by individual towns and cities across Massachusetts.
Often, certain desired uses of property require specific approval from the local municipality, such as a special permit or site plan review. A property owner, in most cases, is also entitled to apply for an exception to a zoning regulation, known as a variance.
Zoning decisions are generally made by a town or city’s zoning board of appeals or planning board. A party who is not happy with one of these decisions has the option of pursuing an appeal of such a decision in court.
Who Can Appeal a Zoning Decision in Massachusetts?
Not anyone can appeal a zoning decision. The law only allows a “person aggrieved” to bring an appeal. This is a critical, threshold requirement that must be satisfied for any zoning appeal.
There is a practical reason for this requirement. It would be unfair to allow a person who has no stake in the zoning outcome to get involved in one of these decisions. This requirement is similar to nearly every other civil lawsuit: one must show they have a “dog in the fight” to pursue a legal matter.
How Can Someone Show They Are a “Person Aggrieved”?
Arguably the most common basis for showing standing is a density concern (also known as overcrowding). The claimed harm is that the zoning relief will result in the construction of a building (or a use of land) that is larger or closer than what the zoning regulations intend for.
In Murchinson, the Appeals Court needed to determine the extent to which a party needed to show a density concern for the purposes of establishing standing. In this case, the claimant bringing the zoning appeal lived across the street from a proposed development, which was seeking zoning approval to construct a development without the town’s minimum lot width.
Minimum lot width is a density zoning regulation, aimed at preventing homes and building from being constructed too close to each other. In Murchinson, the proposed development would have only slightly violated this regulation. Based on this, the zoning appeal was dismissed, on the grounds that any alleged harm of overcrowding was de minimis (minor).
Murchison reversed this holding, by ruling the following:
There is no platonic ideal of overcrowding against which the plaintiffs’ claim is to be measured. Although the distance between the houses might not amount to overcrowding in an urban area . . . cities and towns are free to make legislative judgments about what level of density constitutes harm in various zoning districts and to codify those judgments in bylaws. It does not matter whether we, or a trial judge, or the defendants, or their counsel, would consider the district “overcrowded.” What matters is what the town has determined.
Prior zoning decisions suggest that not every concern about overcrowding can constitute standing for a zoning appeal. If the potential harm from the zoning relief is minor, previous cases seem to imply that minor harm, alone, is not enough for a zoning appeal.
Murchison, in my opinion, leaves that decision entirely up to the town or city’s zoning ordinance. If a town or city regulates density in any way, any zoning decision that results in a change to such density is grounds for standing.
Of course, simply having standing is not enough to overturn a zoning decision. Standing simply allows a person to have their day in court on such a matter.
If you need assistance with a zoning matter, contact me for a consultation.
Fall has been busy for me, but in a good way: I’m pleased to write that I won a landlord-tenant jury trial last week in the Housing Court! The case has some important implications for those involved in landlord-tenant disputes.
I represented two tenants who had a terrible experience with their prior landlord. This landlord–who is the owner of many large apartment complexes–routinely failed to address important safety and health complaints in my clients’ apartment. The most egregious conduct by this landlord was it’s failure to return my clients’ security deposit after they moved out of the apartment. My clients repeatedly contacted the landlord and requested the deposit’s return, which the landlord continuously ignored.
My clients, importantly, were never looking to start a lawsuit
on this matter–they would have been fine if the landlord simply returned their
money. By refusing to do so, however,
the landlord forced this matter into court, resulting in damages that could
have easily been avoided in the first place.
Lessons for Landlord-Tenant Disputes
This case has important lessons that landlords and tenants
should keep in mind when addressing landlord-tenant disputes.
Keep Good Records: Keeping good records is critical for any landlord-tenant dispute. I would guess that over 90% of the problems that landlords run into come from not having proper documentation for their tenancies, such as all efforts that the landlord took to maintain the rental unit. This, in my opinion, was a critical reason why the jury found in favor of my clients: the landlord had nothing to support its alleged defenses to my clients’ claims.
Be Reasonable About Settling a Landlord-Tenant Dispute: No one is perfect, and landlords and tenants can easily make a mistake that subjects them to legal liability. If this is the case, the landlord or tenant should settle sooner than later. In this case, my clients made a settlement offer that was lower than the amount of money that the jury awarded to them! If the landlord had taken this offer, they would have saved a lot of time and money.
I couldn’t be happier about the outcome of this case. For my clients, this case wasn’t simply about money; it was about principle. As an attorney who represents landlords and tenants, I often believe that Massachusetts law can favor tenants at the expense of landlords. In this case, I believe that these laws served their intended purpose.
I don’t want to imply that every tenant deserves this outcome, or that every landlord is in the wrong. I represent many landlords as well, and can attest that the overwhelming majority attempt to do the right thing. But in this case, I’m pleased that this landlord was held accountable.
If you need assistance with a landlord-tenant dispute, contact me for a consultation.
Massachusetts businesses in eviction proceedings have a unique requirement: they must be represented by a licensed attorney. This is true not just for eviction cases, but all civil actions (with the exception of small claims). Read on about this important topic.
Evictions for Massachusetts Businesses
A Massachusetts landlord is only entitled to represent themselves in an eviction if the tenancy is in their individual capacity. This is common for many small landlords, who own rental property individually, in their own name. These landlords are permitted to represent themselves in an eviction case.
If, however, the landlord is a business entity, such as a corporation or a limited liability company (“LLC”), the landlord must be represented by an attorney. This comes from a Supreme Judicial Court decision, which holds that such business entities cannot represent themselves in court. Most courts take the position that this requirement also applies to landlords organized as trusts.
Another recent Supreme Judicial Court case, concerning who is entitled to bring an eviction, requires trial courts to take a careful look at the parties before them. If a corporation or LLC is appearing in an eviction case without an attorney, there is a strong chance that the court will dismiss the proceeding. For this reason, Massachusetts businesses should never take a chance of not having a lawyer in court. If there is any doubt about whether an attorney is needed for your eviction, speak to a lawyer before pursuing such a claim.
Landlords who are not business entities can represent themselves in court. Doing so, however, is not always a good idea. Massachusetts landlord-tenant law is complex, and if a matter proceeds to trial, most non-lawyers are unable to handle the procedural requirements for litigating a case. For this reason, hiring a competent attorney is a good idea.
If you need assistance with a Massachusetts eviction, contact me for a consultation.
There is old saying for those living in New England: if you don’t like the weather, wait a few minutes. The same can be said about Massachusetts foreclosure law: if you don’t like a particular decision . . . wait a few minutes.
This is evident by a recent decision from the First Circuit Court of Appeals, that requests the Supreme Judicial Court to clarify the requirements for a foreclosure default notice, commonly known as “paragraph 22.” This comes from the Thompson decision, a ruling in favor of homeowners against a foreclosure sale that has been widely criticized by many in the real estate field. The full decision is below.
Background on Paragraph 22
The vast majority of homeowners in the United States have a mortgage agreement that uses a standard form. This standard form mortgage comes from Fannie Mae and Freddie Mac, and requires a lender to send a default notice prior to foreclosure. This requirement is generally found in paragraph 22 of this mortgage agreement.
This notice, among other things, requires specific disclosures to a homeowner prior to the start of foreclosure and provides the homeowner thirty days to pay the outstanding loan balance to avoid foreclosure.
In 2015, in a landmark court decision, the Supreme Judicial Court ruled in Pinti v. Emigrant Mortgage that lenders need to strictly comply with this foreclosure default notice requirement. Failure to include or correctly state one of the required disclosures in these notices can be grounds for setting aside a foreclosure.
The Thompson Decision
Earlier this year, the U.S. Court of Appeals for the First Circuit issued a decision applying the Pinti decision to an error in one of these paragraph 22 notices. In this decision, Thompson v. JPMorgan Chase Bank, the First Circuit ruled that the notice was defective because it mislead the borrower about when he could pay his outstanding loan balance to avoid foreclosure.
Importantly, the homeowner in Thompson never suffered any harm from this defect in his foreclosure default notice. The First Circuit suggested that any potential harm to a borrower in one of these notices was a violation of paragraph 22 and grounds for challenging a foreclosure’s validity.
Not surprisingly, many involved with Massachusetts real estate are concerned with the ramifications of this decision, and its impact on the foreclosure process. I, personally, have received many inquires about the ramifications of this decision; a sign that this area of Massachusetts foreclosure law remains in flux.
SJC to Review Requirements for a Foreclosure Default Notice
Thompson, importantly, was decided by a federal appeals court. The reason for this is that the case was brought into federal court from state court, which the law allows in certain circumstances.
The bank in Thompson asked for a reconsideration of this decision, which is rarely granted in appeals. The First Circuit declined to reconsider this decision, but instead, has asked the Supreme Judicial Court to clarify the law on foreclosure default notices and paragraph 22.
I, personally, have never heard of an appellate court doing this after issuing a decision. This is a good example of how Massachusetts foreclosure law continues to be an evolving area of law.
If you need assistance with a foreclosure matter, contact me for a consultation.