Fence Disputes: 5 Things Every Massachusetts Property Owner Should Know

I recently settled a case involving a fence dispute, which occurred between two neighbors who weren’t getting along. Fence disputes, believe it or not, are one of the most common types of boundary disputes, and most often arise when a property owner seeks to erect or take down an existing fence.

This case reminded me of some important advice that every Massachusetts property owner should know about these matters.

Location Matters

It may sound obvious, but it is worth mentioning: a property owner can only erect a fence on their property. Placing a fence on your neighbor’s property can quickly lead to a fence dispute and, in the worst case scenario, a court order mandating the immediate removal of the fence.

To avoid this, ensure that your fence is on your property. A plot plan or survey can be helpful in determining your boundary lines.

Fences Can Lead to Adverse Possession Claims

A claim of adverse possession occurs when a person uses property that is not theirs for an uninterrupted period of twenty years, without the record title owner’s permission. Adverse possession follows the rule of “use it or loose it.” If someone else is using your property, you can run the risk of it eventually belonging to someone else.

One of the requirements for adverse possession is exclusive use: showing that the property was within the exclusive use and control of the other party. Massachusetts courts have held that the placement of a fence is a strong example of an adverse possession claim because it puts the property owner on notice that someone else is using their property. For example, if a homeowner erects a fence which encroaches several feet of their neighbor’s yard, and makes use of this property as their own for twenty years, a claim of adverse possession may arise.

For this reason, property owners need to be aware of potential adverse possession claims when erecting fences.

Exercise Care When Removing Trees

Building or taking down a fence often involves the removal of trees and other vegetation. If this applies to you, proceed with caution. Massachusetts law imposes steep penalties for willfully cutting down someone else’s trees:

A person who without license willfully cuts down, carries away, girdles or otherwise destroys trees, timber, wood or underwood on the land of another shall be liable to the owner in tort for three times the amount of the damages assessed therefor; but if it is found that the defendant had good reason to believe that the land on which the trespass was committed was his own or that he was otherwise lawfully authorized to do the acts complained of, he shall be liable for single damages only.

Boundary Disputes Can Become Contentious Quickly

When it comes to land, even the smallest boundary dispute can become a source of friction between land owners. This is an important factor to keep in mind when dealing with a fence dispute. An overly aggressive approach to one of these matters can inflame tempers and lead to unnecessary legal expenses and time in court. For this reason, always try to find an amicable resolution to one of these matters first.

Consult An Attorney If All Else Fails

Of course, some fence disputes (like any other legal matter) can not always be resolved on their own. If you find yourself in such a scenario, strongly consider speaking to an experienced real estate litigation attorney.

Who Can Foreclose in Massachusetts?

The Appeals Court issued a decision this week concerning an important topic for Massachusetts foreclosure law: who can foreclose in Massachusetts? The decision, Mitchell v. U.S. Bank National Association, is included below.

Background

In this case, two homeowners challenged the validity of a foreclosure sale against their home. As is the case with many residential mortgages in the United States, these homeowners had a securitized mortgage loan.

Securitization is a process by which mortgage loans are put together into a trust, with shares of this trust (known as “certificates”) sold to investors. A trustee (often U.S. Bank National Association or Deutsche Bank) manages these trusts, with a loan servicer responsible for the day-to-day handling of the loan responsibilities, such as collecting loan payments and handling customer inquires.

Who Can Foreclose in Massachusetts?

The homeowners in Mitchell argued that U.S. Bank was not entitled to foreclose their home because this entity was not entitled to enforce their mortgage loan. Rather, they argued, the certificate holders were the only persons entitled to do so, and in turn, foreclose the home.

The Appeals Court rejected this argument. Because U.S. Bank was entitled to receive payments from the mortgage loan, it was therefore entitled to foreclose. The Appeals Court did not agree that, because these payments were for the benefit of the certificate holders, only these investors could foreclose.

Practical Implications

Mitchell reaffirms that attempts to challenge foreclosures on the basis of the loan securitization process is an uphill battle. Massachusetts courts have almost always rejected these arguments, with Mitchell being the most recent example.

That’s not to say that anyone can foreclose in Massachusetts. A valid foreclosure requires that the foreclosing entity hold the mortgage and promissory note, and comply with pre-foreclosure notice requirements. Mitchell, however, again declined to extend the scope of these foreclosure requirements to include the underlining loan securitization process.

Conclusion

If you need assistance with a foreclosure matter, contact me for a consultation.

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Recent First Circuit Decision on Required Massachusetts Foreclosure Notice

The First Circuit Court of Appeals issued a noteworthy decision earlier this month about one of the required notices for a Massachusetts foreclosure. The decision, Thompson v. JPMorgan Chase Bank, N.A., is included below.

Foreclosure Notice Requirement – “Paragraph 22”

This case concerns an interpretation of a foreclosure notice requirement commonly referred to as “paragraph 22.” This requirement is found in paragraph 22 of the standard mortgage agreement used in nearly every residential mortgage in the United States. Paragraph 22 requires that, prior to foreclosure, the mortgagee provide the borrower with several disclosures, including their right to cure the loan default and the right to reinstate the loan after acceleration, which was the subject of this appeal.

An acceleration of a loan is a demand by a lender to pay the entire balance of a loan prior to foreclosure. This generally comes after the borrower has defaulted on the loan, and is a sign that a foreclosure sale is forthcoming.

Strict Compliance for Paragraph 22 Notices

In Massachusetts, a lender is required to strictly comply with the paragraph 22 notice requirement. This comes from Pinti v. Emigrant Mortgage, a landmark 2015 Supreme Judicial Court decision. In Pinti, a minor mistake with one of the paragraph 22 notice provisions was grounds for invalidating a foreclosure sale.

Here, the First Circuit held that a paragraph 22 notice sent to a borrower made the foreclosure sale void because it misrepresented the borrower’s rights. The notice told the borrower that he could reinstate his loan after acceleration . . . anytime before the foreclosure was to occur.

The problem? The borrower’s mortgage required this reinstatement to occur five days before a foreclosure sale. The First Circuit held that, because the paragraph 22 notice was misleading, it made the underlining foreclosure sale invalid.

Practical Implications

A critical part of Thompson v. JPMorgan Chase Bank, N.A is that the borrower did not need to show prejudice from this error in the paragraph 22 notice. There was no allegation that the borrower was able to bring his loan current, waited until the day of the foreclosure sale to pay this money, and was denied due to this five-day deadline in his mortgage. This is keeping with an important part of Massachusetts foreclosure law: a foreclosure can be unlawful from an error in the foreclosure process even if the borrower was never harmed from it.

Thompson is an important reminder of the importance of a proper foreclosure notice in Massachusetts. Even the smallest errors in the foreclosure process can be viable grounds for defending against foreclosure.

Conclusion

If you need assistance with foreclosure defense, contact me for a consultation.

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Massachusetts Security Deposits 101

This Wednesday, I will be moderating a panel at the Boston Bar Association on Massachusetts’s security deposit law. Most people, especially landlords, are often surprised at how something as mundane as a security deposit law can be so complex and confusing.

Those who ignore this law, however, do so at their peril. The law is incredibly detailed and complex, and a trap for the unwary.

Overview of Security Deposits

The Massachusetts security deposit law regulates the receipt, holding, and return of these funds from a tenant. A central theme of this law is that these funds are the tenant’s money. By holding this money from the tenant, a landlord is required to exercise extreme care with all aspects of these funds.

For these reasons, security deposits are risky, given the many requirements of this law and, as discussed below, the penalties for noncompliance.

Security Deposit Violations

Security deposit violations can be severe. Failure to comply with the law can result in treble damages, court costs, and attorney fees. This means that even a small security deposit can result in an enormous judgment against a landlord if the landlord violates this law.

It is a common misconception that every violation of the security deposit law results in triple damages against a landlord. A recent court decision clarified that not all violations result in treble damages. Rather, some violations simply entitle the tenant to the immediate return of the deposit, while others will be grounds for full damages against a landlord.

Conclusion

If you need assistance with a security deposit matter, contact me for a consultation.

Attorney Sherwin to Argue Real Estate Contract Case Before Massachusetts Appeals Court

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This Tuesday, I’ll be before the Appeals Court on a case concerning a real estate contract. I won a trial several years ago involving a contract dispute, and the other side has appealed. This is an interesting case that concerns some important topics on real estate contracts.

Appeals Process

In an appeal, a party is asking a reviewing court (known as an appellate court) to determine if the trial court made any errors in law. It is generally not enough to simply argue that the lower court made the wrong decision in the case. Rather, a successful appeal requires a showing that the lower court misapplied the law.

No new evidence is introduced in an appeal. The record is limited to the testimony and exhibits from trial. Each side is permitted to file a written argument to the court, known as a brief, and argue their side of the case to the court, known as an oral argument.

Lessons for Real Estate Contracts

This appeal concerns a couple of important topics relevant for real estate contracts.

Oral Agreements To Sell Property

Most people are familiar with the requirement that a sale of property needs to be in writing to be enforceable, known as the statute of frauds. It is a common misconception, however, that oral agreements for the sale of property can never be enforced. In certain circumstances, the law will not allow a party to avoid enforcement of an oral contract for real estate.

In this appeal, the contract was oral. However, the parties to this agreement changed their circumstances in reliance of this oral agreement, and partially performed it: a recognized exception to the statute of fraud.

This is a critical lesson for anyone involved in a real estate contract: do not assume that, because an agreement may be oral, there are no repercussions for failing to perform. As with any legal agreement, one should speak with an experienced attorney and proceed with caution.

Getting Out of a Contract

This appeal also concerns another important part of contract law: when can someone “undo” a contract? The “undoing” of a contract, known as a rescission, generally requires there to be a complete abrogation of the agreement. In other words, if a party really fails to do what they are supposed to, the other party may have the option of asking the court to cancel the contract. My appeal is primarily about this issue: whether or not one of the parties did their required obligations under the contract.

It is important to understand that the right to rescind an agreement is a high burden to meet. Courts will not allow rescission when a party has merely breached such an agreement, generally, it must be shown that an “utter failure of consideration” occurred.

This is important for anyone entering into a real estate contract agreement to know. Getting out of such an agreement is no guarantee, and the law provides powerful remedies for enforcing these agreements.

Conclusion

If you need assistance with a real estate contract matter, contact me for a consultation.

Forum Selection Clauses in Massachusetts

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The Massachusetts Appeals Court issued an important decision last week concerning forum selection clauses in Massachusetts. While the case didn’t concern a real estate matter, these clauses are often found in real estate contracts, making it relevant here. The case, Empire Loan of Stoughton v. Stanley Convergent Security Solutions, Inc., is included below.

Case Overview

This case concerned a breach of contract dispute between two businesses: a Massachusetts corporation and a Delaware corporation doing business in Massachusetts. These corporations entered into a contract for the installation of security systems, and a lawsuit arose after one of the businesses alleged that the other failed to properly maintain and monitor one of its security systems. One of these businesses sued the other in a Massachusetts court, and the court dismissed the lawsuit due to a forum selection clause in the parties’ contract.

What is a Forum Selection Clause?

A forum selection clause allows parties in a contract to pick the location where any lawsuits arising out of the contract should be heard. Here, the parties agreed to Connecticut. Because the business sued in Massachusetts, the court dismissed the case.

Empire Loan discusses the standard for determining whether one of these clauses is enforceable. The party in favor of the clause must show the clause was reasonably communicated and accepted.  The party opposed to the clause must show it is unfair and unreasonable.

The Appeals Court found that this forum selection clause was permissible largely because the opponent of the clause did not dispute reading the entire contract and agreeing to all of its terms. Moreover, the record supported that the parties negotiated the entire agreement.

Practical Implications

Empire Loan has important implications for anyone entering into a contract . . . especially in real estate. Forum selection clauses can (and will) be enforceable if they are fair and reasonable. This decision suggests that courts will not have too much sympathy for parties who freely and willingly sign agreements of these type. Simply put, a party who signs a contract with a forum selection clause can be stuck with it.

That’s not to say that every one of these clauses are enforceable. A party entering into one of these contracts, however, should give consideration to the implications of one of these clauses before signing.

Conclusion

If you need assistance with a real estate contract dispute, contact me for a consultation.

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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.

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