3 Things Massachusetts Landlords Can Do To Stay Out of Trouble

Being a Massachusetts landlord isn’t easy. Our state has extensive regulations on the landlord-tenant relationship, and many laws in favor of tenants. Here, I want to share three tips for Massachusetts landlords that can help avoid legal problems down the road.

1.Choose Good Tenants

The selection of tenants is one of, if not the most, important part of the landlord-tenant process. Good tenants pay their rent, respect rental property, and are a pleasure to deal with. Bad tenants are just the opposite.

The important reason for choosing good tenants is to avoid the eviction process, at all costs. Evictions in Massachusetts are expensive and often favor the tenant. Rarely do Massachusetts landlords ever come out completely whole at the end of the process. Picking good tenants is the best way to avoid an eviction from happening in the first place.

2.Keep Great Records

As a landlord, you are running a business. You should treat it like that by keeping extensive, detailed records on everything about your rental properties. This includes the lease and other paperwork signed at the start of the tenancy, a ledger of all rent received from your tenants, and any repairs or maintenance you perform on the property.

Massachusetts landlords who keep good records save themselves enormous time, money, and liability if a dispute ever arises with a tenant. For example, if a tenant complains that a landlord never maintained their property, detailed records on a landlord’s maintenance and repairs can quickly refute such a claim.

3.Don’t Take a Security Deposit!

As I’ve written before, Massachusetts’s security deposit law is long, detailed, and nearly impossible to fully comply with. Rarely have I seen Massachusetts landlords follow each provision of this law, and the failure to do so can result in huge penalties.

What’s the best way to avoid this? Don’t take a security deposit in the first place.

Conclusion

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

Attorney Sherwin To File Adverse Possession Case for Washington D.C. Republicans, Democrats

April is going to be a busy month for me. In a rare case of bipartisanship, a group of Republican and Democratic Senators (who have been in Washington D.C. for over twenty years) have hired me to file an adverse possession lawsuit for them, seeking permanent ownership of Capitol Hill.

Adverse possession is a legal claim where a party can obtain someone else’s property without their possession if they use it as their own for a period of time (twenty years in Massachusetts). A critical requirement is that such use must be hostile: against the permission of the lawful owner.

These politicians have a great case. By staying in Washington for so long, without doing anything for their constituents, there is a good case that these politicians’ use of Capitol Hill for the past twenty years has been hostile.

“Getting reelected to Congress is a lot of work,” said one Republican Senator, who asked to remain anonymous. “It is much easier to hire Attorney Sherwin, who we are confident can make a compelling case that we haven’t done anything for the last twenty years.”

” I rarely agree with Republicans,” said a Democratic Senator, who also asked to remain anonymous.” “But, if there is one thing that all D.C. politicians agree on, it’s that we have a right to stay here forever.”

As a real estate litigator who has tried successful adverse possession cases in the past, I’m looking forward to this case. More information about this matter can be found here.

Preventing Foreclosure in Massachusetts: 3 Success Stories

Challenging a Foreclosure

Whenever I meet with a potential client, I always ask a critical question: what is your goal for my legal representation? In other words, if I take your case, what do you want to get out it? This question is especially important for foreclosure defense.

As I tell all potential clients involved in foreclosure, no one gets a free home from fighting a foreclosure. While a successful legal challenge can prevent or undo a foreclosure that is not compliant with the law, nothing prevents a lender from simply starting the process again. With this in mind, the goal of foreclosure defense should always be a permanent resolution to the problem . . . not a temporary fix.

Here, I want to share three stories of how I have been able to help Massachusetts homeowners with preventing foreclosure. To protect privacy, I have changed each client’s name and location, but the underlining facts of each case are the same.

Preventing Foreclosure Through a Loan Modification

Meet Matt. Matt owned a two-family home in Saugus that was foreclosed in 2016. While he tried for years to work with his lender to avoid foreclosure, the loan servicer kept losing his loan modification applications and giving him excuses about why he didn’t qualify for foreclosure relief assistance. After foreclosure, the bank brought a post-foreclosure eviction case against him, at which time he retained me.

I challenged the bank’s case against him by arguing that it never served him with a proper notice to quit, and failed to provide him notice that he did qualify for a loan modification. The Court agreed that Matt never received the proper notice, which forced the bank to start the eviction case all over again.

In the end, we were able to negotiate a favorable loan modification for Matt, and a rescission (“undoing”) of the foreclosure sale!

Preventing Foreclosure Through Refinancing

Meet Tom. Tom inherited his parents’ home in Jamaica Plain several years ago, which had a past-due mortgage loan on it. Tom tried, repeatedly, to work with the lender to take over the loan and make these payments. Incredibly, the lender, at one point, outright refused to accept Tom’s payments towards the loan.

Tom retained me a month before the scheduled foreclosure sale, and I filed a lawsuit to stop the sale and for damages from the bank’s unfair and deceptive business practices. I succeeded in stopping the sale, and then began working with the bank to reach a settlement for this matter.

Tom was in a unique situation: he was fighting a foreclosure against a mortgage loan that wasn’t his. While he owned the home, the loan was from his deceased parents. I had Tom speak to several other mortgage lenders, and got him approved for financing. I then negotiated with the bank to accept a lower amount of the total owed debt, which the bank agreed to (at an amount far less than the home’s fair market value). Not only did Tom avoid foreclosure, this deal put instant equity into his home!

Preventing Foreclosure Through a Sale of the Home

Meet Jane. Jane owned a home in Beverly and was behind on her mortgage loan, due to lost employment. Jane was in the process of applying for a loan modification when her lender foreclosed, despite promising it would not do so.

Jane hired me to see what could be done. After we reviewed her options, we agreed that her best option wasn’t to keep the home, but rather, to sell it. The home was in a good neighborhood and would sell at a great price.

Since the foreclosure had already happened, I filed a lawsuit and requested an emergency court order to prevent the bank from selling the home again, which the Court granted. In the end, we reached a deal where the bank agreed to reverse the foreclosure and allow Jane to sell the home, which she did. Jane not only avoided foreclosure, but was able to recover significant equity from her home . . . money that would have been lost if the foreclosure had gone through.

Conclusion

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

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

foreclosure appeal

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

foreclosure appeal

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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