Articles by Goldman & Pease

Real Estate in the Digital Age

Preventing the Simple Email or Text from Becoming a Formal Contract

I. Introduction

home-for-saleGone are the days when parties brokering a real estate transaction entered into a
formal, written contract by first reaching for paper and ink. Today, a cell phone and a
zealous broker is all that it may take to enter into a binding agreement. The ubiquity of technology has made communications via email and text message both convenient and now, with recent case law, potentially risky. In a mere click, tap or swipe a person who believes that she or he may be having a casual or conversation or negotiating a better deal, may end up with a lawsuit instead.

II. Examining the Offer and Acceptance

In the significant McCarthy v. Tobin case, the Supreme Judicial Court (SJC) of Massachusetts upheld an Appeals Court decision that a buyer’s offer to purchase was a firm offer that became a binding contract the moment it was accepted by the seller. The SJC ruled that the Purchase and Sale Agreement amounted to a mere memorandum of the already binding contract, since the parties had already agreed on the material terms within the offer to purchase.

In contrast to McCarthy, the Massachusetts Land Court in the Singer v. Adamson case held that an email communication between a potential buyer and the seller’s broker did not meet the requirements of the Statute of Frauds, due to the generic nature of the email, and the lack of such previous communications between the parties. As such, though a legally binding offer and acceptance can be made via email, it must include the material terms of the offer, and overall indicate that a valid offer and acceptance is the intention of the parties. [Read more…]

Drones Take Off: What Condo Leaders Need to Know

By:  Howard S. Goldman, Esq.

I. Introduction

droneDrones are no longer the military robots or science fiction creations that we once imagined them to be. In fact, in 2016, according to the Consumer Technology Association, an estimated 3 million drones were purchased for use by hobbyists and businesses alike. Non-military drones are generally used either commercially or by hobbyists. All drone usage is regulated by the Federal Aviation Administration, or FAA, but hobbyists are only required to obtain a $5 registration, and can be as young as 13 years old. Businesses operating small drones are regulated by stricter standards.

II. Drones and the Law: An Overview

The FAA’s rules regulating drone usage are known as “part 107”. Under part 107, all drones must be registered if they weigh between .55 and 55 lbs. Drones over 55 lbs. must be registered through the FAA’s Aircraft Registry.

In Massachusetts, commercial drone operators must be 17 years old, be certified to fly a drone by the FAA, stay out of airport space and other controlled airspace, operate during daylight hours only, fly no more than 400 feet above the ground at no more than 100 miles per hour, and not fly over any person not directly involved in flying the drone.

Several federal bills have been proposed to help regulate drone usage. These have all been within the privacy rights and expectations of privacy guaranteed under the Fourth Amendment, and would create a much stricter standard for everyday drone usage. [Read more…]

Condominium Insurance: Waiver of Subrogation

I. Introduction

water-condoImagine arriving home to your condominium after a long day of work, opening the door to your unit, and being confronted with several inches of standing water. You enter your unit to the sound of dripping and look up to see that the ceiling in your living room is completely saturated with water. Upon further investigation, you discover that a leaking water supply valve in your upstairs neighbor’s unit has caused the serious water damage.

Who is responsible for the costs to repair the damage?

II. Condominium Insurance

Condominium ownership is unique in that it involves competing interests in real estate. Each condominium unit owner enjoys complete ownership of his or her unit and a shared interest, along with all of the other unit owners, in the condominium building and common areas. Typically, a portion of each unit owner’s monthly condo fee is used to pay for the condominium association’s insurance policy, which covers the condominium building, commonly owned property and liability insurance for the association (“Master Policy”).

However, the Master Policy does not usually cover damage to the interior of a unit. The Master Policy typically doesn’t cover damage to the unit owner’s personal possessions and liability for damage to other units .

Many unit owners, therefore, elect to purchase a separate insurance policy – often referred to as an H06 policy – which covers losses to any personal property and any structure and damages to any fixtures or upgrades added by the unit owner since the move-in date (“H06 Policy”).

In fact, more and more condominium associations have amended their By-laws to require each unit owner to purchase an H06 Policy in order to ensure that the unit owner will be reimbursed for damage to the unit, regardless of fault. Requiring unit owners to purchase an individual H06 Policy for the unit is especially beneficial in the scenario where the cost to repair damage to an individual unit is less than the deductible on the Master Policy. [Read more…]

Unit Owner Voting

Question:  

For the annual meeting, there are seven people running for five positions. The management company sent a proxy to all owners and requested that it either be mailed to them or dropped in the mailbox in the building lobby. This mailbox is accessed by current board members and items reviewed. Is this ethical to have those members who are on the ballot, receiving them and reviewing them before the meeting?

Answer:

ballot-box           Unit owner voting at annual or specially held meetings is subject to various rules and regulations.  Chief among the regulations is that a quorum, being a majority of all unit owners, must participate in order to have a binding resolution. Obtaining the quorum is difficult due to unit owner apathy, and to overcome this, the condo documents permit voting by proxy.  But the proxy documentation should be authenticated by either signature of an attesting witness and/or by notarization.  Such proxies should be of a limited duration and may authorize voting on the unit owner’s behalf for any and all matters (i.e. vote on all matters presented) or be restricted to vote on a specific matter only (i.e. vote for candidate X).

The question posited does not disclose whether the completed proxies are general or specific in nature, whether a specific person is designated to vote on behalf of the unit owner, or whether such proxies have been authorized by a unit owner or by a notary public.  Regardless, Associations are active, functioning governing bodies that must be flexible for requirements of its unit owner members to facilitate decision making, such as “dropping off the proxy at the mail box.”   Such drop-off process would be aided by adding ‘Confidential/For Management Only” and delivered in a sealed envelope.  Board elections can be contentious and personal, so Associations would be well advised to designate the management company to act as the independent party to directly oversee election results.

Required Deleading in Condominiums and Rental Properties

What Owners, Landlords, and Property Managers Need to Know

By: Howard S. Goldman, Esq.

While lead-based paint, having been banned in 1978, may seem like a distant memory for most of us, the presence of lead-based paint in older condominiums and apartment buildings poses some very real challenges for landlords and property managers today. The state and federal laws with respect to lead-based paint set up a strict set of rules for residential property owners and managers which must be adhered to closely in order to avoid large fines and other potential legal ramifications.

hazardThe lead-based paint laws (“Lead Laws”) require that lead paint hazards must be remediated in residences built before 1978 if a child under six years old lives there. The process of lead remediation (“deleading”) requires that a certified lead inspector perform an evaluation of the residence and thereafter certain discovered lead paint hazards must be deleaded in accordance with the Lead Laws. The remedy varies depending on the type of surface that is found to contain lead and the concentration of lead on that surface. Not all lead paint requires deleading. In general, surfaces which are impacted, such as window sills and door frames, along with surfaces that can be accessed by a small child must be deleaded only if the lead concentration is higher than 1.0 mg/cm2. Lead hazards on other surfaces, such as metal or those which are impossible to be accessed by children, only need to be made intact so that paint chips and dust do not contaminate the residence— for these no deleading is required.

These requirements pose a variety of problems for property owners and managers. In addition to the requirements of deleading, the Lead Laws also prevent any landlord or property manager from evicting or refusing to rent to a family that has a child under the age of six. This provision was added to the law to prevent housing discrimination. Landlords who are found to be in violation of this provision can be subjected to significant financial penalties. [Read more…]

Estate Planning – Is it for you?

By Howard S. Goldman, Esq.

Some people think that estate planning is only for wealthy individuals subject to large taxes. But minimizing estate tax liability is only one reason for estate planning. Consider these six additional reasons for completing an estate plan:

1. Determining who shall receive a share of your assets;
2. Deciding how and when your beneficiaries shall receive their inheritance;
3. Selecting an executor for your estate and a guardian for your children:
4. Providing for the orderly continuance or sale of your family business;
5. Creating a living trust; and,
6. Planning in case of your permanent disability.

In the absence of a valid executed will, state laws determine who inherits your assets and when they receive them. Further, the Probate Court will appoint a guardian for your children and an administrator for your estate. Accordingly, your wishes will not control disposition of your own estate and your estate may incur unnecessary taxes and administrative costs. [Read more…]

Occupancy Restrictions in Condominiums

familyWhen my wife and I bought our condominium a few years ago we had only one child. Now we have three kids and our condo board says that the bylaws limit the number of people in a unit to two per bedroom. While this is not the ideal situation for our family, we cannot afford to move to a bigger home at this time. My kids are small and they don’t cause any problems. Can the board enforce this bylaw and make us sell our home?

Answer:

You are right to explore all of your rights as a condominium owner with respect to these enforcement issues. This is a complicated question without a clear cut answer.

The condominium board does have the authority to enforce any rules set forth in the condominium documents (ie the Master Deed, Declaration of Trust, Bylaws and Rules and Regulations). Therefore, if the condominium documents include an “occupancy restriction” or a limit on the number of occupants allowed to reside in each bedroom, the board has the authority to enforce it. Legitimate reasons for enacting and enforcing such a restriction are to ensure that the building septic system can handle the needs of all of its residents, and to ensure the building is in compliance with city and state building and sanitary codes. In Massachusetts, for example, 105 MCR 410:400, the state sanitary code, requires 150 square feet of living space for the first occupant and at least 100 square feet for additional occupants. [Read more…]

Condominium Unit Rental Restrictions and Bans: Pros, Cons and Considerations

By: Howard S. Goldman, Esq. and Rebecca A. Erlichman, Esq.

The issue of how to handle condominium unit rentals is one that remains relevant to all condominium associations. It is up to the condominium association to protect the interests of all of the unit owners – both those who want to avoid an undue concentration of tenants to protect the character of the community and those who wish to rent out their units.

CondosThere are pros and cons to allowing rentals. Tenants are more likely to abuse common areas and amenities, violate condominium association rules, and be less conscientious caretakers of the units they occupy as compared to homeowners. A large concentration of tenants will significantly change the nature of a condominium community and could potentially lower the market price and affect the ability of owners to refinance. On the other hand, however, certain condominium unit owners value the ability to rent out units as a financial investment and want the flexibility of being able to rent out the unit during a short term geographical relocation.

Whether the condominium association chooses to ban rentals altogether, or allows them, it is clear that the bylaws should containing language pertaining to rentals to clarify the rules and avoid conflict. This article will discuss a number of factors condominium associations should consider with respect to updating its bylaws to address the issue of tenants.

Condominium Associations Have Authority to Implement New Rules on Rentals

In general, condominium associations have broad latitude to create rules and regulations intended to better the community. These broad powers emerge from the basic notion of condominium ownership: in exchange for the benefits of association with one’s neighbors, an owner “must give up a certain degree of freedom of choice which he might otherwise enjoy in separate, privately owned property.” Where use restrictions are placed on unit owners, such measures of control must be contained within the condominium’s master deed or by-laws and not its rules and regulations. Johnson v. Keith, 368 Mass. 316, 320 (1975); M.G.L. 183A § 8(g) (requiring that restrictions on the use of condominium buildings be contained within the master deed); M.G.L. 183A § 11(e) (requiring that use restrictions not detailed in the master deed be contained in the by-laws). See Granby Heights Association, Inc. v. Dean, 38 Mass. App. Ct. 266 (1995) (where a condominium rule against pets was ruled invalid because it was not contained within the by-laws or master deed). [Read more…]

The Rise Of Airbnb: What Condominium Associations Need To Know About Short Term Rentals

I. Introduction

airbnbInstances of home-sharing or short term rentals have skyrocketed in recent years due to the rise in popularity of websites such as Airbnb.com, homeaway.com and vrbo.com. For a small fee, these websites connect homeowners with potential renters who are interested in finding a place to stay for as little as one night at a time. Homeowners can make a significant profit by allowing renters nightly use of their entire home or even a single bedroom therein, especially in major cities like Boston where nightly rates of hotel rooms are expensive and heavily taxed. But conflicts arise when the homeowner is the owner of a condominium unit because the unit owner’s decision to rent out all or a portion of the unit impacts all of the residents of the condominium and may not be permitted under the condominium bylaws.

II. Condominium Associations Should Be Wary of Short Term Rentals

The rise in use of Airbnb.com and similar websites raises significant concerns for condominium boards, unit owners and property managers. First, there is the issue of safety within a shared living space. When a condominium unit is rented, the renter gains access to common area facilities such as common hallways, gymnasiums, rooftops and lobbies. The Airbnb.com renters are not responsible for paying common area maintenance fees, create excessive water usage, and may misuse shared equipment or otherwise take advantage of amenities reserved for homeowners. These communally accessible areas of the condominium then lose their exclusivity and other unit owners may even feel threatened by the presence of strangers in their space who most often are uninformed of the specific rules surrounding the use thereof.

There are also the issues of noise and pollution. Residential condominiums in urban areas are often rented to tourists who are on vacation and may stay up late, play loud music and engage in illicit activities, such as smoking, while staying at the unit. These activities are generally subject to fines, but transient renters will be gone by the time the fine is issued and, therefore, be more likely to engage in disruptive activities.paid-slip-and-fall-image [Read more…]

Risky Business: Why Employers Should Beware of Hiring Independent Contractors

I. Introduction

FreelanceOver the past several decades, the number of employers hiring independent contractors, consultants, freelancers, temps, part-timers, and contingent employees has increased significantly. Hiring independent contractors tends to provide employers with substantial financial savings, flexibility in staffing projects and greater efficiency due to the specialized expertise of the worker. Additionally, many workers prefer independent contract work because they reject the traditional 9-5, long-term employment under one employer in favor of the flexibility, diversity and freedom that comes with working as an independent contractor.

Notwithstanding the many benefits of the independent contractor relationship to both the employer and the worker, employers must be cautious when classifying a worker as an independent contractor. Serious civil liability may result from misclassifying workers as independent contractors under Massachusetts wage and hour laws, including mandatory treble damages and attorneys’ fees, costs and interest.

II. The Independent Contractor Statute – M.G.L. c. 149, § 148B

Like many states, Massachusetts has enacted legislation defining which workers may properly be classified as independent contractors, M.G.L. 149, § 148B (“Independent Contractor Statute”). Under Massachusetts Independent Contractor statute, a worker is presumed to be an employee, unless the employer can prove that the worker:

  1. Is free form the employer’s control and direction in connection with the performance of services;
  2. Performs services outside the usual course of business of the employer; and
  3. Customarily engages in an independently established trade, occupation, profession or business.

Unless a worker meets all three of these rigid requirements, the Independent Contractor Statute classifies such worker as an “employee” for purposes of Massachusetts wage and hour laws, regardless of whether the worker prefers to be classified as an independent contractor. [Read more…]

Does the Condo Association Attorney Represent the Board or Owners?

PeaseQuote6-15Question: I’m concerned about the legality of some of the decisions made by the board in my condo community. When I asked the association’s attorney for advice, he told me he represents the board and can’t advise individual owners. This seems wrong to me. Owners pay the attorneys’ legal fees through our assessments. Shouldn’t the attorney be looking out for our interest, not the board’s?

Answer: Cameron Pease, Esq., a partner in Goldman & Pease, LLC, says he gets this question frequently from owners who often make your point: The association’s attorney out to represent the owners who pay his or her fee. But that’s not how it works.

An association is the equivalent of a corporation, he explains. A corporation attorney represents the interests of the corporation as a whole, not the interest of individual shareholders. An association attorney, similarly, represents the association. The board owners elect to represent them, and the board, representing the collective interests of the association, is the attorney’s client, Pease says. Owners are sometimes convinced they’re acting in the best interests of the association, but in fact, he tells them, “they only represent themselves.”

When owners ask him for legal advice, Pease doesn’t advise them to hire an attorney to represent them. “I don’t want to encourage litigation,” he notes. But he does suggest that they attend meetings, express their concerns to the board, determine if other owners share their view, and try to persuade the board to change the decision the owner doesn’t like. He also points out that owners who don’t like the board’s decisions can run for the board themselves. “But most of the time, people who are complaining want to complain from the sidelines; they don’t want to sit on the board themselves,” Pease says.

Association attorneys face a more difficult challenge when board members fight each other. “The worst thing you can do is take sides ( in these disputes),” Pease says. You have to explain that upfront, offer what you think is the best advice for the association, and encourage them to resolve their differences. But if they can’t and some sitting board members sue others, there’s only one option for the attorney, he says. “You have to recuse yourself.”

Development of the Mechanic’s Lien and What it May Mean for You

By Howard Goldman

I. Introduction

mechanicsA mechanic’s lien is a statutorily created lien against real property, the purpose of which is to secure a contractor’s right to payment for services rendered and materials supplied in connection with the improvement of real estate.

In this Client Update, we will briefly explain the requirements of the Massachusetts mechanic’s lien statute and how it works. We will explore legal developments relating to the statute, including what constitutes a “written contract” in this evolving digital age. We will also offer best practices for landlords and land owners to employ in order to avoid their own properties becoming subject to mechanic’s liens asserted by contractors of their tenants.

II. Mechanic’s Lien 101: A Recap

One of the reasons that the mechanic’s lien is such a powerful tool for creditors is that by statute it does not require court approval before it is perfected (placed on record title). As a result, creditors can put a cloud on the title of real estate for which their work, material, or services were provided, without having to first navigate expensive and time-consuming court processes. [Read more…]

Avoid Exposure to Snow-Removal Fines and Weather-Related Lawsuits

By: Howard S. Goldman, Esq.

snow2It just keeps coming. The past two weeks have seen record-setting winter conditions in the Greater Boston area. Repeated snowstorms and freezing temperatures have prompted many school districts in the area to cancel or delay as many as six days of classes. Like schools, businesses and property owners should be mindful of the effect of winter conditions on their operations to ensure safety and minimize liability and to avoid fines for failure to remove snow. This Client Update surveys some snow-removal fines in the area and discusses recent and major changes in Massachusetts law on the duty of care of a business/property owner regarding snow and ice removal. It also provides a few pragmatic recommendations for a carefully worded Snow Removal Maintenance Agreement that can minimize legal exposure.

Snow Removal Fines

Many Massachusetts property owners are learning the hard way that failure to remove snow on sidewalks in front of their property can result in stiff fines. The precise rules and monetary sanctions concerning snow removal on sidewalks vary from city to city, but all aim towards keeping sidewalks safe for walking. In Boston, for instance, snow removal is required for the full width of the sidewalk or a minimum width of 42 inches and property owners have three hours from the end of snowfall, or three hours from sunrise if the snow falls overnight, to clear the sidewalk. Under the Boston ordinance, property owners must also clear snow that may be blocking handicapped ramps, fire hydrants or catch basins. Daily fines in Boston range from $50 to $150 for failure to remove snow as required. If an individual places snow from private property onto a sidewalk or the street, a daily fine of $250 will be imposed.

Each city and town is a little difference in its respective snow-removal ordinance. In Worcester, property owners must remove snow and ice ten hours after it stops snowing, with a $75 per day fine waiting for those who don’t. In Newton the time window is twenty-four hours with no specific fine set out. In order to avoid these fines, property owners should consult with their local department of public works to understand the time parameters afforded for removing snow and should always avoid placing snow into the street or other public ways. [Read more…]

Adverse Possession: How To Stop An Abutter From Asserting Ownership Over Your Property

By Howard Goldman

Neighborly relations may turn sour quickly when disputes arise over property boundaries. A deed alone will not protect you from boundary line disputes. A neighbor may assert an ownership claim over part of your land through a doctrine known as Adverse Possession. Some examples of Adverse Possession claims are as follows:

  • A fence is mistakenly or even intentionally located several feet away from the boundary line. Over time, the property owners act as if the fence marks the boundary line, or property owners change and the new owners believe the fence marks the boundary line.
  • You grant permission to a neighbor to build a retaining wall on your property to prevent land erosion and you also permit the neighbor to plant on top of the retaining wall. Over time, however, the property owners change or memories fade and now the neighbor asserts they own the land to the retaining wall.
  • Your neighbor decides to enlarge his driveway but the extension encroaches onto your property.

If your neighbor successfully asserts adverse possession and you lose a portion of your property, the consequences could be catastrophic. Your property may no longer comply with certain local zoning setback and lot size requirements. This in turn, affects the marketability of your property. [Read more…]

The Massachusetts Condominium Meeting Minute Guidelines

By Howard Goldman

Introduction

Maintaining condominium board meeting minutes is a practice that has the potential to engage unit owners, foster transparency, and help solve various difficulties facing a condominium. The questions and answers set forth below will cover policies and protocol for taking and retaining condominium board meeting minutes. It will explain what must be included, what can be included, and what should not be included in the minutes.

Question:
Does a condominium have to keep meeting minutes? What should the minutes include?

Answer:
Massachusetts General Laws do not have a requirement that meeting minutes must be kept, and many condominiums do not have a requirement for keeping meeting minutes. Whether to keep detailed meeting minutes is a complicated decision that should be weighed by the condominium trust. On one hand, keeping detailed meeting minutes provides the trust a record of what agenda items were discussed and how each board member voted on a particular issue. Meeting minutes allow new board members to get up to speed on pending and past issues and ensure both board members and unit owners have access to the same information, which promotes an open and ongoing dialogue and could encourage more people to become involved in the condominium management. On the other hand, all meeting minutes automatically become part of the condominium books and records, which must be made available to unit owners upon request. These meeting minutes could open the condominium up for litigation against it by a unit owner who is not in agreement with the majority of the board. For example, if a condominium had many unit owners raise an issue of slippery stairs due to insufficient snow removal or slippery conditions in the lobby on a rainy day, and those complaints were logged in the minutes, that could open the condominium up for liability in a future slip and fall lawsuit because it would be evidence showing the condominium had prior notice of unsafe conditions.

[Read more…]