Articles Posted in Real Estate Sales

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house keysUnderstanding your rights in real property may be crucial when making legal decisions concerning that property, as illustrated in an August 15, 2018 Massachusetts real estate case.  The dispute centered around property that had been the plaintiff’s home since 1987.  The plaintiff had initially owned the property, but he lost it to foreclosure in 1994.  The plaintiff continued residing in the house, however, after convincing a friend to purchase the house from the foreclosing bank and rent it to him.  The plaintiff hoped to buy the house back after his credit had improved.

In 2003, the house was sold to the defendant, another friend of the plaintiff.  The defendant promised to sell the property back to the plaintiff several times.  Each time, however, the plaintiff failed to close on the property through no fault of the defendant.  The last purchase and sale agreement was executed by the parties in 2015, and the defendant agreed to four extensions of the closing through the following year.  When the plaintiff did not close, the defendant initiated eviction proceedings.  In response, the plaintiff filed an action to impose a constructive or resulting trust over the property, claiming that he had been the property’s rightful owner all along.

A constructive trust is created by the court to prevent unjust enrichment resulting from fraud, a violation of a fiduciary duty, mistake, or other circumstances in which the title owner’s retention of legal title to property would result in unjust enrichment.  A constructive trust is not a true trust.  However, once a court determines that a constructive trust exists, the court can order the unjustly enriched party to transfer the property to the beneficiary of the constructive trust.

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If someone files a frivolous real estate action against you, you may be able to recover your attorneys’ fees from defending against the claim. A December 18, 2017 case before the Massachusetts Land Court demonstrates this situation. In the case, a town sold a parcel of land to the defendants. Thereafter, the town filed an action against the defendants in land court, claiming that the parcel was subject to a restrictive covenant that only allowed for one residential lot.Legal News Gavel

After evaluating the evidence, the land court ruled that there was no restrictive covenant created by reference in the deed to a subdivision plan, nor was an equitable servitude established without a sufficient writing. The land court also refused to rescind the conveyance on the ground that it exceeded the authority granted by the town in approving the sale of the parcel. The defendants subsequently filed a motion for attorneys’ fees, claiming that the court’s legal rulings led to a conclusion that the town’s claims were wholly insubstantial, frivolous, and not advanced in good faith.

In Massachusetts, a court may award reasonable attorneys’ fees and costs to a party if it determines that all or substantially all of the claims made by another party were wholly insubstantial, frivolous, and not advanced in good faith. A claim is not considered frivolous merely because the party was unsuccessful, but only when the court finds a total absence of evidentiary or legal support.

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Some residential real estate deeds include provisions that limit or dictate what can be done with the property, often known as restrictive covenants.  In a recent case (Mass. Land Ct. Jan. 25, 2017), the Massachusetts Land Court considered whether an option to repurchase land, styled as a restrictive covenant, could be exercised after a substantial period of time.Legal News Gavel

The plaintiff in the case was a subdivision developer that had sold several lots to residential purchasers, including the defendants, for the purpose of building homes on the lots.  The plaintiff recorded a Declaration of Restrictive Covenants that applied to all of the subdivision lots, which contained a provision that allowed the plaintiff to repurchase any lot at the original sale price if home construction had not commenced within a year of the purchase.

In 2005, the defendants’ parents purchased a subdivision lot from the plaintiff, and a year passed without any construction.  They subsequently conveyed the lot to the defendants, who also failed to build on the lot.  In 2015, the plaintiff demanded that the defendants re-convey the property to the plaintiff, pursuant to the covenant contained in the Declaration.  The plaintiff filed an action with the Land Court, claiming its right to exercise an option to re-purchase the lot as a result of the defendants’ failure to commence construction within a year after their purchase of the property.

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Beachfront property can involve interesting legal issues as a result of changing shorelines. Accretion occurs when the line between water and land is changed by the gradual deposit of alluvial soil upon the margin of the water. In a recent real estate case, Brown v. Kalicki (Mass. App. Ct. Oct. 20, 2016), the Appeals Court of Massachusetts addressed the question of whether accreted beachfront took on the status of registered land as it formed, or whether registered status must be obtained by amending the title in court proceedings.Legal News Gavel

In Brown, the plaintiff’s land was originally registered in the 1920s and 1930s. The boundary line was identified in the certificate of title as the Nantucket Sound. In the decades following registration, the size of the parcels grew substantially as a result of accretion. The plaintiffs filed a petition to establish their respective ownership rights in the accreted land. The defendants intervened in the action, claiming that they acquired prescriptive easements to use the beach area on the plaintiffs’ land. The plaintiffs responded that, pursuant to Massachusetts statute, the defendants could not obtain prescriptive rights in registered land. After the land court found in favor of the plaintiffs, the defendants appealed.

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The Appeals Court of Massachusetts released a recent opinion in a real estate case, Goddard v. Goucher (Mass. App. Ct. Feb. 2, 2016), addressing whether a purchase and sale agreement was valid and enforceable. The plaintiff filed the action seeking enforcement of a 2007 purchase and sale agreement. However, despite a pretrial stipulation regarding the contractual negotiations and their legal consequences, the Superior Court ruled that the parties had failed to enter into a valid and enforceable purchase and sale agreement. The plaintiff subsequently appealed the court’s decision.Legal News Gavel

In Goddard, the defendant agreed to sell the plaintiff a parcel of property in 2007. The plaintiff signed and sent the defendant an agreement that provided for delivery of the deed in June 2007, and it also stated that the closing date could be extended for a period of not more than 30 days. The defendant sent the agreement to his attorney, who made a number of handwritten amendments to the agreement, including a provision that the plaintiff agreed to assume any and all encumbrances of record or otherwise, and any and all past and future taxes.

In the meantime, real estate taxes on the property went unpaid. The town recorded a tax taking of the property, filed an action in the Land Court, and obtained a judgment foreclosing and barring all rights of redemption as to the property. The plaintiff then filed a petition with the Land Court to vacate the judgment of foreclosure, asserting that he had standing as a buyer under the 2007 agreement.  That case was held in abeyance pending the current action in Superior Court, in which the plaintiff alleged breach of contract claims and sought specific performance of the agreement.

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In Touher v. Town of Essex, the Massachusetts Court of Appeals was presented with a somewhat unusual situation involving long-term land leases between the town of Essex and residents who built homes on the leased property. Four sets of plaintiffs filed a complaint with the lower court, seeking a declaration that they owned the buildings erected on property leased to them by Essex and on which they reside. A Superior Court judge found that, although two of the plaintiffs owned their cottages as personal property, the more substantial homes constructed by the other two plaintiffs were fixtures that belonged to the town. On appeal, the court affirmed the ruling.  Legal News Gavel

For over a century, the town of Essex has been leasing plots of waterfront property to seasonal residents. Many residents built seasonal cottages on their leased property and paid real estate taxes on the cottages. Fearing the town would eventually sell the land and the structures built on them, the plaintiffs filed a complaint seeking a declaration that they owned their homes as personal property.

In determining whether the residents’ houses were fixtures or personal property, the court cited to the general rule that if it has become so affixed that its identity is lost, or so annexed that it cannot be removed without material injury to the real estate or to itself, it is a fixture. In Touher, the court held that the residents’ homes, one of which expanded the original cottage to double its size, and the other of which was a substantial three-story structure, could not be removed without significant damage to the homes and were permanently affixed to the land.

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Legal News GavelThe Attorney General released a statement late last month in response to a recent U.S. Supreme Court decision regarding disparate impact claims made under the Fair Housing Act (FHA). The ruling was in alignment with the Attorney General’s argument that both businesses and individuals involved in real estate transactions, including the renting and selling of homes, must be held legally accountable for the discriminatory effects of their practices.

The Court specifically referred to the amicus curiae brief filed by the Attorney General’s office for the proposition that disparate impact claims are critical for states to be able to combat the specific sort of systematic discrimination that the FHA was designed to address.

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estate-site-banner-5-1099198-mThe Massachusetts Supreme Judicial Court reached an interesting decision in a real estate contract case, KGM Custom Homes, Inc. v. Prosky, 468 Mass. 247 (2014).

The case involved a deal for the defendants to sell approximately 45.7 acres of land to the plaintiff, K.G.M. Custom Homes, Inc. (K.G.M.), with the purpose of developing residential homes. The price was to be determined by the number of approved and permitted buildable home lots. The closing was set for 21 days after all the final approvals were granted.

Several years later, after the builder had been working to secure approval and permits, and after a dispute regarding the calculated sale price, the defendants’ attorney falsely informed the plaintiff’s attorney that the defendants had received a higher offer for the property, and that the plaintiff’s attorney should calculate damages based on the liquidated damages provision of the contract. The plaintiff builder filed suit, seeking to have the contract enforced. While the lawsuit was still pending, the builder received approval for its plan, and the parties met to attempt to close the offer. Allegedly, due to the behavior of the defendants’ attorney, the parties were unable to close the sale.

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Legal News GavelReal estate law is complex and often implicates many other areas of the law, including tax law, estate law, and family law. What this means is that throughout the various stages of your life, you may end up needing a Massachusetts real estate lawyer to represent your interests.

One of the most common reasons you will need a real estate attorney will be when a piece of real estate or a home needs to be transferred to someone else. The most prevalent way this is done is probably through the typical sale of a home from one private individual to another.

In the most straightforward cases, someone will have to prepare and then execute the Offer to Purchase. The Purchase and Sale Agreement will govern your and the seller’s obligations from the time the home is taken off the market to closing.

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Legal News GavelThe Supreme Judicial Court of Massachusetts is expected to decide a case that will have a resounding impact on the way real estate is handled under Massachusetts law.

The case, Monell, et al. v. Boston Pads, LLC, et al., will address whether the lower court judge properly exempted the real estate industry from the requirements set forth for independent contractors in Mass. G.L.c. 149, § 148B.

In the initial case, the plaintiffs worked for a real estate company, in which they were paid by means of commission. However, their positions were allegedly controlled and directed in a manner more commonly carried out in a typical employer-employee relationship. Such control included such factors as a dress code.

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