Articles Posted in Real Estate Sales

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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.houses

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.beach

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.neighborhood-1-1496240-640x480

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.  curacao-beaches-6-1552857-640x480

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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FamilyThe 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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pen signingReal 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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supreme courtThe 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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bathroom remodelAccording to a prominent Boston news outlet citing to the mortgage giant Freddie Mac, earlier this month mortgage rates hit an almost two-year low of 3.73 percent.

The volume of home sales are reportedly slightly lower than they were at this time last year. Despite the volume of actual home sales being lower, December sales data reflected that home sales agreements and prices are both rising since last December. The median price of a single family home rose 4.1 percent, from $319,900 to $333,000. Additionally, the number of home sale agreements signed (though not yet closed on) also rose from  2,406 to 3,096 during the same time period (December 2013 compared with December 2014).

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The landmark decision reached by the U.S. Court of Appeals for the First Circuit, in Real Estate Bar Association (REBA) v. National Estate Information Services (NREIS), 459 Mass. 512 (2011), affirmed not only the mandatory keyspresence of but the substantial participation and involvement of a Massachusetts attorney in real estate closing proceedings.

The issue in the case was the legality of the NREIS’s actions related to providing so-called “drive by closing attorneys” and all the necessary required documents as part of its services. NREIS provided nationwide services for closings, and it had a list of contract attorneys who would arrive at closing proceedings to provide limited services and in order to meet the attendance requirement under Massachusetts law.

The justices in the case cited a lack of information necessary to determine whether the NREIS was engaged in the unauthorized practice of law, but they reaffirmed that the conveyance of real property and the various corollary documents associated with the transfer did amount to the practice of law, and therefore the situation required more than the mere presence of an attorney.

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