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Closing Attorney Rick Dunn forwards this article describing closing costs and expenses that home buyers could expect at the time of closing.  Things like the abstract or title exam, flood hazard area determination and credit report fees can surprise some first time buyers.  Planning is made more difficult by the fact that some fees in certain areas are variable depending on credit score.  See the article here and be sure to consult a trusted professional when buying a home: http://realestate.aol.com/blog/2015/02/06/what-need-know-closing-costs/ Add a comment
This is according to HartfordBusiness.com, a publication of the Hartford Business Journal.  The upshot is that potential buyers are expected to enter the market in earnest as they attempt to prevent opportunity from passing them by.  Trends from the previous year show variable sales figures for the New England states but the article suggests a continuation of a strong market for the region as in 2013 and 2014.  For more on the subject, click here:  http://www.hartfordbusiness.com/article/20150120/NEWS01/150129996 Add a comment
Just as there are alternate names for condominium-type ownership in other countries such as strata title in Canada and commonhold in the UK, there are community associations that are similar to but distinct from US-style residential condominiums. Home Owners Associations (HOA’s), for example, share the concept of community-wide rules and regulations, architectural restrictions and other governing elements with condominiums.  Another type is called Planned Unit Developments (PUD’s) which may be neighborhoods of single family houses indistinguishable from a typical residential neighborhood except for controlling documents that may cover the access road, design choices or construction density. Add a comment

Written by Attorney Scott Eriksen

At the end of January, 2015, Charlie Perkins, David Chenelle and I travelled to San Francisco for Community Association Institute’s 36th Annual Community Association Law Seminar. The Seminar is a multi-day exposition of national legal developments in the area of community association and condominium law practice.  Veteran community association attorneys from sea to shining sea discuss important changes to statutory and common law, review particularly relevant legislative movements and present new (or tried-and-true) guidance for addressing the multitude of issues that our clients face on a daily basis.

I have been fortunate enough to attend the Seminar for three years running and I can truly say that it has been a valuable and edifying experience each time. It is engaging and inspiring to hear from some of the most well respected counselors in the field, and fun to commiserate with practitioners who – despite thousands of miles between our geographic locations – face largely the same difficulties and challenges that we do on any given day.  Delinquent unit owners? They have those in California, too.  Rogue board members? Illinois feels our pain. Think you have developer complaints? So does New Jersey.  Hoarding, smoking, parking, etc. – chances are someone from another jurisdiction has dealt with these issues as well.  It’s interesting to hear unique perspectives for addressing these problems (though the solutions from other states are not always an option in the Commonwealth).

Oh, and the Seminar is also a fine spot to pick-up a new community association joke, like this gem:

A man falls very ill one day and goes to see his doctor.  The doctor runs a battery of tests on the man and determines, unfortunately, that the man’s condition is terminal.  “I’m sorry,” says the doctor to the man, “I’m afraid you only have one year to live.”  The man is horrified: “Doctor, that’s terrible news! Surely there must be something I can do to prolong my time.”  The doctor pauses in thought for a moment and then his eyes brighten.  “Well,” he says, “there is one thing you can do…” “What is it?!” the man asks eagerly. “Buy a condominium and then join the Board,” the doctor replies evenly.  “What?  I don’t understand, doctor, will that make me live longer?” the man asks.  “No,” says the doctor, “but it will be the longest year of your life.”

So you see, community association lawyers can be funny at times too (or at least we like think so).  Without further ado, here is a recap of some of the highlights from my experience at the Seminar:

Construction Defects – Who Should be on Your Guest List and What’s On the Menu

One of the interesting lectures that I attended was a presentation on dealing with construction defects at newly transitioned associations.  This is something that our firm routinely handles – in fact, we have pending construction/transition cases right now – so I thought it would be good to get some additional perspective on the subject. The theme of the presentation was that construction defect practice gets more interesting and more complicated every day, with a focus on the evolving theories of construction defect liability and the critical role insurance plays is financing recoveries.  Cleverly titled “Who Should be on Your Guest List and What’s on the Menu,” the aim of the lecture was to provide a general outline for approaching construction defect cases to maximize an association’s recovery while minimizing unnecessary or unproductive legal and other expenses.

 

The presenters confirmed what our own practice has identified over the past few years: one of the unfortunate side-effects of the recent Great Recession has been a rise in issues related to new construction projects.  Whether developers run out of money and leave projects incomplete, cut corners or simply disappear or go bankrupt, the impact has taken its toll on a number of recently constructed associations.  Defects can range from the cosmetic on one end to the structural on the other, or anywhere in between. These issues can present real challenges to newly-minted board members who assume control of the association. For this reason and others, we advise clients that transition is a critical time in the association’s life.  It is important to ensure that the new board has the right team of legal, insurance and engineering representatives even before the new board is elected.  This will help facilitate timely and cost-effective resolution to any defects which may need to be addressed.

 

The big take away from the lecture was this: “Save a seat at the construction defect table for insurers.” The old maxim that you can’t get blood from a stone holds true.  Insolvent or dissolved declarants (often-times special purpose limited liability companies) may not be worth chasing.  However, that doesn’t necessarily mean that an association will be out of luck. Insurance is a potential source of financial recovery when it comes to construction defects, and developer insurance isn’t the only place to look.  Errors and omissions insurance policies for design professionals “could end up being the main course.” According to the presenters, design professionals’ policies are generally more responsive to defect claims compared to standard form CGL policies carried by contactors. Therefore, they suggested, associations should consider bringing a claim for breach of implied warranty directly against design professionals for their design defects.  In addition, the presenters offered that in circumstances where the declarant is insolvent, an association should also consider bringing implied warranty claims directly against lower-tier contractors/subcontractors who caused workmanship defects.

 

Running a Darn Good Meeting

Not long ago I wrote an article on Robert’s Rules of Order.  While I have become increasingly more comfortable with rules of parliamentary procedure over the past few years, running an effective and productive meeting is a critical skill for any association attorney.  Accordingly, when I saw on my schedule a presentation entitled “Running a Darn Good Meeting” I jumped at the chance to learn more.

The presenter for this lecture was none other than Jim Slaughter, a North Carolina attorney and member of the prestigious College of Community Association Lawyers (CCAL).  Jim is a Certified Professional Parliamentarian, past President of the American College of Parliamentary Lawyers and the author of The Complete Idiot’s Guide to Parliamentary Procedure (a book I often consult before meetings). While a course on parliamentary procedure may seem less enjoyable to some than a trip to the dentist’s office, Jim’s easy, southern manner and knack for presenting to large audiences made for an engaging and informative session.

As I mentioned in my last article, Jim noted that Robert’s Rules isn’t synonymous with parliamentary procedure – but that it is the most often used and well-known set of rules.  He focused on effective ways to implement these rules without getting bogged down in the minutiae. In fact, I was pleased (and relieved) that Jim’s overview confirmed the brief outline that I had prepared for our client newsletter not long ago.  Namely:

  1. One Size May Not Fit All: Meeting formality is a sliding scale. Too much can be just as troublesome as not enough, and size matters when it comes to determining how best to proceed. Adopt an approach that works for the size of the group involved.
 
  1. Know Your Documents: The association’s governing documents are important in determining the application of rules of parliamentary procedure.
 
  1. Motions: The motion is the basic building block of conducting formal business at any meeting. Under Robert’s Rules, the motion, made by an authorized member of the body, should be the starting point of virtually all discussions, votes or actions taken at a meeting. Recognized individuals may make a motion by simply stating: “I move to discuss the association’s budget for Halloween decorations…” or “I move that we discuss hiring Sno-Be-Gone to do our plowing this winter…” Most motions require a second in order to proceed. That is, another member of the body will say “I second the motion regarding the Halloween decorations,” or more simply “I second the motion.” Once this has been completed, the subject has been “put in play” and formal action may be taken.
 
  1. Minutes: Minutes are an important record of all meetings. But minutes need not (and should not) be a record of everything that was said at a meeting; rather, minutes are a record of what was done at a meeting. Keeping this in mind will help keep the task of preparing minutes manageable.
Jim also discussed the importance of a good agenda as a way of keeping a meeting on track and on time.  He discussed the utility of proxies (and the various different kinds: general proxies, limited proxies, directed proxies, etc.), and offered advice on what do to when you don’t get a quorum – an issue many of our association clients routinely face.  He left us with helpful handouts and a link to his website, which also contains a wealth of information on the topic: www.jimslaughter.com. I strongly suggest that our board member clients take a minute to review the site as I have found the information to be approachable and useful, with charts and handouts (cheat sheets, if you will) to help you run a darn good meeting yourself.

 

Check back in a few days for more reflections on the conference.

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Current mortgage interest rates remain near historic lows but the Federal Reserve is biding its time until implementing the planned increase.  Expected some time this year, the rate hike may bring 30-year mortgages up to around 5%, prompting economists and Realtor.com to encourage borrowers to act quickly.  Closing Attorney Rick Dunn recommends this link for further information:  http://realtormag.realtor.org/daily-news/2015/02/03/why-homebuyers-need-act-now Add a comment
The Community Associations Institute has issued an Action Alert relative to Congressional easing of antenna installation requirements for HAM Radios and how they may affect condominiums and other community associations.  CAI views the unrestricted installation of towers and large, fixed antennae as a “heavy handed and unnecessary intrusion” on community associations and is urging associations and their legal counsel to contact elected officials to request that they oppose all prohibition of review of antennae installation.  Interested unit owners and trustees can get more information by emailing Sanford at This email address is being protected from spambots. You need JavaScript enabled to view it.. Add a comment
Membership of the Community Associations Institute is gathering in San Francisco this week to attend sessions on ethics, fair debt collection, fair housing, employment and numerous other topics.  Discussions are expected to be national in scope but also applicable to regional practitioners such as Perkins & Anctil.  The four day event will take place at the Westin St. Francis in Union Square, just between the Nob Hill and SOMA (South of Market) neighborhoods. Add a comment
New England as a region is not as prone to the events many would consider disasters as some other parts of the country but we do have our share, including hurricanes, fires and the occasional earthquake.  Senior Partner Charlie Perkins notes that while these are certainly things to prepare for, it is the mundane water leak that is most likely to disrupt the lives of community association dwellers.  Quoted in Mike Odenthal’s column in the December issue of New England Condominium (www.newenglandcondo.com), Charlie reminds trustees, unit owners and managers that a plan that reflects the building(s)’ character, location and safety concerns is a must for all associations.  Contents should include phone numbers for emergency services, association managers, trusted repair professionals, insurance providers and even the Red Cross in severely critical situations, several of which he has seen in his time serving his community association clients.  As with most of our previous posts concerning Charlie’s condominium thoughts, communication comes up as a vital aspect of the success and well-being of any association.  He recommends creating a book containing all information and procedures as well as holding a special meeting of unit owners to demonstrate the plan and carry out a trial run. Add a comment
In the United States, most people have a pretty clear idea of what a condominium is but unit owners travelling outside the country who are interested in learning about condominium living will need some new vocabulary.  For instance, Australian and Canadian (Except for the Quebecois, of course, who say copropriété divise or divided co-property) owners refer to their form of condominium ownership as “strata title”.  This is a reference to multiple levels, typically of an urban apartment-style building the term first applied to but now denotes single and two story associations in small towns and suburbs. The name will also apply in parts of Asia, Africa, Oceania and even the Middle East.  Other names for condominiums include commonhold in the UK, defined property in Spanish speaking regions and sectional title in South Africa. Add a comment
Two condominium clients have recently banned smoking both in common areas as well as inside individual units.  The change is a timely one, given the appearance in the current issue of Condo Media of an article on the subject that takes a national scope in addressing the matter.  According to the article, barring a supermajority or such higher percentage as may be required under the governing documents, an association cannot ban in-unit smoking in Massachusetts yet.  However, the Commonwealth and other states are considering a ban on smoking in all multifamily residences just as they have in public spaces and work places.  This would hinge on a determination that smoking is a nuisance and or a threat to public health.  In that case, condominium documents with a nuisance provision may be able to prohibit all smoking.  Readers who are members of the Community Associations Institute can view the article here: http://www.caine.org/MediaMagazine/      Non Members can obtain a copy by emailing This email address is being protected from spambots. You need JavaScript enabled to view it. Add a comment
Those seeking to buy a home and obtain a mortgage tend to spend much more time locating the house and less time deciding on a lender.  The complexity of the process may be to blame so the Consumer Finance Protection Bureau and the Federal Housing Finance Agency have created an online “Owning a Home Toolkit.”  The primary feature of this government assistance program is the rate checking tool which allows borrowers to easily compare rates and lenders-an activity that sometimes gets neglected.  Closing Attorney Rick Dunn saw this webpage with links to the toolkit:  http://www.inman.com/2015/01/13/uncle-sam-wants-you-to-shop-for-a-mortgage/ Add a comment
The Wall Street Journal is reporting that the rates for 30-year fixed-rate mortgages have fallen well below 4% as of Tuesday, January 6, 2015.  The decrease is said to be linked to falling oil prices and to declining treasury yields, a mixed blessing that may benefit home buyers given that the real estate market hinges on increased buying power. Real Estate Attorney Rob Anctil forwards this article as illustration: http://blogs.wsj.com/totalreturn/2015/01/06/mortgage-rates-back-at-2013-lows/?mod=trending_now_5#&mod=wsj_valettop_email Add a comment
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The end of the legislative session for the Year 2014 unfortunately did not provide the holiday gift most associations wished for, legislation that would have overturned the case of Drummer Boy Homes Association, Inc. v. Britton and reinstated rolling liens.

This matter will be one of the issues that the CAI Legislative Action Committee faces in the next legislative session. However, Senate Bill 602 was approved by the House of Representatives and signed by Governor Patrick as one of his last acts prior to leaving office.

Senate Bill 602 clarified an ambiguity in Section 5 of M.G.L. c. 183A regarding limited common area grants and easements. The section also adopted an overall negative posting requirement for any amendment required to the Master Deed, Declaration of Trust or Bylaws as it applies to mortgagees holding mortgages on units within a condominium whose consent maybe required. Negative posting is a useful mechanism to address situations where mortgage holder approval of an amendment may be necessary. This provision now states that if the association gives notice to mortgage holders and they do not object within sixty (60) days, then such failure to act will be deemed a consent.

Finally, although a request for further appellate review from the Appeals Court to the Supreme Judicial Court has been made by the condominium association regarding Drummer Boy, action on the appeal is not expected until the first week in February 2015.

We will continue to keep you apprized of all developments with respect to this matter as the session in the Supreme Judicial Court opens a new year.

 

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In recent years, interest-only loans earned a reputation as products that contributed to market volatility and the mortgage crisis of 2008.  These days, however, they are becoming more well regarded by economists as lenders began requiring of customers a higher than average credit score (upwards of 720) and a larger than average down payment (over 30%).  Also, the products are being offered mainly to those seeking jumbo loans rather than the average home buyer.  A Wall Street Journal Article forwarded by Attorney Rob Anctil explains in detail and is available here: http://www.wsj.com/articles/interest-only-loans-set-the-bar-high-1420567670 Add a comment
The recent dip in home heating oil prices resulting from the slowing global economy is expected to benefit borrowers.  Long term T-bills also decline under such circumstances and are a bellwether for the mortgage industry, suggesting tentative buyers reexamine their purchase and financing options.  Per the article, Closing Attorney Rick Dunn notes that rates should approach the lows seen in 2012-13.  He forwards this article as illustration:  http://www.cbsnews.com/news/another-upside-to-oils-slide-lower-mortgage-rates/ Add a comment
Wednesday’s seminar featuring real estate developer Dave Guthrie, marketing and sales consultant Tom Skahen and Princeton Properties legal counsel Jeff Brown was well received by attendees.  The audience of 65 people filled the room and consisted of real estate agents, lenders and other industry professionals who provided positive feedback regarding the topics, presentations as well as the noontime meal prepared by staff at the Westford Regency Inn and Conference Center.  Questions and answers were followed by energetic discourse among audience members over lunch.  Perkins & Anctil hopes to see another capacity crowd on April 16th, 2015 when we present a round table discussion on the topics of home financing, purchase and sale agreements, condominiums, homeowner’s insurance, title insurance and home staging. Add a comment
In light of the Canadian Express now arriving in the region, the Perkins & Anctil Real Estate Team would like to offer suggestions to buyers for properties in any of the locations listed in the attached article from the Huffington Post.  We were surprised to see certain of the cities listed as sunny vacation spots but given the subzero temperatures here in New England, might be willing to give any of them a visit.  http://www.huffingtonpost.com/kathleen-peddicord/best-property-markets_b_6424808.html Add a comment
With increasing instability in the jumbo mortgage market, experts are recommending quick action.  The Fed has suggested jumbo rates will go up in 2015 but as of yet, they remain near their lowest in years, prompting the Wall Street Journal to post an article with ideas for smoothing the application process.  Their thoughts include obtaining pre-approval, increasing the down-payment, “scouring the market” for lower rates and fees, as well as a few others.  Closing Attorney Rob Anctil has forwarded this article by way of illustration:  http://www.wsj.com/articles/tips-to-get-the-best-jumbo-rates-1419959688 Add a comment
The building at 99-105 Broad Street now houses upscale condominiums but has served a number of other purposes since its construction c. 1857.  Built for William H. Boardman, a third generation Boston merchant, to house merchandise acquired in overseas trade, the rare pre-Civil War granite and brick edifice with 5 story façade was also home to, among many others, J. Gibson & Son Liquor Distributors, Pray & Hayes Grocers, Richards Publishing Co., Dexter Bros. Paints and Howe & French, Inc., dealers in chemicals, laboratory supplies, waxes and drugs.   It is fortunate to have survived the Great Boston Fire of 1872 which burned 65 acres nearby to the south and west.  The building was recently enlarged to nine stories and is now known as the Broadluxe Condominium, a conversion that took place in 2008.  Several units are currently for sale. Add a comment

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