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The sporting goods retailer found itself with $10B in liabilities but only $1B in assets in January so has chosen to attempt to restructure its debt.  Competition from online shopping is to blame, say company spokespeople, putting Sports Authority in a similar situation as Radio Shack and many others.  The Englewood, CO based entity missed a $20M coupon payment to creditors which triggered the filing, during which process the company will decide whether to restructure or sell assets. Bankruptcy Attorney David R. Chenelle forwards this Reuters article with more information: http://www.reuters.com/article/us-sportsauthority-bankruptcy-idUSKCN0W416O

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Written By: Scott J. Eriksen, Esq.

The Game of Thrones fans among you will have heard the ominous words of House Stark, “Winter is Coming,” used to warn against the imminent cold and precipitation of everyone’s favorite season. Just as they do in George R.R. Martin’s epic fantasy series, these words herald an unpleasant truth for many community associations and managers alike: winter will bring bitter, freezing temperatures, ice and snow. Yet as all managers and boards know, it is the water associated with winter that has proven to be the real enemy to owners across the Northeast, particularly during last year’s unprecedented snowfalls.

Guarding against this winter, and the water, is of paramount importance to all our clients, and one area of particular vulnerability is abandoned or vacated units. Forsaken or neglected units, which may be owned by banks, often present a considerable understated threat to communities. In associations where units are conjoined or attached, freezing temperatures can burst pipes and sprinkler lines in areas adjacent to these empty units. The damage from these bursts is seldom confined to the empty unit alone, typically permeating to other units or common areas.

It is important that associations and managers identify and properly stabilize these units to avoid water damage, but access can be tricky and laden with traps for the unwary. Can the association or agent simply barge in and turn on the heat? What if the owner returns and claims (truthfully or not) that property is missing from the unit? What if that property is irreplaceable – a family member’s Medal of Honor, priceless artwork or other heirlooms? How can proactive associations and managers shield themselves from the potential liability associated with such claims?

For starters, the good news is that both the Massachusetts Condominium Act (M.G.L. c. 183A) and most condominium documents authorize associations and their agents to enter into units in order to address health and safety emergencies and to take certain preventative or remedial action. Specifically, M.G.L. c. 183A, Section 4(2) provides that “[t]he organization of unit owners, its agent or agents shall have access to each unit from time to time during reasonable hours for the maintenance, repair or replacement of any of the common areas and facilities therein or accessible therefrom or for making emergency repairs therein necessary to prevent damage to the common areas and facilities or to another unit or units...” In the face of quickly dropping temperatures, we advise clients that they may have the immediate authority to enter a unit and take necessary remedial action under the terms of the documents and applicable law.

However, very rarely if ever will the access provisions in the governing documents fully protect an association from potential claims by the unit owner related to trespass, damage to personal property or theft. The most conservative course of action to protect oneself against such claims would be to obtain a court order to enter and act. Unfortunately, however, court action is also likely be more costly and less expedient than proceeding in reliance on the provisions of the condominium documents.

If an association does not elect to obtain a court order, and intends to rely on the provisions of its documents and applicable law, we strongly suggest that the association comply with the following procedure:

  1. Send notice. The first step in the process, except perhaps in extreme emergencies, should be to send notice to the owner/bank of the intended access/preventative work. To the extent that the governing documents call for a specific time period, consider whether this is realistic in light of the threat of water damage and modify the notice as necessary.
  2. Obtain a locksmith. This will prevent damage to the unit upon entering and allow you to secure the unit afterwards, which is something that should also be done.
  3. Obtain a police detail or private security guard. An objective, third-party individual will be will be extremely valuable if the unit owner attempts to claim that the unit or their belongings were damaged or are missing. Be sure the “guard” is there to witness the entire event from opening the unit to securing it upon completion. Be sure that they see everyone entering and exiting the unit and whether or not they are carrying anything in the process. Be sure that they know you will require an affidavit, after-the-fact, stating that they were there, witnessed the entire event and can verify that nothing was damaged or taken during the process.
  4. Bring a camera. Video is best, but photographs are an acceptable alternative. Use the camera to create evidence of the condition of the unit as you found it and as you left it. Use the camera only on areas visible in plain sight within the unit and do not release the images.
  5. Minimize the personnel involved. Beyond property management and/or board members and the “guard,” limit the people involved to those necessary for performance of the required work. Be sure that any vendors document their own invoices well and enter, perform services and exit as efficiently as possible.

We realize that taking all of these steps requires time, effort and expense, and that the association may be restricted in light of emergency situations. However, we believe these steps are minimal compared with the time, effort and expense of dealing with a potential claim.

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Rhonda brings 20 years of real estate conveyancing experience to the Perkins & Anctil Real Estate Team. An alumna of Massachusetts School of Law, Rhonda will head the firm’s conveyancing group and will represent lenders, buyers, sellers, and developers in all types of residential and commercial transactions. Her work experience before coming to Perkins & Anctil was with mid-sized firms on the North Shore and in southern New Hampshire. She most recently functioned as a sole practitioner in Andover. Rhonda has also worked as an adjunct instructor of real estate law at Northern Essex Community College. She is a member of the Massachusetts Real Estate Bar Association, Greater Lawrence Bar Association and the Northeast Association of Realtors. We are proud to have Rhonda on board and believe she will be a considerable asset to all our clients.

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Attorney Charlie Perkins wanted to make readers aware of the Community Associations Institute’s efforts to assist in passing House Resolution 3700 regarding condominium construction permitting which passed the House February 2, 2016. It is now headed to the Senate. The CAI notice is as follows:

The changes to the FHA condominium project approval process are included in H.R. 3700, the “Housing Opportunity Through Modernization Act”, bipartisan legislation authored by Rep. Blaine Luetkemeyer (R-MO) and Rep. Emanuel Cleaver (D-MO).

CAI supports H.R. 3700 and has urged leaders of the House Financial Services Committee to bring the legislation to a vote in the full House of Representatives.

H.R. 3700 makes the following key changes to the existing FHA condominium project approval process—

  • FHA is required to revise condominium recertification requirements so that recertification is substantially less burdensome than initial project approval. FHA is required to consider lengthening the time of certifications and revising recertification procedures to be information updates rather than resubmitting the project for approval.
  • HUD field offices may, at the request of the submitting party, evaluate and grant exemptions to commercial space limitations and may take into consideration factors such as the number of housing units in a project as well as local economic conditions when evaluating exemption requests.
  • FHA is required to clarify permissible owner occupancy percentages for primary and secondary residences for project approval. If FHA fails to issue the required clarification within 90 days of enactment into law, the owner occupancy percentage for primary and secondary residences is established at 35 percent. FHA may establish different owner occupancy percentages based on local economic conditions.
  • FHA is required to follow Fannie Mae and Freddie Mac guidelines concerning transfer fees for condominium project approval and mortgage insurance.
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Estimates by the Boston Globe are that tax bills will increase by 4% or $206 on average in the coming quarters. Analysts point to the rising costs of municipal services as the reason, however, increasing real estate values and decreasing state aid to towns and cities are also contributing. Others suggest uncontrolled spending is responsible and must be reduced in order to maintain stable tax rates. The Globe piece contains additional graphics and tables with a great deal of detail. Real Estate Attorney Rob Anctil forwards the article with more information: http://www.bostonglobe.com/metro/2016/01/18/mass-homeowners-billed-more-property-taxes-average-this-year/I7Qr7Hp3mhn3av1gaoQUgP/story.html?s_campaign=8315

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Feeling safe in your workplace has never been more important than it is today. Your safety is a high priority for Perkins & Anctil. Please join Rob Anctil and Rick Dunn of Perkins & Anctil and Deb Bodnar of Mortgage Network for a complimentary real estate agent safety class and learn how to protect yourself during showings and open houses. The class will be taught by Luth’s Family Karate on Friday, April 17th from 4:00-5:30pm at Perkins & Anctil, PC. Perkins & Anctil PC is located at 6 Lyberty Way, Suite 201, Westford MA. You can RSVP to Nichole Cincotta at 978-496-2000 or Deb Bodnar at 978-399-1328.

 

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In the interest of trading knowledge and gathering opinions on various issues from community association residents, we have added a link to our first in a series of very brief surveys.  This one concerns smoking and how to regulate it.  Results will be summarized and discussed in a later blog post.  Blog readers should feel free to respond with thoughts, concerns and potential solutions to condominium and community association issues on the subject.  In order to submit a response, visit our home page and click the blue button on the left side.  Association managers and trustees should contact Scott Eriksen (seriksen@perkinslawpc.com) about any changes they may wish to make to their governing documents. Add a comment
The University of New Hampshire Law School has initiated the Daniel Webster Scholar Honors Program, launched in 2005, as a way of giving students experience they otherwise would have to obtain on-the-job.  The goal of being ready to practice law, and to litigate, upon graduation is now a possibility given the success of the program which was profiled in an Institute for the Advancement of the American Legal System study to be released this month.  This is not the only such program in the country, although it is one of the more well established.  Prior to such honors programs, students were less likely to have a handle on day to day legal job challenges and to require more supervision in order to reach acceptable levels of competency.  At Perkins & Anctil we have consistently hired law school students during their summer breaks.   We feel that this provides them with an opportunity to gain practical experience.  Managing Partner Rob Anctil forwards this Wall Street Journal Article with additional information:  http://www.wsj.com/article_email/law-school-program-emphasizes-practical-skills-1420419113-lMyQjAxMTE1MDEzMjYxNzIwWj Add a comment
Most buyers will opt to hire a home inspector who will examine all aspects of building maintenance and safety prior to purchase.  There are no guarantees that he or she will find all potential problems, but it is a worthwhile step to take before signing on the dotted line.  For those who are willing to get a little dirty and take on a challenge before signing the P&S agreement, Closing Attorney Rick Dunn recommends the following link with information on what elements to look out for during the house hunting process: http://www.newsday.com/classifieds/real-estate/tips-for-home-buyers-what-a-home-inspector-looks-for-1.9899810?sf7265462=1 Add a comment
Entrepreneurs seeking to enter the alternative legal service industry have been stymied in some states by fines and penalties imposed by the courts at the behest of the legal community.  Given that non-lawyer legal representation by companies such as LegalZoom and others can be the only affordable way for individuals to start a company, resolve family issues or to achieve regulatory compliance, to give some examples, it is noteworthy that many states report opposition to what is called “Unauthorized Practice” comes from those who stand to suffer from the competition.  Attorney Rob Anctil believes all should be welcome to weigh the scales of justice and forwards this Wall Street Journal article as food for thought:  http://www.wsj.com/news/article_email/SB10758858174227614679104580412102409160076-lMyQjAxMTA1NzI1OTgyODk1Wj?mod=wsj_share_email Add a comment
With a below average supply of homes for sale in most areas of the country, the availability of real estate is limited according to the National Association of Realtors.  This means the possibility of over-asking price sales is strong and should motivate would-be sellers.  Those seeking to convey real estate should benefit further by the fact that mortgage rates continue to hover at historic lows.  Closing Attorney Rick Dunn has sent this article for illustration: http://www.realtor.com/news/home-prices-up-supply-down/ Add a comment

Written by Attorney Charlie Perkins

With deference to those who remember the old Emerson Lake and Palmer Song quoted above, and with another potential snow storm pending for Saturday, February 21, 2015, trustees, managers, unit owners, lawyers and those who are endlessly shoveling roofs and plowing roads, have collectively “had it” with the weather this winter.

Hopefully spring is right around the corner, but the problems encountered this winter will not be going away any time soon.  With that in mind, we offer the following reminders to assist all of those dealing with this most memorable winter season.

1. When possible, document all areas that suffer damage from snow, ice or snow removal,  and supplement this documentation with the date and  time of said incident as well as pictures evidencing said damage.  Unless otherwise required by contract, this report should be submitted to the board, in one document, during the spring so that repairs can be discussed and initiated with the appropriate vendors.

2. Trustees or Unit Owners should ensure that all heating and dryer vents are clear of any snow or ice depending on the language in the condominium documents which establishes the party responsible for this type of maintenance.

3. It is clear that due to the severe weather conditions this winter, we anticipate that many boards will experience a budget deficiency.  In the event this does arise, we feel that transparency should be the key when addressing damage caused by the snow and ice or its removal, and the plan in place to cover the cost of these expenses.

In the short term, we recommend that boards develop a plan to pay vendors for any snow related expenses.  If the current budget does not have enough funds in place to cover these expenses, be advised that borrowing from the working capital is possible.  We are also aware that some boards may choose to borrow from another line item in their budget or in certain situations borrow from their reserve accounts. However, we advise that prior to borrowing any funds, the board should discuss a specific plan to repay these loans.   Please note that special assessments are not collectible as a priority lien pursuant to M.G.L. c. 183A and we advise that this type of assessment be avoided when possible.

Boards should consider borrowing funds from a bank, if possible, and/or raising the funds needed by creating a budget amendment over the remaining part of this fiscal year.  We recommend that in the event this does occur, the board should notify unit owners as soon as possible.

4. If you are a unit owner, we ask that you treat the professionals you contact for any repair or snow removal requests with the utmost courtesy.  Please keep in mind that vendors may be dealing with hundreds of e-mails or telephone calls on a daily basis and they need their sleep too.

5. Please keep off the roads when possible and contact your respective associations regarding snow removal policies. Perkins & Anctil, P.C. remains committed to assisting our clients during this difficult winter season.  Please feel free to contact our office so that we can assist you with any questions or concerns that may arise.

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Written by Attorney Charlie Perkins

Don’t Worry They’re Here…

Technology has a way of sweeping over the public before it is ready for regulation.  Witness Craigslist, Facebook, Twitter and Uber.

The next areas where we can expect issues to arise pertain to the use of drones.  Amazon indicated last year that it may utilize unmanned drones to deliver packages to individual residences.  There are also other entities which would like to incorporate drones into their business operations.  Real estate companies are using Drones to take pictures of their prospective listings.

Aside from concerns raised by the Federal Aviation Administration (“FAA”) and the Department of Transportation (“DOT”), there are a multitude of issues associated with drones and condominium associations.  These include landing in the common areas and any liability associated with the same.  Covenant restrictions should address concerns related to both the location and time for the use of drones on association property and determining how close to the units a drone can travel before it constitutes trespass.  Finally, will insurance companies be ready to address issues associated with the use of drones?

Our newer condominium documents contain the following provisions regarding drones:

“No drones or other remote-controlled aerial equipment, toys or vehicles shall be used       anywhere on the condominium common areas and facilities.  No unit owner shall receive            deliveries by drone.”

It is likely that as time progresses there will be governmental regulation regarding drones very similar to the regulation surrounding satellite dishes.  As we publish this newsletter, the FAA and DOT have just released proposed rules for small unmanned aircraft. These can be found at http://www.faa.gov/regulations_policies/rulemaking/media/021515_sUAS_Summary.pdf.

However, notwithstanding any of the aforementioned concerns regarding drones, in the words used by Judy Collins regarding clowns…don’t worry they’re here!

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While historically low interest rates are not expected to be available forever, rates below 4% are still available now.  Until the driving forces of commodity turmoil and low Treasury rates reverse themselves, analysts at the Housing Finance Policy Center see rates remaining at their current levels.  This is good news for potential buyers.  Attorney Rick Dunn forwards this link with more information:  http://blog.metrotrends.org/2015/02/major-forces-driving-mortgage-interest-rates/ Add a comment
Many of us have been told that Spring is the best time to sell a house, perhaps because moving is easier in warm weather.  Others believe that summer is the most convenient time to make a location change because of the school calendar.  However, a study by Redfin that was analyzed by RealtorMag shows that, between 2010 and 2014, the percentage of homes placed under contract within 30 days in Spring was 39%, only 1% over the dead of winter and a few percentage points over the other seasons.   What is more interesting is that Winter either outpaced or matched Spring as the leading season for real estate sales in 9 different markets.  Closing Attorney Rick Dunn forwards this link for more detail: http://realtormag.realtor.org/daily-news/2015/02/09/best-seasons-sell-home Add a comment

Written by Attorney Charlie Perkins

Unfortunately there have been contractors in Massachusetts requiring subcontractors and other parties to alter insurance certificates in a way that misrepresents the actual coverage provided under the insurance policy.

 

Governor Patrick, prior to leaving office, signed into law Senate Bill No. 2402 which Amends M.G.L. c. 175K by adding a new section which addresses Certificate of Insurance.

 

The new legislation has three important aspects:

 

  1. It prohibits any person from preparing or issuing a Certificate of Insurance that contains false or misleading information concerning the underlying policy, one that purports to alter, amend, extend or one that purports to alter, amend, and extend coverage of a policy.
  2. This bill also now applies to third parties. According to Daniel Foley, Vice-President of Government Affairs and General Counsel at the Massachusetts Association of Insurance Agents, general contractors and lenders make unreasonable requests to insured parties which result in the alteration of the Certificate of Insurance.
  3. The law provides that a Certificate of Insurance is distinct from an insurance policy and specifically states that a Certificate does not alter amend or extend an insurance coverage or independently confer rights on any party requesting such a certificate.
If you would like to receive a copy of the new law, please contact Nichole Cincotta @ ncincotta@perkinslawpc.com

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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

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