Mass law

1031 tax avoidance/exchange

"Like kind properties" Exchanging properties with somebody else

Commissions and Tristam's landing

A broker is only entitled to a commission when the following conditions are met: The broker produces a ready willing and able buyer on terms set by the owner The purchaser enters into a binding contract to purchase The purchaser completes the transaction by closing in accordance with the provisions of the contract. Exceptions: if the seller defaults or it is the sellers decision not to complete the transaction. The seller and broker can agree in a written listing how a forfeited deposit could be split

Disclosed Dual agency The process for Dual agency is: Disclose, consent, notice (dog cat no)

A broker may represent the buyer and seller on the same property as a disclosed dual agent. The agent must treat each equally and honestly but the clients cannot expect the duties of obedience loyalty and full disclosure. The broker is still obligated to confidentiality and accountability. The broker must obtain the written consent of the buyer and seller for dual agency at no later than the time when do agency is identified. Undisclosed dual agency is illegal.

Tidal water

An owner whose property abuts title water owns the land to the mean lower waterline or 100 rods below the mean High water, whichever is less. The land between the high and low water is reserved for public use and is regulated by the state.

Disclosure issues

1. Licensee must disclose all facts to a buyer or prospective buyer that might influence their decision to buy whether or not the buyer asks. Example: water in basement, leaky roof. 2. A previous sale that was a boarded by a perspective buyer due to the content of the home inspection must be disclosed to all subsequent prospective buyers. 3. Such material facts that a broker should reasonably know must always be disclosed to a prospective buyer. 4. Sellers agent must disclose all such facts about the property even if seller advised broker in confidence, example roofing problems, wet basement, zoning violations, underground oil tanks and structural problems. 5. Affirmative disclosure generally limited to licensees. Sellers only affirmative disclosure obligation relates to presence of lead paint. Lead was before 1978

Fair housing notice posted in office

1st offense - $100 fine 2nd offense within 60 days up to $1000 MCAD Massachusetts commission against discrimination Filed within six months Commission may award up to $2000 in damages. Suspend real estate license: 60 days first offense 90 days for 2nd offense within two years Appeal to Massachusetts Superior Court

21 E certificate pertains to hazardous material

21 E. certificate: certifies a commercial property is not contaminated

Return of deposit/release of escrow deposit form signed by both parties. A rejected or withdrawn offer:

A rejected or withdrawn offer requires return of the deposit to the buyer (offeror) Both buyer and seller must agree when money is to be removed from escrow. A dispute requires a court order or settlement by the parties. It is not at the discretion of the broker. The deposit money has nothing to do with the brokers commission.

Security deposit's require

A statement of condition to be given to tenants within 10 days of rental beginning. The security deposit must be put in an escrow account. The lesser of 5% or prevailing rates must be paid on security deposit and last months rent. The interest must be paid to the tenant within 30 days of annual tenancy renewal. If the last months rent is not put in an escrow account then 5% must be paid. A landlord may initiate termination of a rental agreement if a tenant fails to pay rent within four days after the schedule due date but can't charge a late fee until 30 days late. If a landlord has established a year to year tenancy, he must provide the tenant with at least 30 days notice before seeking an eviction. Tenancy for years.

Statutory requirements governing activities of licensees

Advertising: a broker shall not engage in false or misleading advertising Blind advertising: a broker must include the name of the broker not just a PO Box it must include telephone fax email or street address Salesperson ads: salespersons are prohibited from advertising under their own name No discriminatory advertising

Home inspection pamphlet

All agents (and sellers if not using an agent) must supply a buyer with a copy of the home inspector "facts for the consumer" brochure.

EPA regulates (environmental/lead) April1,2010

All properties built before 1978 when renovations, repairs or preparing for painting. (EPA pamphlet "renovation right: important lead hazard information for families, childcare providers in schools) Landlord must give notice to tenants and lead hazard pamphlet Licensed contractors certified and use the lead safe practices. 1. Contain area. 2. Minimize dust. 3. Clean thoroughly. Agent should only recommend certified and trained contractors.

Carbon monoxide

All residential dwellings with a potential for carbon monoxide must have a CO detector on every habitable level of the residence, including habitable portions of basement and attic's and must be located within 10 feet of each bedroom door and must pass inspection before transfer. Battery operated are acceptable for properties constructed before December 21, 2006. After that date, hardwire detectors are required Combination smoke and CO detectors must have a voicemail into indicate which along with being activated.

Condo super lien law

Allows the condo association to collect up to six months of fees and taxes and municipal debts before the mortgage obligation is paid

Tax stamps/round up to the nearest 500

Also called documentary, recording, exercise, revenue, transferable convenient stamps. Typically paid by the seller/grantor Inaccurate tax stamp calculation does not affect validity or the transfer Stamps are only a function of the recording procedure $4.56 per 1000or $2.28 per 500 Barnstable County is $5.70 per $1000 and $2.85 per 500 Dukes and Nantucket 2% land Bank fee When assuming the mortgage with a cash payment to the owner the taxable amount is only the cash payment rounded to the nearest 500

Agency disclosure

An agent must give a prospective buyer or seller a Massachusetts agency disclosure form Massachusetts mandatory licensee - consumer relationship disclosure on the first personal meeting to discuss a specific property. The broker must request that the prospective buyer or seller signed the notice and provide an original to them and keep a copy for three years from the date of notice If the prospective buyer or seller refuses to sign, the broker indicates the date and the reason, if any, given by the person. No written notice is required at an open house so long as the broker, by sign or poster or marketing materials, must disclose the agency relationship more conspicuously than any other written terms. disclose who you represent/sign-up sheet.

Other hazardous issues

Asbestos, if broken Chlordane, mold, radon. Dioxins - unwanted byproducts of industrial processes. Mercury - methyl tertiary butyl ether, or MTBE water soluble -as in gasoline Polychlorinated biphenyl, or PCB: Once widely deployed as coolant fluids in electrical apparatus and carbonless copy paper. ** all must be disclosed but the presence does not prevent the sale

Homestead exemption's

Automatic $125,000 protection. $500,000 protection if he filed with the registry.

Types of license

Broker and sales person. Corporate vs. individual: An entity other than a sole proprietor engage in brokerage must hold a broker license in the organizations name and a designated officer/partner must also hold a broker license. The broker of record may not work independently without written permission of the entity. Broker's license in own name and a broker license in the entities name. Resident and nonresident: A resident agent must maintain a legal residence in the Commonwealth. A nonresident may be licensed if they file a written power of attorney with the chair of the board to except legal summons issued to the non-resident.

Maintenance of place of business

Broker will notify board of location and any address changes Broker must notify board of relationship of all licensees. All licenses conspicuously displayed in usual place of business or branch office. When two or more brokers (different companies)occupy the same business offices, the board must be informed of their non-financial contractual relationship. A broker operating under a business or a tradename must indicate the propose name to the board.

Duties and power of the board

Conduct examinations Examination of records Hearings and appeals Suspend, revoke, refuse to renew license and reinstate.

Lead paint removal credit

Credit for bringing the property into full compliance equal to the lesser of the cost of the leading or $1500 per unit. For interim control the credit is equal to the lesser of 1/2 the cost or $500

Handling of money's /escrow account (trust account)

Deposits must be immediately deposited. The broker is responsible for such money with proper accounting but has no personal claim to it. The account can be interest or non-interest-bearing. If it is interest-bearing the parties agree who gets the interest. Separate accounts are not necessary for each deposit. The only person legally entitled to hold the deposit is the seller; usually the parties agree the broker will hold it in escrow until the closing. Sales person must immediately turn over all deposits to the broker. No salesperson shall at anytime hold client funds. Broker cannot bring uncashed checks to closing. Broker cannot commingle escrow with brokers own account.

Legal action concerning licensed agents

Does not affect any contract between a buyer and seller negotiated by unlicensed person.

Ownership of property by a married couple is presumed to be tenancy in common not tenancy by entirety unless specified otherwise in the deed

Fed= tenancy by entirety Mass= tenancy in common

Fair housing enforced by HUD housing and urban development

Federal: race, color, religion, national origin, sex, disability/handicap, HIV/AIDS, family status.

Mass chapter 93A consumer protection

Enacted in 1967 to prohibit unfair and deceptive business practices and revised in 1969 to allow for private individuals to bring suit. Allows for private individuals to bring suit. Grieved party required to provide 30 days notice to offending party of intended legal action/30 day demand letter. Allows for any monetary award that may be granted to the grieved party to be doubled or tripled at discretion of the court. A real estate agent can be liable for up to three times damages but generally not the seller. (Treble damages for three times plus attorney/ court costs.) A broker can be held liable if the broker fails to disclose a material defect with the property. A buyer can sue a broker under mass general law chapter 93 if the broker fails to disclose the material defect with the property - EVEN if a home inspection was conducted.

Escrow documentation Release of escrow funds/escrow release form signed by both parties

Escrow record must indicate the date and from whom the broker receive the money, date deposited, check number, date of withdrawal and name a person receiving it and any other pertinent information. A record and copy of each check must be kept for three years from date of issuance. The form of deposit must be clearly noted in the offer and purchase and sale (cash, check, money order etc.) All funds and records are subject to inspection by the board

Surety bond

Every broker (not salespersons) individuals and other entities, active and in active must file a $5000 surety bond with the board for the benefit of the person harmed. The bond is provided by the bonding company (surety or obligor) for a fee paid by the broker (principal) to be made payable to the Commonwealth of Massachusetts (oblige) and collected by the board. The bond cannot be used to defray legal expenses incurred by the action. The bond must remain current in order to maintain active or in active status. * an LLC or LLP must also have errors and omissions insurance.

Out of state property

Filing requirement: no broker shall offer for sale in Massachusetts an interest in real property which is located in a land development (unimproved land) of another state unless the owner/developer registers such property with the board and pays a fee. Such registration shall be renewed annually. Inspections: The board may inspect such project, the cost borne by the owner/developer. The board shall issue a report kept on file with the board and maintained by the owner/developer during the time the development is registered and for one year thereafter. Advertising: Once the board registers the development, the owner/developer must note the fact in all it's subsequent advertisement in the Commonwealth. Sale by broker: The development must be offered for sale and sold by a licensed Massachusetts broker. Such broker shall notify the board in writing of such status within seven days of excepting the client.

Board of registration of real estate brokers and salespersons

Five member board appointed by the governor: One of the members named chairperson by the governor. Five year term with one term expiring each year. Consists of three members being licensed brokers with at least seven years of experience and two members represent the public. All members serve without pay. Board meets a minimum of four times a year wherever it chooses. At least three members must be present (quorum) to conduct a valid meeting. All receipts in revenue go to the treasury; board expenses are part of the annual Massachusetts budget.

Massachusetts: MCAD mass commission against discrimination

Includes: All of the federal, plus: Children, age, ancestry, Vets/members of armed forces, marital status, public assistance, sexual orientation, gender identity, genetic information.

Exemptions to licensing

Individual acting for themselves (for sale by owner) Salaried employee/property manager Auctioneer Trustees Public officer/employee Power of attorney Attorney acting for a client/ court appointee Bank/credit union Insurance company

Unclaimed estates

Is cheat to the state after 20 years. died without a will

Lead paint - prior to 1978

Landlord/The property must be brought into compliance where a child under 6 years of age will reside. The lead paint notification and certification form must be given to a new tenant. No parent waiver is allowed. Seller/perspective buyers must be notified of their rights prior to signing a purchase and sale. The buyer has a 10 day right to inspect for a lead but may waive this right. The buyer has 90 days to bring the property into compliance if a child under 6 resides there.

A legal will requires at least two witnesses neither of whom can be a devisee

Legal will in mass

Scenic roads

Protects trees in stonewalls

Office system/to ensure the confidentiality of all client under designated agency

Locked files for confidential information that is only by the appropriate agent Office meeting discussions should focus on properties only and not people Mentor should be designated agency for the agents clients All notices are subject to inspection by the board of registration.

Privacy and security laws

March 1, 2010 WISP - written information security program Required processes if you receive, store, maintain or process personal information. Personal information defined as: name, Social Security number, credit or debit card, personal ID or password to access financial account Exception if info is publicly available. Must safeguard all paper, electronics, computers and portable devices with personal info. Breach of info - business must notify office of consumer affairs. Must contain nature of breach, number of mass residence affected, and any steps taken. Attorney general may bring action to cure and relief.

Chain of title

Marketable title generally requires 50 years of an unbroken chain of ownership.

Laws of dissent and distribution

Married with surviving spouse No children or other relatives 100% to spouse Married with surviving spouse Yes children 50% to spouse 50% shared by children Married with no surviving spouse Yes children Children share equally Unmarried with no children Yes relatives 100% to father, mother, brothers, sisters or other relatives Unmarried with no children No relatives 100% to Massachusetts by escheat

Condo conversions

Mass condo law states tenants have one year to vacate, seniors over 62, disabled, low and moderate income, two years. May be extended if they cannot find comparable rental housing in the same city or town. Tenants also have 90 days to purchase at the same terms that will be offered to the general public. Cities and towns may have different rules.

Stigmatized property law

Mass law specifically excludes from disclosure requirements, non-material defects identified as psychological impacts unless asked. Murders, death, suicide, ghosts

There is no statutory right of redemption after the title has passed.

Mass recognizes the equitable right of redemption

Environmental laws CERCLA (comprehensive environmental response compensation and liability act)

Massachusetts CERCLA = "Massachusetts oil and hazardous material release prevention and response act" Pollution lien if cleanup as needed Presidents over mortgage - lien 21 E certifies a commercial property is not contaminated

Electronic signatures

Massachusetts uniform electronic transactions act. MUETA DotLoop docusign./each person needs an email to sign electronically. Electronic signatures cannot be denied legal effect Exceptions include wills, trusts, adoption, divorce and other court documents. Feldberg vs. Cosall (May 22, 2012) applied MUETA to email communication. It involved a series of emails with the last email attaching a revised, but unsigned offer to purchase, creating a binding agreement. The judge ruled that the email signature block or that the "from" portion of the email may constitute a valid electronic signature. Recent cases are indicating that text messages may also constitute a valid signature.

Fuel storage

Maximum storage 10,000 gallon tank, except for water. Unless underground with permit from the fire marshal, annual inspection for a fee. Above or below ground requires a permit from fire department. Leak detection system. Tanks in service after January 1, 1991 notified department of public health within 30 days of putting in use. Unless a residential tank of 1100 gallons or less. July 1, 2010 residential oil heat - supply line with nonmetallic sleeve and safety valve. In practice, most cities and towns require on used oil tanks in basement to be removed before closing a sale.

Reciprocity

Means one state honoring the licensee of another state

Age/CEU's

Must be 18 years old or older A real estate candidate with a criminal conviction must pass the exam and request permission from the board, the determination is on a case-by-case basis. a person cannot hold a brokers and salespersons license at the same time. Renewal: License is a renewed every two years biennially on the agents birthday, except that the first license is from the date of passing the exam to the licensees third birthday. Brokers & salespersons must complete 12 hours of continuing education/no exam within the renewal period To maintain an active license or reactivate an in active one. 12 hours Every two years online or in person. If an agents license goes in active, they still may make referrals to an active broker. Renewal fee: Brokers: $142 Sales person: $103

Mechanics lien

Must be filed within 90 days to be valid

Property condition statement

Not required in mass. However, if the seller completes this form, he must disclose everything he knows about the property.

Without licensure/ acting as a sales person a broker

Punished and find not more than $500 by a court of law

Handling of documents

Present all offers and counter offers written or verbal Distribute signed contracts to all parties

Americans With Disabilities Act (ADA)

Prohibits discrimination on the basis of disability in employment, state and local government, public accommodations, commercial facilities, transportation, and telecommunications. This covers employers with 15 or more employees.

Property taxes

Properties in mass are assessed annually fiscal year is July 1 to June 30 Tax is due: November 1st and May 1st but they may be collected August 1st November 1st February 1st and May 1st. If a property owner feels the property is unfairly assessed they must first pay the tax and then file for an abatement. The taxi is a priority lien against the property Nonpayment could cause tax auction/sheriff sale. Absolute title not given to municipality. (The right of ownership) Right of redemption within one year by paying taxes and interest.

Scenic Rivers act - clean water act

Protect wetlands

Rental tax deduction

Renters of a primary residence in Massachusetts are entitled to an income tax deduction equal to 50% of rent paid to the landlord with a maximum deduction of $3000

Fuel lines chapter 453, acts of 2008

Residential properties heated with oil must have the fuel supply line covered with a continuous nonmetallic sleeve and have a safety valve installed at the tank. some exceptions apply.

Smoke detectors

Residential sales require a smoke detector certificate signed by the local fire chief. 1-2 units may have battery operated with one on every level, outside the bedrooms and at the top of the stairs. 3-5 units may have battery operated outside the bedrooms and hard wired in the common areas. 6 units or more hard wired (no battery operated) Photoelectric detectors are needed within 20 feet of kitchens and bathrooms. Photoelectric detectors use a light beam to detect the presence of smoke

Renewable energy credit (solar)

Residential, owner occupied owners, who are not dependent on another taxpayer are allowed a credit equal to 15% of the net expenditure for renewal energy source or $1000 which ever is less. extra tax credits maybe carried for three years if the tax liability is in excess of the credit.

Coastal zone management act and ocean sanctuaries act

Restrict coastline development out to 3 mile limit

Broker/salesperson relationship

Sales person cannot sue principle/seller. Your money is coming from the broker you can sue the broker.

Eligibility for licensing/classroom instruction

Sales person: prior to June 1, 2011, the requirement was to complete 24 hours of classroom at an approved school and pass the written exam. the requirement is now 40 hours of approved glasses and pass the written exam. Broker: Prior to June 1, the requirement was to complete 30 hours of classroom course work and be active with a broker for a minimum of 25 hours per week for one year in a two-year period immediately prior to application for the required exam. These requirements are now 40 hours of classroom and three years of experience and pass the exam 3yrs = 25 hours per week plus 40 hours of class & pass exam.

Appraisers/4 classifications in mass

State certified general/all types of real property/3 years State certified residential/certain residential property/3 years **State licensed/minimum requirements set out in title XI (FIRREA)/3 years Real estate appraisal trainee/no exam/renewable only once

Short-term vacation rentals

Security deposit rules do not apply for a rental of 100 days or less that is for vacation or recreational purposes. Exemption: renting for less than 30 days lead paint vacation disclosure. As long as paint is in tact and not chipping. There are three lead disclosure's found on dotloop: Sale lead disclosure Tenant lead notification Vacation lead disclosure

Title V septic/ regulated by EPA and local board of health

Septic system: Septic tank Distribution box Soil absorption system Cesspool: Pipe runs from structure to single pit. Inspection required at sale or expansion. Results to Board of Health within 30 days/Copy given to board Field system repaired within two years regardless if not sold. Must meet maximum feasible compliance Mass housing finance home improvement program (low and moderate income) Tax credit up to $1500 per year/max $6000 Inspection required within 3 years prior to sale. (Demonstrate and document that it was pumped/it is 3 years if pumped annually) Up to six months after if weather prohibited Expansion of footprint or bedrooms Does not apply with a refinance

Timeshares

Sold in weeks 52 owners of one unit.

Temporary licenses on death of broker

Sole proprietor: upon application by a legal representative, board issues a temporary, non-renewable license to that person or someone else designated by the board. The temporary license requires a fee and bond in is effective for not more than one year from the date of death. Corporate entity or any entity other than sole proprietor- upon death, disability or severance of sole designated person, the entity may continue for one year if it diligently tries to find a qualified replacement.

MGL 6D certificate

States the unit owners fee balance of payment certificate is required to determine if the unit is free of association liens.

Residential landlord/tenant relations

Tenant fee disclosure form: at first personal meeting Keep for three years Copy of checks No fee if tenancy not created unless in writing Only first month last month and one month security and lock the are allowed No pet fee or other fees are allowed The landlord must issue a 14 day "notice to quit" to the tenant before taking any court action. If an evicted tenant fails to remove his property from the premises, the belongings may be placed in storage by the owner.

Designated agency Disclose, consent, notice

Two agents from the same agency one representing the buyer and one representing the seller. The process for designated agency is disclose, consent, notice.

Board procedures

The board or the agents has the power to conduct public hearing upon written complaint or its own initiative with reason: At least 10 days written notice before the hearing and a copy of the complaint or charges must be sent to the accused/agent. Records maybe ordered by subpoena and witnesses summoned. The party/agent has a right to counsel and to cross-examine the witnesses but is not legally entitled to an attorney. The complaint must be in writing because the agent has the right to confront the accuser. Meetings are held any location of the boards choosing. Unfavorable decisions may be appealed within 20 days to a Superior Court. While under appeal, license must be forwarded to the board within seven days of receipt of notice of suspension or revocation. (Turn in license)

McCarthy vs. Tobin 1999

Under certain conditions, an offer to purchase may be considered a contract even if the offer states it is subject to the execution of a purchase and sale agreement acceptable to the buyer and seller

20 years

The minimum required time to establish easement by prescription or adverse possession

Mortgage discharge

The mortgagee, (lender)must record and effective discharge within 45 days every seating full pay off funds. Mortgagor=buyer

Right of redemption

The owner of the property has six months from the date of the tax sale to redeem the property (statutory right of redemption) if no redemption is made within one year of the tax sale the new owner can ensure title by bringing an action in land court to register the title and confirm ownership. Land court/Torrens system

Mass license law/ethics

The purpose of the law is to protect the public interest. legislature enacts the law and the board or its agents promulgates (to make widely known) and administers the law.

Right of election/ dower & curtesy

The surviving spouse may choose a life estate of dower in Lieu of the descent and distribution

Active experience

The year of active experience begins when the board is notified in writing of the sales persons affiliation with the broker. The broker is responsible to notify the board of all affiliations and terminations

tax sale

Unpaid real estate taxes become a lien on the property as of January 1 of the year of the assessment. The lien includes the taxes owed and other fees and charges. Taxes that are not brought current within two years maybe collected by a tax sale of the property.

Wetlands

Wetlands restriction act Department of environmental protection No encroachment lines

Smoke detectors- new law December 1, 2016

When homes built before 1975 are sold, they must replace nonworking detectors with 10 years sealed lithium battery powered smoke alarms

Conflict of interest

an agent must disclose in writing any personal financial interest or that of Kin any real estate transaction. Kin includes by blood, marriage or business Association. They must also receive written acknowledgment of the disclosure An agent shall not lease or buy, directly or indirectly property when the agent represents the owner without first disclosing the interest to his client