You’ve found your dream home and gotten an offer accepted. You’re on your way to a mortgage commitment with a bank and have even picked out your witty door mat. Now your lawyer (hopefully me) mentions something about a title exam and title insurance. You’ve probably heard of title, but what exactly is it?

In Massachusetts, home sellers must be able to convey clear and marketable title, which means there are no defects, claims, or other encumbrances on the prospective buyer’s ownership of the house. Banks, creditors, or other interested parties record documents laying out their interest in property in the local registry of deeds. A title examiner searches back at least 50 years to find if there are any loose ends to tie up, such as a mortgage that has not been discharged or a credit card company judgment that must be paid. The title exam will also reveal if there are any restrictions on the buyer’s use of the property, either from the state or the developer, or if anyone else has rights to the buyer’s property through an easement or the like.

Even with the title exam, homeowner’s title insurance is still important. The insurance policy protects against title defects that could not be revealed through a title exam or arose through mistake, such as forgery, fraud, undue influence, or clerical errors. In short, if someone knocks on your door after closing and says they really own your house, your title insurance company will protect your interest. Your mortgage lender will already require you to purchase a lender’s title policy, but that policy only protects up the loan amount, while a homeowner’s policy will cover the full purchase price. Like all insurance coverage, you hope you don’t need to make a claim on your title insurance, but you’ll be glad it’s there.

At Levine Law, we have always done our title exams in house, rather than rely on third parties. That way, we have personal knowledge of the search and can confidently issue a policy. If you’re thinking of buying a home, visit us at www.levinelawma.com today.

Many people choose to set up trusts as part of the estate planning process. The reasons vary, but it may be for tax planning, due to worries about how a beneficiary will handle a windfall (a topic for another day), or to provide for future and potentially unknown generations. Whatever the impetus, when setting up a trust, one of the most important decisions to make is who will be in charge.

Say you’ve been named trustee , or you’re wondering who to select as a trustee - it’s an honor, to be sure, but what exactly does a trustee do? A lot more than most people think, and with three areas of focus:

1. Investment - The trustee has a duty to the beneficiaries (the folks who receive funds from, or can use property of, the trust) to invest the trust property wisely and receive a market rate of return. For many people who are not finance whizzes, this is a tall order, and a trustee may choose to hire am investment professional.

2. Administration - At the outset, the trustee must inventory the trust assets, expenses, etc. As the trust portfolio changes over time, the trust terms will likely require trustee reports to the beneficiaries. The trustee must also respond to beneficiary questions in a timely manner. One of the most important administration duties is that trusts generating any gross income over $600 must also file an annual income tax return.

3. Distribution - Trusts may require distributions at certain life milestones - i.e. reaching 35 years of age, graduating from college, etc., or they may allow for discretionary distributions. A trustee must be careful to document every distribution and reasons therefore to avoid rancor, or worse, down the road.

If you are wondering whether a trust is right for you as part of your estate planning, visit us at www.levinelawma.com.

Retail liquor licenses generally come in two flavors in Massachusetts - Section 12 “pouring” licenses for restaurants and bars and Section 15 “off-premises” licenses for package stores or convenience or grocery stores selling beer and wine.

Individual applicants for either a pouring or off-premise license must be both a citizen of the United States and a resident of Massachusetts. Partnerships may be granted a license if each and every partner meet the same requirements.

Of course, most businesses prefer to have a legal entity hold their liquor licenses due to liability risks. For corporations applying for off-premises licenses, the applicant must be incorporated under the laws of commonwealth, all directors must be United States citizens, and a majority of the directors must be residents of Massachusetts. For corporations applying for on-premises licenses, the majority of directors must be U.S. citizens. LLCs are analogized to corporations, with managers standing in for directors. Crucially, there are no such citizenship requirements on stockholders (for a corporation) or members (of an LLC).

Corporate and LLC licensees for both types of licenses must also appoint a manager of record who has the authority and control to manage the licensed premises as if the licensee was a natural person. Or, in humanspeak, there must be someone at the bar, restaurant, or store who can keep an eye on things and make sure all laws are followed. This manager of record must be a United States citizen.

The attorneys at Levine Law can make the daunting liquor license application process seem like a breeze. Visit us today at www.levinelawma.com

Hearing things that go bump in the night? If you’re like us, it’s probably the radiators that you can’t quite silence or the shutters you’ve been meaning to lock down. But if you’ve ruled those out and think you have paranormal visitors, you don’t have to affirmatively disclose that “fact” when selling your house.

Mass. Gen. Law c. 93 s. 114 is a so-called “stigma statute,” forms of which have been enacted by at least half of the states. The law protects homesellers, lessors, agents, and brokers who know or suspect that real property may be “psychologically impacted” by barring purchasers or lessees from bringing a cause of action after the fact. “Psychologically impacted” is defined as, among other things, “the site of an alleged parapsychological or supernatural phenomenon.”

If you’re selling your creaky New England house, give the attorneys at Levine Law a visit. www.levinelawma.com

To read the statute in full, click here.

There’s a lot of paper in front of you when you’re closing on a house, but if a lender is involved, there’s nothing more important than the mortgage. The mortgage document makes your new home collateral on the loan, sets our your payment responsibilities, and lays out what happens if you don’t comply with the mortgage requirements.

The typical mortgage includes what’s call an acceleration clause. The acceleration clause allows the lender, if you miss a payment or otherwise go into default, to request full payment of the past-due principal and interest of the loan. If can you pay, the loan can be reinstated. If you can’t, the lender may, if it complies with all relevant notice requirements, go ahead with foreclosure on the property.

Last month, in Thompson et al. v. JPMorgan Chase Bank, N.A. (1st Circuit 2019), the First Circuit reversed the district court’s granting of the lender’s motion to dismiss because the bank’s default notice letter conflicted with the mortgage’s acceleration clause. The relevant acceleration clause gave the borrowers the right to reinstate if they paid the balance due prior to 5 days before the foreclosure sale. The bank’s notice of default, however, omitted the 5 day requirement and stated that the borrowers only had to pay before the sale.

The court held that omission was potentially deceptive and that Massachusetts law requires strict compliance with the terms of the mortgage. The borrower did not need to show any harm from the deception, as prejudice is not a requirement. In sum, the court demanded nothing but complete accuracy from the lender in a foreclosure proceeding.

You can read the full opinion here.

The team at Levine Law will guide you through the closing process and make you understand what you’re signing, from the acceleration clause on down. Visit us at www.levinelawma.com.

In Massachusetts, there’s a whole branch of tree law stating that a property owner’s rights to let their tree grow on their own land is absolute, no matter the consequence to a neighbor. In fact, this doctrine is so rooted in Massachusetts law it’s called the Massachusetts Rule, so take it or leaf it.

In Shiel v. Rowell, the Massachusetts SJC considered whether the defendants, whose sugar oak tree cast such a large shadow on the plaintiff’s land that her roof developed algae, could be forced to cut or trim the tree on their own property. However, Massachusetts courts have long held that a landowner cannot hold a neighbor liable for damage from healthy trees (although one does have the right to trim encroaching branches or roots). The plaintiff urged the court to adopt the Hawaii Rule, which allows landowners to file suit against tree owners and force the neighbor to cut branches or roots if harm has occurred or is imminent. The court declined to depart from the Massachusetts Rule because, chiefly, allowing such suits to go forward would tie up the courts with neighbors “with an axe to grind for reasons other than purported tree problems.”

If you would like to log some time with experienced Massachusetts real estate attorneys, visit us at www.levinelawma.com.

And for the full opinion with more of the SJC’s own puns, click here: Shiel v. Rowell, 480 Mass. 106, 101 N.E.3d 290 (2018)

Since the tax law changes in 2017, there has been some confusion among real estate professional on whether rental real estate enterprises can qualify for the Qualified Business Income deduction in Code section 199A. The IRS recently issued guidance on what type of enterprises qualify for the safe harbor provision. Broadly, a real estate enterprises qualifies for a 199A deduction if:

1. Separate books and records are kept for each enterprise;

2. For tax years prior to 2023, the taxpayer spends at least 250 hours performing rental services (details are in the linked Notice); and

3. The taxpayer maintains contemporaneous records documenting the rental services.

Certain rental arrangements, such as triple-net leases, are exclude from the safe harbor provision. Taxpayers that do not meet the safe harbor requirements can otherwise establish that their enterprise is a trade or business, depending on the facts and circumstances.

If you’re purchasing a rental property, make sure to speak with the attorneys at Levine Law first. Contact us at www.levinelawma.com

A recent story in the Chicago Tribune details the rise of automated valuation models (AVMs) - algorithms used to value homes based on data, such as recent nearby sales, neighborhood trends, and other information such as local permitting. A Zillow Zestimate is a example of a commonly known AVM.

When selling your home, you may be tempted to rely on a Zestimate (or similar) for your asking price, rather than seeking the opinion of an appraiser or experienced real estate agent. Because your Zestimate may include outliers, the Zestimate could under- or overvalue your home. The problems with undervaluing are obvious. But if you overvalue and find a willing buyer, your house may under-appraise the loan value and crater your deal.

An experienced appraiser or real estate agent, along with team at Levine Law, can guide you through the selling process. Contact us at www.levinelawma.com.

Most people who run their own business start off solo or working with family members. Even if your business stays that small, and especially if you are going to pay someone else, there are good reasons to incorporate or form an LLC.

1. Protect your personal assets. This is the reason most people think of forming a legal entity - to limit your liability for business debts and liabilities. Many people don’t know that to keep this protection, the business owner must follow corporate formalities.

2. Tax treatment. An LLC can be taxed similarly to a sole proprietorship while limiting liability, or the owner can elect to be taxed as a corporation. A corporation owner can be taxed at the corporate and individual levels or can elect for Subchapter-S status, if qualified. (Confused? An accountant can help with this decision.)

3. Deductible business expenses. During tax computations, both LLCs and corporations can deduct businesses expenses, including salary, before reporting income.

4. Lasting legacy. An LLC or corporation continues if an owner or management changes, whereas a sole proprietorship or partnership ends if an owner dies or quits. A legal entity is one way to ensure your business lasts longer than you do.

Need help and advice from experienced attorneys? Contact your local attorneys at Levine Law. www.levinelawma.com

This week, the Massachusetts Supreme Judicial Court held that a decedent's second spouse is entitled to a one-third share of her husband's real estate holdings and estate despite her being left out of the will.

According to the opinion, Raymond Ciani created a will in 2000 leaving his property to his wife or, if she passed, to his four children as sole beneficiaries. After his wife passed, Mr. Ciani re-married but did not make out a new will naming his second wife. Then, when Mr. Ciani passed, his second wife challenged the will and sought an interest in the estate and family home.

The SJC ruled, according to M.G.L. s. 191 c. 15, the spouse at the time of death can set aside the decedent's wishes in their will and claim a marital share of the estate. The surviving spouse may also remain in the family home for the rest of his or her life and retains a one-third life estate interest.

In a footnote, the SJC also found that M.G.L. s. 191 c. 15 is "unwieldly and perplexing to apply" and that "the history of the statute leaves no doubt that it is decidedly gendered." The SJC strongly recommended that the Legislature update the law.

You want to ensure your loved ones don't get surprises like this after you're gone. Talk to the experienced attorneys at Levine Law about your estate plan today. www.levinelawma.com

For more: https://www.mass.gov/files/documents/2019/01/08/12531.pdf

Installing solar panels on your home can be a great way to save on bills and reduce your reliance on nonrenewable energy sources. However, purchasing a solar system and having it installed can be a large upfront expense, so many people choose to lease or finance their panels to reduce or eliminate startup costs. 

You should be aware of the potential implications of a solar system lease or financing agreement before you sign a contract. The leasing company may put a lien or Uniform Commercial Code financing statement on your home in order to secure their investment. This may affect your ability to refinance or sell your home, as the lender may require the lien to be removed or satisfied, and the outstanding payments may impact your debt-to-income (DTI) ratio.

Of course, these issues are not insurmountable and can be addressed with the help of Levine Law. If you're thinking of getting solar panels installed, come see us before you sign. www.levinelawma.com

Estate planning isn't just for "the olds," you know. It may be even more important for young adults, especially if you have kids. Why?

- Choosing guardians for your children: if the worst should happen and you pass without a will, a Massachusetts court will appoint someone to take care of your children, and it may not be who you would choose. Estate planning gives you a chance to make a considered choice.

- Save your family further stress: with a proper estate planning plan, you can direct how your finances will be handled after you pass. For example, you can set up a trust for the benefit of your children and choose someone you trust to manage the funds. This will also save time, money, and court fees for your loved ones.

- Create a power of attorney and health care proxy: if you are injured or ill and can't make decisions for yourself, you can appoint someone to handle your medical decisions and sign documents on your behalf. This will allow action to be taken quickly without court involvement.

It's not fun thinking about unfortunate events, but it's a conversation everyone should have. Levine Law can offer you guidance. www.levinelawma.com