Blog Archive

Wednesday, September 20, 2017

Vinnie Appreciates the Finer Point of Title Exams

My cousin Vinnie, the suburban real estate attorney, joined the gang in the Man Cave for a recent Patriots’ game. He brought some
terrible beer, suitable for his own personal consumption; which was fine because nobody else wanted to drink it. I am sure the smoked brisket made the beer taste better, because smoked meat makes everything better. After the victory, Vinnie hung around with the die-hard football fans to watch “Red Zone” and eat cookies. Only then did he start regaling us with stories from his small town practice.

“Paulie, I don’t know if you have noticed, but it seems to me that our brothers and sisters of the bar have upped their standards when it comes to reviewing title exams. I have been very pleased to see more requests that sellers need to obtain confirmatory discharges, or need to record missing trusts and cure deed descriptions. Until a few years ago, it was as if we were expected to accept anything, including discharges from the first cousin of a mortgage holder, but now that things have settled down, it seems that there is more attention to detail and a greater expectation of precision.”

I told Vinnie that I had notice the same trend, and I told him about a deed that came across my desk last week from the assignee of an assignee of a foreclosing entity, with one of those crazy long names with a “certificate series number” signed via POA, and the POA may have provided authority to execute and deliver deeds, but for some reason the drafter of the POA did not know how to type the words “and execute and deliver deeds”.

Vinnie declined an offer for a taste of some Eagle Rare bourbon and held on to his crappy beer. “It’s a conundrum.” Vinnie continued. “If three owners ago a trustee’s certificate was not perfect, and all the trustees died, but the title was buttressed with attorney’s affidavits, certificates of appointments and acceptance, a new certificate plus the passage of ten years, I suppose you can complain that the title is not perfect, but somewhere you have to apply a reasonableness standard. On the other hand, if the parties are alive and available to sign corrective documents, I will usually insist that we obtain and record corrective documents; and I usually end up drafting all the corrective documents and confirmatory deeds.”

Vinnie continued: “And, the other thing that is happening is that subdivisions that sat dormant since the Great Recession are coming back to life. But unfortunately the land owners are attempting to sell expensive lots only to discover that the septic regulations have changed, or the wetlands have migrated, or Orders of Conditions have lapsed. On more than one occasion I have seen land owners attempt to sell pricey lots, but in the course of my title exam I found conditions of approval that were long forgotten by the seller/developer, including lapsed special permits, and missing easements or restrictions that still require review by learned town counsel. Talk about delays to the closing!”

My buddy Chip told us to stop talking shop, and pay attention to the games. He had a point. There would be plenty of time to contemplate the fine details of a 2” thick title exam on Monday morning.

A former REBA president, Paul Alphen currently serves on the association’s executive committee and co-chairs the long-range planning committee.  He is a partner in the Westford firm of Alphen & Santos, P.C. and concentrates in residential and commercial real estate development, land use regulation, administrative law, real estate transnational practice and title examination .As entertaining as he finds the practice of law, Paul enjoys numerous hobbies, including messing around with his power boats and fulfilling his bucket list of visiting every Major League ballpark.  Paul can be contacted at

Monday, September 18, 2017

Short-term Rentals Create Ongoing: Concerns for Condo Associations

The short-term rental of residential property is producing long-term concerns.  Those concerns, which were just emerging when I wrote about this issue three years ago, have grown exponentially as short-term vacation rentals have ballooned, creating what is now a $34 billion business and triggering an
avalanche of conflicts and complaints to which the governing boards of condominiums, municipal officials, and lawmakers are all beginning to respond.

At the federal level, a group of senators concerned about the issue have asked the Federal Trade Commission to investigate the impact short-term rental companies are having on local housing markets.

Closer to home, the Cambridge City Council recently approved an ordinance requiring condominium owners and tenants who rent their units on line to register the property with the city, and to obtain permission from their condominium association or landlord before doing so.  The ordinance also requires “hosts” to live in the same building or a building adjacent to the one in which they are offering a short-term rental unit. 

Other communities have also been eyeing regulations to deal with the business.  The Massachusetts Department of Health and Human Services has suggested that short-term rentals should be regulated like bed and breakfasts; Boston officials have been studying that idea for some time, but haven’t yet acted on it. 

Legislative Action
The state Legislature also hasn’t addressed the issue yet, but is being urged to do so.  Gov. Charlie Baker has proposed legislation that would impose a tax on short-term rentals.  A measure introduced by Rep. Aaron Michlewitz, who chairs the Committee on Financial Services, would also tax rental income and would, in addition, require owners to  obtain a state license and comply with a number of health, safety, and insurance requirements.
While hotels are concerned about the impact on their business, condominium owners are concerned about the impact on their communities when residences become hotel rooms and their neighbors become an ever-changing parade of hotel guests. 

Security, wear and tear on common area spaces and amenities, rowdy behavior, and the vacation atmosphere created by transient residents are the major complaints.  Not surprisingly, these complaints have ended up in the courts, which, also not surprisingly, have differed in their responses. 

Commercial or Residential Use?
The key legal question in most of these disputes has been whether short-term rentals represent residential or commercial use of residential property.

The Massachusetts Land Court concluded in a recent decision (Robert S. Lytle vs. Alana Swiec, et. al.) that the short-term rental of a summer cottage in Hull violated zoning regulations barring commercial uses in neighborhoods zoned for single-family properties.  The court upheld the Zoning Board’s ruling that the rental did not constitute an authorized “accessory use” of a residential property.

A Kentucky appeals court concluded similarly (in Vonderhair v. Lakeside Place HOA) that short-term rentals of units in the condominium community violated residential use restrictions in the HOA’s covenants.

But the Washington State Supreme Court reached the opposite conclusion, ruling (in Wilkinson v. Chiwawa Communities Association) that the determining factor was not how long a property was rented to tenants, but how the tenants used it.  According to the court, the tenants were using the property for eating, sleeping and other purposes, consistent with its residential use.

A Florida Appeals Court used similar reasoning in a decision earlier this year (Santa Monica Beach Property Owners Association, Inc. v. Acord) rejecting a condo association’s effort to prohibit short-term rentals. The association argued that language in the covenants mandating residential use precluded the rentals.  But the court said:  “The critical inquiry is not the duration of the tenancy, but the character of the actual use of the property by those residing thereon.”

Significantly, the Florida court also noted the absence of language in the covenants specifically barring short-term rentals.  “The need for explicit language in the covenants is particularly important,” the court said, “where the use in question is common and predictable, as is the case with short-term rentals of houses near the beach to vacationers.”

Words Matter
The court’s admonition underscores the advice we offer our condominium association clients:  If you want to prohibit short-term rentals in your community, do so specifically and explicitly through language in your governing documents.  If your documents don’t contain that language, persuade owners to amend the master deed or the bylaws to add it.

As the court decisions quoted earlier indicate, restricting the property to residential uses may not be sufficient; the restrictive language should specify a minimum acceptable rental period. We suggest no less than 30 days.  We also recommend requiring owners to rent the entire unit – not just a portion of it.  This would preclude an owner with a three-bedroom unit from renting the two extra rooms to paying guests. 

Regulating Rentals
It is also possible that many owners – and possibly a sizable number of them – are already renting their units to vacationers or want to preserve the option to do so.  Before taking or recommending any action, condominium boards should assess owners’ preferences.  If owners don’t want to prohibit short-term rentals, the board should establish policies and/or amend the condominium documents to adopt provisions which ease some of the negative impacts involved. We suggest, among others:

*  Require owners (or an owner’s agent) to meet renters personally at the property for each rental.

*  Require owners to explain association rules to tenants and to verify that they have done so.

*  Require owners to have insurance that will cover their guests.  Check with the master insurance             carrier to make sure the use does not constitute a commercial use.

*  Have written policies describing the obligations of owners who rent their units.  

(Mark S. Einhorn is a Partner with Marcus Errico Emmer & Brooks which specializes in condominium law, representing clients in Massachusetts, Rhode Island and New Hampshire.)

Friday, September 15, 2017

Common Title Problems

Guest speakers Susan B. LaRose, VP and New England Underwriting Counsel at WFG National Title Insurance Company, and Michael E. Powers, Title Counsel at CATIC,  discuss 184-35 Trustee Certificates, docs that need to be executed under oath (184-35's and 65C's), missing tenancy in grantee clause of deed, reliance on MLC's to release tax takings, assessments, etc., rights of first refusals & other caveats hidden in condo docs, what you need to see in a deed regarding release of homesteads, wrong recitation in grantor/grantee clauses involving Trusts and entities, how a Deed should be drafted and executed when being signed under POA, etc.

Wednesday, September 6, 2017

“Still a Free Act and Deed”

By Edward J. Smith

It is elementary under Massachusetts law that the grantor of a deed must acknowledge that he has executed the instrument as his free act and deed, or in the words of the statutory form in MGL c. 222,
Section 15 (as appearing in St. 2016, c. 289, sect. 6), “that (he) (she) signed it voluntarily for its stated purpose.”  In order that notice of the conveyance shall be given to all the world, a certificate reciting that the grantor appeared before a notary and made such acknowledgment must be attached to the instrument in order to entitle it to be recorded. M.G.L. c. 183, § 29.  The certificate of acknowledgment furnishes formal proof of the authenticity of the execution of the instrument when presented for recording.  McOuatt v. McOuatt, 320 Mass. 410, 413 (1946)

Some of the most important jurisdictions for commercial and consumer transactions do not require the same statement of voluntariness in the notary clause that is part of the certificate that is prescribed in M.G.L. c. 183, § 29.  For most jurisdictions the obvious purpose of a notary clause has long been to confirm the identity of the party signing the document – most often by production of a valid driver’s license, in the presence of the notary.  However, a failure to have included a specific recital of a “voluntary act,” for a Massachusetts-related document executed in another jurisdiction can be fatal if challenged in MassachusettsSee In re Shubert, 14-01220-JNF (Bankr. D. Mass., Aug. 19, 2015); and In re Resnikov, No. 14-10589-FJB (Bankr. D. Mass., Mar. 29, 2016).  Moreover, some lenders prohibit revisions of any kind in their printed documents.  Thus, it can be problematic to change a notary clause in a lender’s printed document in order to include a voluntariness statement, even if the document is to be executed in Massachusetts.    

One suggestion has been to legislatively give full faith and credit to a document in which the form of acknowledgement in a notary clause complies with the law of the jurisdiction in which it is executed.  Would Massachusetts attorneys and title examiners need to be familiar with the requirements for notary clauses in other states?  Would such a recognition provision create a burden for personnel at the Registry counters to police acknowledgements from other jurisdictions?  The answer to both questions is probably “No.” 

Still, REBA’s Legislation Section opted to propose legislation that would simply remove the requirement to use the voluntariness language (or “free act and deed”) in an acknowledgement, but would retain the recital in the notary clause that confirms the identity of the signatory on the instrument.  In effect, this legislation would also validate notarial acts in other jurisdictions that do not include the recital of a voluntary act in the prescribed notary clause.  It would not weaken the requirement in Massachusetts that the notary must ascertain that the person signing the instrument or document was doing so as his/ her voluntary act and not under duress of any kind.  M.G.L. c. 222, sect. 16(a)(iv) prohibits a notary from performing a notarial act if, “in the notary public’s judgment, the principal is not acting of the principal’s own free will.”  That section would be unaffected by the proposed legislation. 

No fewer than 40 states have adopted the practice in the Uniform Law on Notarial Acts that does not include a reference to voluntariness in a notary clause.  Research that was available to the Legislation Section revealed that virtually all of the jurisdictions that do not require the notary affirmatively to confirm voluntariness have a statutory prohibition, similar or identical to ours, that prohibits the notarization of a signature that the notary believes is made under duress. 

This legislation, Senate Bill 811, would not make it more difficult to challenge in court the voluntariness of the act of a person who has signed an instrument or document.  The recital of “voluntary act” is no more than prima facie evidence, rebuttable by evidence to the contrary.  The most salutary effect for Massachusetts from passage of the proposed legislation would be to validate the acknowledgement in a deed that occurred in a state that did not include the recital of a voluntary act in that state’s prescribed notary clause.   

S.811 was filed by Senator Cynthia S. Creem.  A public hearing on the legislation will be held by the Joint Committee on the Judiciary at the State House on September 12, 2017.  Letters of support may be sent at any time to the Committee’s co-chairs, Senator William N. Brownsberger (D-Belmont) and Representative Claire D. Cronin (D-Easton). 

Edward Smith represents clients, including REBA, as lobbyist and legislative counsel on Beacon Hill. Ed can be contacted by email at

Thursday, August 31, 2017

Waivers of Subrogation: Button them up in the Policy

The typical set of condominium governing documents includes a provision which requires a waiver of subrogation to be included in one or more of the condominium association’s insurance policies.
There may be also a provision in the governing documents which requires an owner or tenant to include a waiver of subrogation in any insurance policy, including a policy insuring the furnishing and personal property in a unit. The inclusion of such requirement in the governing documents, however, does not guarantee that subrogation has actually been waived in the policies obtained by any of those parties. The key to certainty in this circumstance - despite the logistical complications - is to ensure that the policies, as issued, contain the required waivers of subrogation and that they are broad enough to comply with the directives of the governing documents.

The key to certainty in this circumstance - despite the logistical complications - is to ensure that the policies, as issued, contain the required waivers of subrogation and that they are broad enough to comply with the directives of the governing documents.

Before we get to waiver … what is subrogation?

Subrogation allows an insurance carrier that pays a claim to its insured to file a lawsuit against the person or entity that caused the harm to its insured. The insurance carrier effectively steps into the shoes of its insured to pursue a claim against the negligent party. An example of subrogation in this context would be if the owner of Unit A let its sink overflow and that water caused damage to Unit B, which damage was covered by insurance, the insurer of Unit B could sue the owner of Unit A for the money it paid to repair Unit B. The principle has a sound basis in equity, as it increases the likelihood that the person or entity that caused the harm will actually bear the financial responsibility for that harm. However, despite this sound basis, there are good reasons that condominium associations would want to require an insurer to waive subrogation in various circumstances. In the first instance, in order for the governing documents to comply with Fannie Mae and Freddie Mac requirements, there must be a waiver of subrogation in the association’s master insurance policy. Furthermore, requiring a waiver of subrogation in a unit owner or tenant’s policy may protect the association from a liability claim advanced by the unit owner or tenant’s carrier after it pays out on an insured loss. Finally, waivers of subrogation decrease the likelihood of conflict and litigation between and among condominium boards and unit owners, and that is a legitimate end in itself.
A provision requiring waiver in the governing documents is not enough.

Despite a tendency to get mired in “legalese,” sometimes contracts, and the court decisions interpreting same, mean what they say and say what they mean.

The mere fact that the governing documents of a condominium require the association to obtain an insurance policy waiving subrogation does not mean that the policy obtained by the association actually waives subrogation. The question in such circumstance is whether an insurer, that is not a party to the condominium governing documents issues a policy of insurance without a waiver of subrogation, is somehow bound by the waiver requirement contained in the governing documents. More than one court presented with this question has held that it is the language of the insurance policy, and not the governing documents, which controls whether the carrier has waived subrogation. In a New Jersey case, Community AssociationUnderwriters of America, Inc v. McGillick, the court concluded, that despite a clear mandate in the governing documents that all policies of physical damage insurance contain a waiver of subrogation, the actual policy of insurance contained no such waiver and the carrier’s suit could proceed. See also Skulkie v.Ceparis, 962 A.2d 589, 591 (N.J. Superior Ct App. Div.2009) (insurer’s claim barred where the condominium association’s insurance policy actually contained a waiver of subrogation).

In a more recent Massachusetts case, Pacific Indemnity Company v. Deming, 828 F.3d 19 (2016), the court took the same view on a related question. In Deming, the condominium declaration of trust contained a provision that provided unit owners “shall carry insurance” and that “all such policies shall contain waivers of subrogation.” Despite this clear mandate in the trust instrument, the court looked to the language of the policy to determine if the policy actually waived subrogation. The court concluded that the insurance policy in question did not, in fact, contain a waiver of subrogation and that policy was controlling and, at most, the unit owner breached its obligations under the trust instrument.

The lesson from these cases – even if there are arguments to be made to the contrary – is that an Association cannot and should not rely on the obligation imposed in the governing documents to include a waiver of subrogation in any relevant policy of insurance if it wants to insure such waivers are in place. An association must ensure that the policy itself contains the waiver of subrogation.

The waiver of subrogation should be clearly expressed in the insurance policy.

A condominium association that intends to include a waiver of subrogation should make sure the waiver is clearly stated.

For those readers who have ever attempted to read an insurance policy, the suggestion that anything can be “clearly stated” therein may seem oxymoronic, but it is possible. The Massachusetts case of Greater New York National Insurance Co. v. Lavelle Industries, is both an example of language which could have been “clearly stated” and of what can occur when the language of a policy is less than precise. In Lavelle Industries, the insurance policy provided that GNY waived its “right to recover payment from any unit-owner of the condominium that is shown in the Declarations.” Had the sentence stopped after “condominium” the parties might have avoided significant costs, years of aggravation and the risk of an adverse ruling. The problem is that, not surprisingly, no unit owners were specifically listed or “shown” in the trusts “Declarations." While the court ultimately got it right (by finding the carrier had waived subrogation) the language of the policy could have been more specific.

The association’s governing documents should require the association’s master policy to include a waiver of subrogation as to the unit owners. So too should the association’s governing documents include a requirement that owners or tenants obtain insurance policies that actually include waivers of subrogation. The reality, however, is that including language in the governing documents is not enough. The waiver of subrogation must make its way into the policy itself.

Originally posted August 24, 2017 at

Tom is a former REBA President (2010), Co-Chair of both REBA’s Residential Conveyancing and Unauthorized Practice of Law Committees, and a founding partner of Moriarty Troyer & Malloy, LLC.

Wednesday, August 30, 2017


So, you are buying a house. Of course, you will have a thorough home inspection completed to determine if the home appears structurally sound and to try to avoid purchasing a “money pit” with a roof and a heating system on their last legs. But careful buyers should consider performing additional homework.

Consider spending time in the neighborhood and at the Town or City Hall to examine the existing and potential abutting and nearby uses of land which could impact the property in the long term. A
buyer should examine the zoning maps and inquire about past, present and future uses and development plans of nearby areas. Sometimes owners are surprised to find that their home is situated near an industrial use that has the potential to generate traffic, noise or vibration, or that the home is adjacent to the site of a future ball field or subdivision.
While you are at Town Hall, inquire about the history of all permits issued for the home you are considering purchasing and determine if all of the permits have been closed out with a final inspection.

Take a look at the town or city’s wetlands maps (typically available online) to see if there are wetlands within 100 feet of the property, or if the property is within 200 feet of a river front. If you plan on performing any work on the property, wetlands regulations can impact your plans, even if the wetlands are not on your lot. Likewise check the maps of the Massachusetts Natural Heritage & Endangered Species Program to see if there are any priority habitat areas on the property.
A significant number of homes in Massachusetts are so called “pre-existing non-conforming” which means that the lots or the buildings do not comply with present zoning requirements; which is commonly referred to a “grandfathering”. However, without doing some homework it is difficult to tell if you will have the ability to construct any additions in the future. If you plan on constructing an addition, it would be worthwhile to determine what steps may be necessary before you proceed. A house that was built, or expanded, with  a zoning variance usually cannot be further altered without a new variance decision. And don’t be lulled into a false sense of security if somebody tells you that you “just have to get a variance” or that you “just have to get a special permit”; as the permitting process is somewhat complicated and is it not always easy to meet the established criteria required for such permits.

Owning a home can be a fabulous experience. A home is a place where families come together and share the good times and the bad, learn from one another and create lifelong memories. It provides handymen and women opportunities to learn new skills ranging from how to remove wallpaper, to house painting, to fence installation, to finding a reliable electrician. Take the time to research the applicable local regulations that will apply to your home, or ask your real estate attorney to help you. An ounce of prevention is worth a pound of cure. 

A former REBA president, Paul Alphen currently serves on the association’s executive committee and co-chairs the long-range planning committee.  He is a partner in the Westford firm of Alphen & Santos, P.C. and concentrates in residential and commercial real estate development, land use regulation, administrative law, real estate transactional practice and title examination .As entertaining as he finds the practice of law, Paul enjoys numerous hobbies, including messing around with his power boats and fulfilling his bucket list of visiting every Major League ballpark.  Paul can be contacted at

Tuesday, August 29, 2017

Lenders Beware: SCOTUS Decision in City of Miami v. Bank of America Opens the Door for Predatory Lending Claims by Municipalities under the FHA

On May 1, 2017, the Supreme Court of the United States issued a
partial, but significant, victory to municipalities in the consolidated cases of Bank of America Corp. v. City of Miami and WellsFargo & Co. et al. v. City of Miami, Florida, holding that the City of Miami has standing as an “aggrieved person” to assert claims under the FairHousing Act (“”). 

In 2013, the City of Miami filed suit against Bank of America and Wells Fargo, asserting that the lenders had violated the provisions of the FHA and engaged in predatory lending practices by granting loans to minority borrowers that, among other things, contained “excessively high interest rates, unjustified fees, teaser low-rate lows . . . and . . . unjustified refusals to refinance or modify the loans.”  The City of Miami asserted that these practices resulted in higher default and foreclosure rates for these borrowers, which, in turn, led to a decrease in property values and a suppression of Miami’s tax revenue.  Furthermore, the City of Miami asserted that these practices increased the demand for municipal services in the affected neighborhoods, including an increased demand for police, fire, and building code enforcement services, which resulted in increased costs to the City of Miami.

Bank of America and Wells Fargo moved to dismiss the suits, contending that the City of Miami did not have standing to assert claims under the FHA.  Specifically, the lenders argued that municipalities, like the City of Miami, did not fall into the “zone of interests” that Congress intended the provisions of the FHA to protect.  In a 5-3 decision, the Supreme Court disagreed.

In determining that Miami had standing, the Court looked first to the FHA’s definition of “aggrieved person.”  The FHA very broadly defines “aggrieved person” as “any person who . . . claims to have been injured by a discriminatory housing practice” or believes that such an injury “is about to occur.”  In interpreting this definition, the Court noted that it had consistently ruled in the past that this definition indicated “a Congressional intention to define standing as broadly as is permitted by Article III of the Constitution.” 

Justice Breyer, writing for the majority, pointed to similar lawsuits that the Court had allowed to proceed it the past, including a village that was granted standing when it sought recovery under the FHA for “racial-steering practices” that resulted in lost tax revenue and undermined the racial balance of its community.  Although the FHA was amended after those cases, the Court noted that Congress made no significant changes to the definition of “aggrieved person.”  This lack of significant change showed an intent by Congress to “retain the relevant statutory text” and embrace the Court’s expansive interpretation of standing under the FHA.  As a result, the Court was compelled to find that the City of Miami had standing under the FHA. 

Bank of America and Wells Fargo next argued that, even if the City of Miami had standing to sue, the City of Miami could not show that the damages claimed were sufficiently related to the claimed FHA violations such that they were proximately caused by the alleged violations of the FHA.  In this regard, Bank of America and Wells Fargo found more success. 

The United States Court of Appeals for the Eleventh Circuit had ruled that the City of Miami could make a showing of proximate causation because the result of the lenders’ allegedly predatory or discriminatory lending practices were foreseeable.  In a victory for the lenders, the Supreme Court rejected the Eleventh Circuit’s ruling that foreseeability alone is sufficient to establish proximate cause under the FHA.  Noting that the housing market is interconnected with economic and social life and that a violation under the FHA might “be expected to cause ripples of harm to flow far beyond the defendant’s misconduct,” the Court observed that “[n]othing in the statute suggests that Congress intended to provide a remedy wherever those ripples travel.”  The Court also noted that “entertaining suits to recover damages for any foreseeable result of an FHA violation would risk massive and complex damages litigation.”  As a result, the Supreme Court noted that a claim for damages under the FHA was akin to a tort action and subject to the “traditional requirement” of proximate cause which bars suits for harm that is “too remote” from the unlawful conduct. 

Accordingly, the Supreme Court held that the City of Miami, and those following its blueprint, were required to show a direct connection between the alleged violation of the FHA and the claimed injury.  The Court, declined, however to establish the particular limits of proximate cause.  Rather, the Supreme Court directed the lower courts to “define, in the first instance, the contours of proximate cause under the FHA” and further to determine how that standard would apply to the City of Miami’s allegations of lost tax revenue and increased expenses. 

Although the majority declined to offer an opinion as to whether such damages could meet the identified proximate cause test, Justice Thomas opined, in his dissent, that the majority’s opinion left “little doubt that neither Miami nor any similarly situated plaintiff can satisfy the rigorous standard” where “the link between the alleged FHA violation and its asserted injuries is exceedingly attenuated.”  Nevertheless, despite Justice Thomas’ caution, the Court’s decision allows the City of Miami, and other municipalities, to go forward, but how far? 

Notably, about two weeks after the Court issued its decision, the City of Philadelphia filed suit against Wells Fargo, alleging violations of the FHA and seeking unspecified damages.  Although it is unlikely that the City of Philadelphia will be the last municipality to assert these claims, it is still unclear whether these claims can be successful. 

This is a development that lenders in Massachusetts, and across the nation, will watch carefully.  Massachusetts is not far removed from its own mortgage and foreclosure battleground.  Although there has been no public progress in these cases in the lower court, other municipalities are bringing similar claims against lenders in other jurisdictions.  For example, the City of Providence filed suit against Santander Bank in the federal court in Rhode Island a years ago for violations of the FHA and the Equal Credit Opportunity Act, claiming the same type of injuries as the City of Miami.  That action was quickly settled and dismissed.  The issue of proximate cause will likely work its way back to the Supreme Court, which appears to have already set a high bar for damages. 

Kendra Berardi, ChrisBergan and Larry Heffernan all practice in the Boston office of Robinson + Cole LLP.   Kendra Berardi co-chairs REBA’s continuing education committee and serves on the association’s executive committee.  She can be contacted by email at   Chris can be reached at and Larry can be contacted at