Blog Archive

Wednesday, August 28, 2013

SEEKING YOUR THOUGHTS: HAVE YOU BEEN REQUIRED TO PROVIDE ADDITIONAL OPINION LETTERS IN CONDO CLOSINGS?


Have you been required of to provide an attorney’s opinion letter to residential mortgagees,  for their benefit and the benefit of FNMA, in relation to a closing on a residential condominium unit certifying as to various provisions contained in the condo documents and all amendments thereto and further:

That  you are familiar with all laws, ordinances, regulations and other legal requirements which were applicable with the respect to the establishment and administration of the condominium in the jurisdiction and locality where the unit  is located;

None of the amenities or facilities, including any recreational or parking facility, related to or associated with the condominium are, or are proposed to be, leased to the Owners Association or unit owners. None such amenities or facilities will be subject to any restriction or reservation in favor of the developer or declarant of the condominium or any affiliate of such developer or declarant, as the term “affiliate” is used in Section 803.08 of the FNMA Conventional Home Mortgage Selling Contract Supplement; and  

The project documents may provide for implied approval to be assumed when a mortgagee fails to submit a response to any written proposal for an amendment within sixty (60) days after it receives proper notice of the proposal, provided the notice was delivered by certified or registered mail, with a return receipt requested. Notwithstanding the foregoing, project documents that were recorded prior to August 23, 2007, may provide for implied approval to be assumed when a mortgagee fails to submit a response to any written proposal for an amendment within 30 days after it receives proper notice of the proposal, provided the notice was delivered by certified or registered mail, with a return receipt requested.

Have you been required to provide the opinion letter at no additional charge above and beyond your capped fee for the title exam, review of the title exam, title certification, coordination of the closing, performing the closing, acting as settlement agent, recording the documents and disbursing funds?

Are you familiar with ALL laws, ordinances, regulations and other legal requirements which were applicable with the respect to the establishment and administration of the condominium?

Have you examined Section 803.08 of the FNMA Conventional Home Mortgage Selling Contract Supplement?

Have you been able to examine the condo docs and all amendments to be in a position to provide a legal opinion on the above types of questions (ie an “implied approval to be assumed when a mortgagee fails to submit a response to any written proposal for an amendment…”)?

I am interested if you have. I have talked with some small firms who are now moving away from performing residential closings because they see a trend where lenders are shifting the burden of compliance with federal regulations to the closing attorneys.  The attorneys fear that if the borrower defaults and the loan reverts back to the lender under the new rules the lender will seek a remedy from the closing attorney. Your thoughts?

PAUL F. ALPHEN, ESQUIRE

BALAS, ALPHEN & SANTOS, P.C.


 

Tuesday, August 27, 2013

SEEKING A MGL CH 240 SEC 14A DETERMINATION FOR A NON-CONFORMING LOT


Take a look at Lois A. Jones v. The Town Of Harwich No. MISC 12-46068, Commonwealth of Massachusetts, Trial Court Land Court Department, Plymouth June 24, 2013. The Plaintiff was able to avoid the expense and time delays of (a) preparing plans and seeking a building permit, (b) obtaining a denial from the Building Department, (c) seeking a reversal by the Zoning Board of Appeals, and (d) filing a judicial  appeal of a denial once issued by the ZBA.  “The instant action was initiated pursuant to G.L. c. 240, § 14A by the plaintiff, Lois Jones (plaintiff / Jones). Ms. Jones seeks a judicial determination concerning the extent to which Article IV and Article VI, Table 2 Area Regulations and Table 3 Height and Bulk Regulations of the Harwich Zoning Bylaw (Zoning Bylaw) apply to her parcel of land on Sea Street Extension in Harwich, Massachusetts. Asserting that her property is exempt under G.L. c. 40A, § 6, Jones asks this court to conclude that the dimensional and area regulations of the Zoning Bylaw do not apply to her property.”

 Land Court Jude Grossman determined: “It is true that the language of the statute does not explicitly contemplate a judicial determination as regards the applicability of G.L. c. 40A to a property, since the statute is not a ‘municipal ordinance, by-law or regulation.’ However, the plaintiff seeks not a determination of the applicability of G.L. c. 40A, § 6 per se, but rather a determination concerning the effect of the Bylaw upon the locus. Although an interpretation of G.L. c. 40A, § 6 may constitute a necessary element, it is secondary to the interpretation of the Zoning Bylaw. This court possesses the jurisdiction to consider G.L. c. 40A, § 6 within the context of a challenge to a zoning bylaw.”

Judge Grossman then determined that the lot was a protected non-conforming lot. Nice.

PAUL F. ALPHEN, ESQUIRE

BALAS, ALPHEN & SANTOS, P.C.


Tuesday, August 6, 2013

A NEW STANDARD FOR DEMONSTRATING THAT A VARIANCE HAS BEEN EXERCISED


Last month in Grady v. Zoning Bd. of Appeals of Peabody, 465 Mass. 725 (2013) the SJC determined that a variance decision that had been relied upon by the applicant did not expire notwithstanding that the decision was not recorded within one (1) year of its grant as required by Statute.

“ No variance, or any extension, modification or renewal thereof, shall take effect until a copy of the decision bearing the certification of the city or town clerk that twenty days have elapsed after the decision has been filed in the office of the city or town clerk and no appeal has been filed, or that if such appeal has been filed, that it has been dismissed or denied, or that if it is a variance which has been approved by reason of the failure of the permit granting authority or special permit granting authority to act thereon within the time prescribed, a copy of the petition for the variance accompanied by the certification of the city or town clerk stating the fact that the permit granting authority failed to act within the time prescribed, and no appeal has been filed, and that the grant of the petition resulting from such failure to act has become final, or that if such appeal has been filed, that it has been dismissed or denied, is recorded in the registry of deeds for the county and district in which the land is located and indexed in the grantor index under the name of the owner of record or is recorded and noted on the owner's certificate of title.” Mass. Gen. Laws Ann. ch. 40A, § 11 (West)

In the Land Court, Justice Long found that the Permit Extension Act did not extend the time period within which a variance decision must be recorded. Justice Long wrote:  The Permit Extension Act, in relevant part, provides, ‘[n]otwithstanding any general or special law to the contrary, an approval in effect or existence during the tolling period shall be extended for a period of two years, in addition to the lawful term of the approval.’ St.2010, c. 240 § 173(b)(1) (emphasis added). As Cornell makes plain, however, under G.L. c. 40A §§ 10 & 11, ‘a variance does not ‘take effect’ until it is recorded ... and the recording of a variance within one year of its grant is necessary to ‘exercise’ it.’ Cornell, 453 Mass. at 891. Simply put, unless ‘substantial reliance’ is sufficient to bring variance rights into effect, there is no actual ‘variance’ unless and until timely recording occurs. Thus, absent a ‘substantial reliance’ exception, there was no ‘approval’ capable of being extended by the Permit Extension Act. In short, on the facts of this case, the ‘substantial reliance’ issue cannot be avoided.” Grady v. Langone, 09 MISC. 419147 KCL, 2011 WL 3242211 (Mass. Land Ct. July 27, 2011) judgment entered, 09 MISC. 419147 KCL, 2011 WL 3163300 (Mass. Land Ct. July 27, 2011) aff'd sub nom. Grady v. Zoning Bd. of Appeals of Peabody, 465 Mass. 725 (2013)

Those of you who find this kind of thing exciting will no doubt remember Paul Cornell who attempted to develop two lots in Dracut but was stopped when the SJC finally ruled that he had not exercised his variance decision within a year. Within that year period “Cornell hired a registered land surveyor to prepare an ‘approval not required’ plan (ANR), see G.L. c. 41, § 81P, which subsequently was filed with the planning board, and approved and indorsed on August 14, 2002. Cornell then retained Norse Environmental Services, Inc. (Norse), to prepare septic and wetlands delineation plans. Norse began testing the soil in November, 2002, and submitted a septic plan to the board of health on February 14, 2003. At some point in early 2003, Cornell applied for an order of conditions from the conservation commission. By March 7, 2003, the anniversary of the issuance of his variance, the board of health and the conservation commission continued proceedings concerning Cornell's applications several times, and had not issued any decision concerning Cornell's applications” Cornell v. Bd. of Appeals of Dracut, 453 Mass. 888, 889, 906 N.E.2d 334, 336 (2009).

Notwithstanding actions that most of us would have considered to be steps that relied upon the original grant of the variance, the Court in Cornell did not agree.

In the Grady case, the SJC upheld the Land Court decision that found that the following steps were sufficient for a finding that the variance had been exercised: “They had previously (pre-grant) hired a surveyor (Jan. 27, 2008) and architect (Sept. 2, 2008). Now they (1) hired a general contractor (Feb. 18, 2009), (2) applied for a building permit (Feb. 22, 2009), (3) were issued that building permit by the City's building inspector (Feb. 24, 2009), (4) hired (at the City's insistence) a supervising architect to review the progress of the work and prepare periodic reports for the City (Jun. 15, 2009), (5) applied for and received a $350,000 construction loan from Community Credit Union of Lynn (Jun. 17, 2009), (6) granted a mortgage on Lot B to Community Credit Union (Jun. 17, recorded Jun. 18, 2009), (7) drew an initial $59,120 from the loan to begin funding construction activities (Jun. 19, 2009), and (8) began clearing the site (Jun.2009). Each involved a corresponding expenditure.” Grady v. Langone, 09 MISC. 419147 KCL, 2011 WL 3242211 (Mass. Land Ct. July 27, 2011).

It is important to note that the Grady variance was recorded a year and eleven (11) days after the grant thereof, the Plantiff had notice of the original variance proceedings but did not file an appeal and the Plaintiff’s land was subject to an easement that was created over her land for the purpose of the use being constructed on the lot in question.

 

 PAUL F. ALPHEN, ESQUIRE

BALAS, ALPHEN & SANTOS, P.C.