The content provided in the REBA News is for informational purposes only and it is not legal advice nor does it necessarily represent the opinion of REBA or any of its members or affiliates.
M.G.L. Chapter 184, Section 35, Part II, Title I
M.G.L. Chapter 203E, Section 1013, Certification of Trustee
Land Court Guideline 14: The Effect of Death upon Registered
Land Titles
Land Court Guideline 14: The Effect of Death upon Registered
Land Titles – Memo
REBA Form 4A: Affidavit under M.G.L. c. 183, §5B (Affiant an
Attorney)
REBA Form 35: Trustee’s Certificate Pursuant to M.G.L. c.
184, § 35
REBA Title Standard No. 41: List of Heirs
REBA Title Standard No. 68: Trustee’s Certificates
Selling a home—especially when preparing to move out of state—can be extremely stressful and requires trust and coordination among multiple parties
Plaintiffs in the case listed their Massachusetts home for sale with the intention of moving to a new home in West Virginia. Plaintiffs received from a prospective buyer an offer to purchase the property for $2.05 million but plaintiffs required a pre-approval letter for a $1.64 million mortgage or eighty percent of the proposed purchase price before moving forward with the sale transaction.
The prospective buyer provided a pre-approval letter from the defendant bank, which stated that the defendant bank reviewed the prospective buyer’s credit profile and verified his income and assets. Plaintiffs, allegedly relying upon the mortgage pre-approval letter, accepted the offer and entered into a purchase and sale agreement with the prospective buyer. Thereafter, plaintiffs took the property off the market.
Eleven days later, the defendant bank rejected the prospective purchaser’s mortgage application, causing the sale to be cancelled. Plaintiffs were then unable to sell the property, claiming that the cancelled sale, coupled with years long litigation against the prospective buyer, created a perception that there was something wrong with the property and ruined its marketability. Plaintiffs also claimed that the collapsed sale prevented them from investing the sale proceeds and ultimately forced them to sell their home in West Virginia.
Plaintiffs sued the defendant bank for fraud, negligent misrepresentation, and violation of the Massachusetts Consumer Protection Act, G.L. c. 93A (“Chapter 93A”). Plaintiffs allegedly learned during the litigation that the defendant bank issued the mortgage pre-approval letter without reviewing the prospective buyer’s credit profile or verifying his income and assets.
The bank defended against the suit by arguing that the plaintiffs’ alleged injuries were not a reasonably foreseeable risk arising from a mortgage pre-approval letter. The Court disagreed, concluding that a reasonable jury could find that the plaintiffs, as sellers, were among those that the defendant bank had reason to expect would rely on its statements. The Court concluded that the plaintiffs’ claims both flowed from the defendant bank’s alleged fraud and were a reasonably foreseeable risk of the bank’s alleged false representation. The Court also rejected the defendant bank’s argument that it was shielded from liability under Chapter 93A because it had no business relationship with the plaintiffs. The decision is noteworthy and should serve as a warning to the lending industry in terms of the representations lenders make during the mortgage pre-approval process.
In the residential landlord-tenant context, many leases call upon the tenant to obtain insurance to cover against the loss of the tenant’s personal property.
Landlord’s often overlook—or are simply unaware—that additional coverage exists to protect against damage to the landlord’s personal property and lost income resulting from a casualty. For example, if an event renders a home uninhabitable, the tenant would have the right to cancel the lease without penalty and find alternative housing, or the landlord maybe obligated to pay for such alternative housing. The landlord may also have provided a furnished apartment. Lost rent, the cost of providing the tenant with alternative housing, or damage to the landlord’s furniture is not covered by the general liability policy.
Landlord’s insurance, separate from the general liability insurance, covers such losses. If it takes a long time to rebuild a home, landlord’s insurance will cover the lost rent that otherwise would have been generated but for the damage. Such coverage would also replace damaged furniture owned by the landlord. This landlord’s insurance coverage does not cover costs associated with a tenant who simply stops paying rent; there needs to be an event that renders the leased premises damaged or uninhabitable. Many new landlords are unaware of this type of coverage, but even long-time landlords may be surprised to learn that they can protect against lost income in the event of a casualty by obtaining landlord’s insurance.
Landlords should contact their insurance carrier to determine the cost of landlord’s insurance coverage. It may be a small price to pay to ensure steady income in the event of a casualty that renders a tenant unable to occupy the rented space.
A co-chair of REBA’s Residential
Landlord/Tenant Section and an associate at the firm of Rudolph Freidman LLP,
George has an active litigation practice representing landlords in disputes
with tenants, bringing actions or defending against claims in business
disputes, and representing buyers and sellers of commercial enterprises such as
restaurants, shops and professional offices. George can be contacted by email
at ggeorgountzos@rflawyers.com.