A simple home inspection may not be enough

A couple who purchased a condo in a building that turned out to be contaminated with toxic chemicals can recover only 65% of their losses, because they could have arranged an environmental inspection of the property before they bought it but didn’t do so, the Michigan Court of Appeals recently decided.

The couple bought a condo unit in a converted factory. The developer had installed a vapor barrier, but never actually decontaminated the dangerous chemicals on the site.

The buyers claimed that the seller’s real estate agents assured them the site was safe. It appears the agents believed that was true at the time, but when they later found out that the site still had problems, they didn’t say anything.

According to the court, the agents could still be liable, because even though they didn’t technically lie, they had a legal obligation to tell the buyers about the problems once they knew about them.

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Do you have flood insurance?

Many people are surprised to discover that their standard homeowner’s insurance policy does not cover them in the event of a flood.

If you want flood insurance, you generally have to buy a separate policy. Typically these policies are sold by private insurers, but are backed by the U.S. Government through the National Flood Insurance Program.

Some federally backed mortgage programs require homeowners to buy flood insurance if they live in a high-risk area. Some private lenders require this as well, and they may require it even if the property is not in a high-risk area.

Just because a property is not in a high-risk area doesn’t mean that flooding is impossible.

You should note that just because a property is not in a high-risk area doesn’t mean that flooding is impossible. High-risk areas are typically low-lying regions that are subject to storm surges or overflowing rivers, but even property in a very low-risk area can still be flooded due to heavy rainfall, drainage system failures, or a broken water main.

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Massachusetts Landlords could be liable if tenant doesn’t pay contractor

If a tenant hires a contractor to make improvements to a property, but the tenant doesn’t pay the contractor in full, can the contractor sue the landlord for the difference?

It sounds unlikely, but it happened in one Massachusetts case recently.

Former Boston Celtics player Dana Barros leased a warehouse and hired a contractor to make improvements so he could turn it into a sports complex. Later, the contractor believed it hadn’t been paid in full, so it went to court against Barros and against the owner of the warehouse.

The warehouse owner argued that it couldn’t be sued because it was merely the landlord; it never signed an agreement with the contractor.

Most states have what are called “mechanic’s liens, such that if a contractor isn’t paid in full by someone for work on a property, it can place a lien on the person’s interest in the property.

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Know the tax rules when buying, selling, or refinancing your home

Owning a home in Massachusetts provides a lot of tax advantages. Sometimes, though, the rules can be tricky.

Here’s a brief introduction to some of the many tax rules involved in buying, selling, or refinancing a home. But remember, the rules are complicated, and there are always exceptions. You’ll want to consult a Massachusetts real estate attorney or tax advisor to see how the general rules apply to your specific situation.

  • If I own a home, can I deduct my mortgage interest payments?

Yes, home mortgage interest is generally deductible on your federal income tax return on loan amounts up to $1 million. To get the deduction, you’ll need to itemize your deductions on Schedule A. For most people, this is the primary tax advantage of owning a home.

Your lender will typically send you a notice at the end of the year telling you how much of your payments were for interest as opposed to principal.

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Saving money on your Massachusetts Mortgage Refinancing

By Attorney Chesley Oriel

Many individuals today who are looking to refinance their mortgage do not realize that the lender will allow them to choose the attorney who is going to “close” (handle the paperwork) their loan. By using your choice of the “closing attorney” keeps you in control, and makes it easier for you to negotiate the attorney’s fees and charges. If your lender refuses to allow you to choose the closing attorney, then you should take a very close look at what the charges are for the closing attorney that the lender has chosen.

In Massachusetts, only “attorneys” (or paralegal-notaries who work for an attorney)are supposed to notarize documents relating to mortgage matters. Therefore, it is important to make sure that your lender complies with this requirement.

With the realties of the mortgage business today, borrowers should be able to shop around and get very competitive fee quotes. Just remember to get any fee quotes in writing before you agree to use a particular attorney’s services.

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A Way to Possibly Stop a Massachusetts Foreclosure

By Greater Boston Real Estate Lawyer, Attorney Chesley Oriel

If you are in the midst of having a mortgage foreclosed and the real estate is located in Massachusetts, then I urge you to find the HUD Settlement Statement that you received when you obtained the mortgage. Request an attorney review the HUD Settlement Statement for the following areas:

1. who handled the actual closing? was it an attorney or was it a Settlement Service Company?

2. what fees and expenses were charged? Were they fair and reasonable? Were you charged “owner’s” title insurance for a refinance transaction? Was the amount of the title insurance charged even for just lender’s title insurance correct? Were you given any discounts that should have been offered to you?

3. depending on when (date is important) you signed the mortgage documents, was the Notary an attorney, or just a “notary public”? Depending on when it was done, the notary should have been either an attorney or a paralegal/notary who worked under an attorney.

If for any reason, you cannot find the HUD Settlement Statement, then you should send a certified mailed letter to your original lender requesting a copy of that document.

A few minutes spent having an Attorney who knows what they are doing, review your HUD Settlement Statement could save you not only thousands of dollars, but perhaps even keep you living in your home.

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Selecting your real estate closing attorney

By Attorney Chesley Oriel, Framingham Real Estate Lawyer

Many times, for first time home buyers, the Lawyer they choose to help them with their purchase, will be the first lawyer they have had the need to hire. It is not uncommon for buyers to ask their real estate agents for the names of lawyers who they recommend. Although the real estate agents may be a good source, it is important to take the time to speak with a few lawyers to see which one is the right match for you.

Never be afraid to ask questions about the lawyer’s practice, their availability, their fees, and any references. Many times real estate lawyers can help you find a mortgage lender who provides good competitive interest rates and reasonable closing costs. Generally if you are a buyer, you want the mortgage lender to use your lawyer to close the loan. If the mortgage Lender refuses to accommodate your request, then you should get a written statement setting forth all of the legal fees, recording fees, and title insurance costs from the mortgage Lender’s attorney and ask your Lawyer for an opinion as to whether such fees/costs are reasonable, and if they are not, then let your Loan Officer know that you may have to look elsewhere for a mortgage because you are not happy with the Lawyer fees and costs you were quoted.

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How To Save Money When Refinancing Your Mortgage

Refinancing Your Mortgage in Massachusetts
By Attorney Chesley Oriel, Massachusetts Real Estate Lawyer

Times are difficult enough, without wasting your money. I urge clients who call me looking for assistance in helping them with the refinancing of their mortgage to shop around. We give them the names of 3-4 lenders who we work with and who we believe are very competitive with their rates and closing costs. The few minutes it takes to call around, can save them thousands of dollars.

Most people do not realize that every time they allow a potential lender to “pull” their credit, that it in fact has a negative effect and will lower their credit score.  So only after you have decided on which lender you are going to use, you then allow them to pull your credit.

My office covers the entire state of Massachusetts and we travel to the Borrower’s home if that is more convenient. Borrowers should ask their loan officers if they can choose their own closing attorney. If they tell you “no”, then you should look for another lender. The Borrower always ends up paying for the Closing Attorney, so why shouldn’t the Borrower be able to choose which one it will be. Many lenders today try to use what are called Settlement Service companies. They are for the most part out of state companies, who the Borrower has no control over, as compared to an Attorney who you select.

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