COMMERCIAL LEASE: Time to Review and Update

Are you a commercial landlord?  Have you been using the same lease for your tenants for years?  Are you fully protected if your tenant defaults?  The Massachusetts Supreme Judicial Court recently held in the matter of 275 Washington Street Corp. v. Hudson International, LLC, that if the remedy is not in the lease, the landlord cannot pursue it.  In 275 Washington Street, the tenant broke a 12 year lease after only two years.  The landlord quickly found a replacement tenant, at a lower rent, and sued the former tenant for damages.  The SJC held that the landlord must wait the full term of the lease to determine its damages because the only remedy in the lease was an indemnification clause. 

The SJC essentially told landlords that in order to collect damages from a former tenant, remedies for default must be clearly and explicitly stated.  The landlord must carefully draft its lease to include specific remedies, such as a damages acceleration clause, to ensure recovery if the tenant defaults or breaches the lease before the term expires. 

Does your lease contain only an indemnification clause?  Has your lease been updated to ensure you are protected and can collect damages from your former tenant immediately?  Phillips Silver has helped many commercial landlords throughout Massachusetts draft leases, negotiate lease terms and evict tenants and is ready to discuss your commercial leases and tenants with you.  www.pstas.com

The information you obtain on this blog is not, nor is it intended to be, legal advice. You should consult a lawyer for advice regarding your individual situation. We invite you to contact Phillips Silver and welcome your calls, letters and electronic mail.   Please note, contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

LEGAL MALPRACTICE: It’s more than just courtroom error. Part III: Is there any way to recover my damages when my lawyer has been disbarred?

With all civil lawsuits seeking monetary damages the question is how will I recover my damages from the defendant?  Generally we first look to determine if there is insurance coverage available.  If it was a motor vehicle accident we look to an automobile insurance policy, in a legal malpractice case we look to see if there is a professional liability policy in effect.  If insurance is not available we would next look to assets of the defendant including specifically real estate.  But where do you look if there is no insurance and the defendant has no assets?

If you have suffered a financial loss due to the dishonest conduct of a member of the Massachusetts Bar in their capacity as your attorney, or a fiduciary, you can seek repayment from Massachusetts Client Security Board (MCSB).  However, it is important to note that there are three requirements for claims submitted to the board:

1. The attorney must be suspended, disbarred, or deceased;
2. The claim must be based in theft; and
3. You must have made reasonable efforts to recover the amount you claim was stolen from your attorney.   This may include first filing a civil action in your local court.

If you are able to present evidence of the theft and the inability to collect from your attorney or its insurer you may be able to recover the full amount stolen from the MCSB.

It’s important to have this alternative avenue of collection because generally a professional liability policy will not cover claims of theft.

Phillips Silver has helped many clients throughout Massachusetts seek recourse against their former attorneys and is ready to discuss your case with you.  Contact us for a free consultation.     www.pstas.com

The information you obtain on this blog is not, nor is it intended to be, legal advice. You should consult a lawyer for advice regarding your individual situation. We invite you to contact Phillips Silver and welcome your calls, letters and electronic mail.   Please note, contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

“PROPERTY MUST APPRAISE FOR THE PURCHASE PRICE” - A KEY PROVISION EVERY BUYER SHOULD INCLUDE IN AN OFFER TO PURCHASE REAL ESTATE

As a practical matter, an Offer to Purchase Real Estate (Offer) is generally a one to two page document outlining only the basic terms of a real estate transaction such as the purchase price, the parties involved, the closing date, personal items to be included and what inspections are to be performed prior to closing.   This then leads to the signing of a formal Purchase and Sale Agreement (P&S) which can be over ten pages long and will include additional terms not outlined within the Offer.

While an Offer cannot list all of the terms contained in a standard P&S, a Buyer should be sure to include a clause that the “property must appraise for the purchase price” listed therein.   This language protects the Buyer should the property appraise for an amount less than the purchase price.   Unfortunately, if this phrase is not included in the Offer, the Seller may object to the inclusion of this language in the final P&S.   Generally the Seller will claim that the inclusion of this language is an additional term that was not contemplated within the accepted Offer and materially changes the terms of the transaction.   

Frequently an argument is made that a mortgage contingency clause would protect the Buyer if the property does not appraise for the purchase price.  This may be true in transactions where the Buyer is only putting down 3% with a purchase price of $150,000 as the bank would likely deny financing.  But this could become a large problem when the Buyer is putting down 20% of the purchase price of $400,000 as the bank may not deny financing.   In the second situation with a $400,000 purchase price the bank may be willing to lend so long as the house appraises for at least $360,000.  But as the Buyer do you want to pay $400,000 for a house you know is only worth $360,000?  Likely not.  If you do not have a provision in the P&S requiring the property to appraise for the purchase price and your bank is still willing to lend you money for the purchase you could find yourself in a tough spot.  By this time you likely have already paid your second, and usually significant, deposit with the signing of the P&S and if you back out you could lose your deposits to the Seller. 

By including in the offer a simple clause stating that the property must appraise for the purchase price you reserve your right to re-negotiate with the Seller should the property come back at any amount below the appraisal amount.  Why pay $400,000 for a house that appraises at $393,000? 

Phillips Silver has helped many clients throughout Massachusetts buy and sell homes.  If you are looking for legal representation concerning the purchase of a new home please contact us to discuss how we can help you.  We have experience representing buyers and their lenders in connection with the purchase of property in Massachusetts.  We can also help if you are selling your home or other property in Massachusetts      www.pstas.com

The information you obtain on this blog is not, nor is it intended to be, legal advice. You should consult a lawyer for advice regarding your individual situation. We invite you to contact Phillips Silver and welcome your calls, letters and electronic mail.   Please note, contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.