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Homeowner Rights and Protecting Your Property Value: An Interview with Eric M. Sigman of Sigman Law Office, P.C.

By Eric Sigman

Tell us a little bit about your experience and the services you offer.

I started working in real estate law in 2001 as a paralegal learning the nuts and bolts of how a real estate law practice works. I then continued to work in that capacity when I began law school in 2002. In 2005 I graduated and passed the bar at which time I was employed by the same firm that I had worked with throughout law school. What I had learned through my experience at this firm and others is that there were areas that I could improve upon the overall customer experience in real estate transactions. As a result in early 2006, I started Sigman Law Office PC focusing on real estate and business law. Since 2006, my office has closed hundreds of real estate deals and has developed long standing relationships with clients, real estate agents and lenders throughout Massachusetts. Currently, we can offer services to clients throughout Massachusetts, New Hampshire and Maine. Our services range from representing buyers, sellers and lenders in residential and commercial real estate transactions to reviewing lease and representing condominium associations and real estate developers.

What are two or three of the biggest concerns for homeowners in your area when it comes to protecting their legal rights?

My practice focusses primarily on real estate transactions. Most of my clients are buying or selling real estate. When someone is buying or selling a home, they want to know that they are getting the deal that they bargained for and that their interests and their investment are protected. The real estate agents that people work with do an excellent job of structuring the deal and our role is to make sure that the deal that they constructed is accurately written into the contract and that this contract is enforceable.

When most people buy a home it is the biggest investment that they will make in their entire lives. It is important that people feel comfortable that their investment is protected. For our buyer clients we make sure that the title is clear so that they are getting good title to the property, that the municipal taxes and assessments are paid and that they are going to start off with a clean slate, and we also help our clients with their estate planning needs so that they have some peace of mind for the future.

An existing homeowner usually is mostly concerned with maintaining their ownership, protecting their interests in the property and having peace of mind that their use and enjoyment of the property will be unaffected throughout their ownership.

Can you briefly describe how a Homeowner Association or similar entity typically affects a homeowner or condominium owner in a subdivision or planned unit?

Most homeowner's associations are created to manage condominium developments. However there are some single family developments that are subject to common schemes and covenants which are managed and implemented by a homeowner's association. Because most of these associations are associated with condominiums, I think it is best to focus my discussion around the issues that affect condominiums.

A condominium is a form of real estate ownership where the owner has title to the condominium unit as well as a percentage interest in the common areas and facilities of the condominium. The common areas are managed by the homeowner's or unit owner's association. This group is typically organized as a trust where unit owners are appointed as trustees. The trust is however often managed by a professional management company.

The trustees are charged with the responsibility of establishing and maintaining a budget, repairing, maintaining and improving the common areas, and enforcing the bylaws and rules and regulations of the condominium. The association or trust therefore takes on a tremendous amount of responsibility to ensure that the unit owners pay their fees and that all of the unit owners abide by the rules that they agreed to follow when the purchased the unit.

One can easily envision a scenario where the failure to adequately manage the association can have a large impact upon the homeowner. If the budget is insufficient or not properly handled, the homeowner can find themselves paying for improvements and repairs out of pocket usually in the form of a special assessment. If a unit owner falls behind on their condominium fees and the association is not diligent about collecting those fees, the unit owner can face a series of issues. For example, the failure of one unit owner in a four unit development fails to pay their fees, which equates to 25% of the budget not being available to pay for items such as snowplowing, utilities, insurance, etc. These associations will often be forced to look to the other unit owners to replenish their funds or pay for certain items.

Is there something that most people don't know about HOAs that they should consider before buying a house or condo that is subject to HOA rules and regulations?

There are three things that people should consider when purchasing a condo.

First, Massachusetts has a very strict collections statute for condominium fees. Unlike in a landlord/tenant scenario where under certain circumstances a tenant can withhold rent, condominium fees must be paid by the unit owner or they will likely face a lawsuit from the condominium association to collect these fees. Essentially, the association can place a lien against the unit for up to 6 months of unpaid condominium fees, interest, and collections costs (which include legal fees). The law provides that the lien becomes superior to the lien held by the unit owner's lender and gives the association the right to foreclose on the lien and force the sale of the unit.

Second, a poorly managed condominium can substantially affect one's ability to sell their condo. This is due primarily to the fact that Fannie Mac, Freddie Mac and other governmental agencies involved in the mortgage process scrutinize condominiums and their management when someone applies for a mortgage to purchase a condominium unit. If the association is not approved, the buyer may not be able to obtain a mortgage on the property which will substantially impair the marketability of the condo. I have personally been involved in several transactions where unpaid condominium fees have blocked the sale of a condo.

Third, the management of a condominium and the unit owners can make condominium life miserable. Ideally, when you purchase a condominium, you are purchasing the right to live in your unit without interference from other, outside parties. In most cases, people never really have any significant issues with condominium living. The people around them are respectful and the association does an excellent job of managing any issues and the condominium as a whole. However, I have seen many situations over the years where the HOA's failure to respond or properly address issues between unit owners have caused a tremendous amount of stress and fighting between unit owners. The advice I give to any unit owner is to understand that you are not purchasing a single family home. You are buying a condominium unit which is your home but that ownership requires you to live in common with other people within the same building. Your ownership rights are subject to the rights of others living in the same building.

As a result, I advise all of my buyers to try to get involved in the condominium association so that they can have some control over the decisions and management of the condominium and the common areas.

What are some of the most common property issues that you've seen happen between homeowners and a government agency?

Most of the issues that I have seen with a government agency surround issues such as permitting, zoning and environmental restrictions.

Building codes are in place to ensure safety in the construction and improvement of homes. Often people complete work on their own without either checking to see if they need a permit or disregarding the requirement. When a buyer is looking at a home it is imperative that they pull the file on the property from the building inspector's office at the local town hall. The file should be reviewed carefully and reconciled with the known improvement to the property. If you purchase a home and there was an improvement done on the property without a permit when one was required, the buyer often inherits this issue. This can become a significant problem when the buyer then goes to sell the home. If the new buyer determines that a permit should have been pulled but was not they may require the existing owner to address the issue before closing.

All towns have restrictions on building on or adding to an existing structure. Towns regulate the size of buildings and the distance between a building and a road among many other things. These regulations are called zoning bylaws. Occasionally, a homeowner will be attempting to put an addition on a home or install a pool and will run into issues with the local zoning. Sometimes, the building inspector will make an exception and grant a special permit so that the homeowner can obtain relief from the zoning bylaws. In some circumstances, these exceptions are not granted and the homeowner is forced to take additional legal measures such as applying for a variance which can prove time consuming and costly.

Many people in Massachusetts purchase homes in and around wetlands or conservation areas. There are many guidelines, rules, laws and statutes which govern these areas and the ability of a homeowner to do certain activities within a certain distance of these wetlands. These restrictions often make it difficult and expensive to make alterations to the home or go as far as restricting the type of fertilizer a homeowner can use on their lawn.

What basic steps would you advise a homeowner to take if they are experiencing one of those issues?

My advice to homeowners facing any of these issues is to do whatever is required by the municipality within reason. Most of the time, you can speak with the building inspector, conservation commission or planning board to find out how you can work within their rules and guidelines. Sometimes however these guidelines are onerous and difficult to follow.

That being said if the building codes or zoning bylaws require the homeowner to do things that would be excessively expensive, impossible or impracticable, there are avenues and channels that exist that afford a homeowner with relief from some of the local permitting, zoning and conservation restrictions such as obtaining special permits and variances. These can however be drawn out processes and can be very expensive between permitting and legal fees.

My suggestion for any buyer is to complete your due diligence on a property such that you are aware of any potential roadblocks or restrictions on the ability of the homeowner to fully enjoy and use their property. This way, you can mitigate the chances that you will have to deal with these issues.

What's the best way for people to reach you and your practice?

The best way to find out more about my practice is to visit my website at www.sigmanlaw.us or call me directly at 781-333-4182.

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