Articles Posted in Real Estate

Landlords in Massachusetts, Rhode Island, and Connecticut must comply with the consumer protection laws of each state when charging security deposits or other refundable or non-refundable fees to incoming residents pursuant to a lease or rental agreement. Move-in fees charged for atypical types of living arrangements, such as inpatient hospitalizations or residency in an assisted living or retirement community may also fall under these consumer protection laws, however, the proper application of security deposit laws in such cases may be difficult to ascertain. A state appellate court recently published a ruling in a Massachusetts property law case concerning the application of a state security deposit limitation to a lease agreement at an assisted living residence in the state.

The plaintiff in the recently decided case is the estate of a woman who signed a residency agreement with an assisted living residence (ALR) operated by the defendant in 2013. In addition to the first and last month’s rent that she was required to pay under the lease agreement, the woman was charged a $2800 “community fee” by the defendant, which functioned similarly to a non-refundable security deposit within the residency agreement. After the resident passed away, her estate filed a lawsuit against the defendant, alleging that the $2800 community fee was a violation of Massachusetts state law, as it was not refunded to the resident’s estate after her tenancy expired, and was not used as the law requires of a security deposit.

The defendant answered the plaintiff’s complaint and moved the court to dismiss the claim, arguing that the community fee was not a security deposit at all, and that the statutes governing security deposits do not apply to ALRs, because they are not based on a traditional landlord-tenant relationship. The trial court granted the defendant’s motion and dismissed the complaint, resulting in the case being appealed to the state high court.

Residential and commercial developments often contain restrictive covenants that protect property owners from various behaviors of other owners in the development that may affect the value, use, or enjoyment of their property. The Rhode Island Supreme Court recently decided an appeal in a Rhode Island real estate lawsuit filed by the owner of one home in a subdivision against their neighbor, alleging a violation of such a restrictive covenant.

The plaintiff in the recently decided case is the owner of one residence in a nine-lot subdivision that is governed by an agreement among the owners to abide by certain restrictive covenants that apply to the demolition, construction, or modification of the homes in the subdivision. According to the appellate opinion, the plaintiff filed suit against the defendant after the defendant demolished the existing single-story construction on their lot and began construction of a multi-story home on the lot.

The subdivision containing the plaintiff’s and defendant’s homes was governed by a restrictive covenant that required the approval of a committee of homeowners from the subdivision prior to the construction of a new home or multi-story dwelling. Since the defendants did not obtain such approval before construction, the plaintiff sought a ruling requiring the defendants to demolish the new home and seek the required approval before continuing construction. Before the trial was held on the plaintiff’s claim, the defendants obtained majority approval for their construction by the committee, but the plaintiff continued to pursue their lawsuit.

Disputes between adjoining condominium owners or members of homeowners associations are a commonly occurring Rhode Island real estate issue. Members of condominium or homeowners associations may have differing interpretations of the foundational documents, which can lead to disputes over governing the association. The Rhode Island Superior Court recently released a ruling that put to rest a dispute between the owners of two adjacent condominiums over governance and renovations.

The plaintiff in the recently decided case was the owner of one unit of a two-unit condominium, who sued the owner of the other unit over the defendant’s renovation of certain common areas of the condominium without the plaintiff’s consent and in violation of the governing documents of the condominium. According to the appellate opinion, the two-unit condominium was governed by a two-member board of directors (each unit owner being represented by one member), and any improvements or changes to the condominium required both members’ approval.

Prior to the plaintiff’s filing suit, the defendant expressed a desire to make certain expansions and structural changes to their unit. The plaintiff requested a proposal as well as plans of the renovations before giving their approval. Instead of furnishing the plaintiff with the plans as requested and seeking their approval under the condominium governing rules, the defendant represented to the municipal building authority that the board of directors had approved the renovations, and they obtained a permit to start construction; the plaintiff filed the suit to stop construction soon thereafter.

Homeownership can be one of the most rewarding and financially wise decisions that an individual or family can make. The Rhode Island real estate market is currently very desirable for first-time homebuyers, although purchasing a home can be more complicated than anticipated if a buyer is not prepared for the process. A recent media report outlines essential steps that should be taken by anyone interested in buying a home in Rhode Island.

First, potential homebuyers should know that they are ready to buy a home. According to the report, a homebuyer should purchase a home in which they intend to reside for at least five years. Although the housing market has been improving, buying a first home as an investment with the expectation that it will increase in value in the short term is not usually a good decision. A good guideline is to purchase a home with a payment that will be no more than 30% of a family’s income.

Homebuyers should have their finances in order before making an offer on a property. First, the buyer should ensure that their credit scores are high enough to obtain approval for a loan; poor credit can often be improved within 12 months or less, if necessary. In addition to a satisfactory credit score, homebuyers should have enough money saved up to cover a down payment on their desired home. A down payment should be somewhere between 3.5% and 20% of the purchase price of the house, although the more money that a buyer can put down, the smaller their monthly mortgage payment will be.

Anyone who is interested in sharing ownership of Rhode Island real estate will discover that there are various ways for multiple parties to share a piece of real estate, each of them with benefits and disadvantages to the parties, depending on the situation. The most common types of shared property ownership in Rhode island are joint tenancy and tenancy-in-common.

The most common form of joint possession of real property in Rhode Island is called a tenancy-in-common. Under state law, any property that is sold, given, or otherwise conveyed to two or more persons is presumed to be a tenancy-in-common, unless the conveyance expressly states otherwise. Under tenancy-in-common, two or more tenants each own a partial share of the entire property, although they each have the right of possession and use of the entire property. Tenants in common do not need to hold equal shares of a property, and their individual shares can be transferred or sold to another party without the consent of the other owners. If a tenant in common dies while in possession of the property, her portion of the property will go to her heirs.

The second most common form of joint possession of real property in Rhode Island is joint tenancy. Joint tenancy is the primary form of joint property ownership for married couples, although any group of two or more persons may elect to hold property as joint tenants if they desire and the other requirements for a joint tenancy are met. Joint tenancy is similar to a tenancy-in-common, however, there are a few key differences.

The idea behind owning and maintaining Rhode Island rental properties is to make a profit. Indeed, managing a rental portfolio is a good way to earn passive income. Like any business, one of the primary challenges as a landlord is to ensure that a property is generating a positive cash flow. Everyday expenses such as maintenance, taxes and registration requirements can quickly eat away at rental income. Landlords may also be liable for any injuries that occur on their property. If landlords are not property protected, their personal assets can be put in jeopardy. Thus, taking steps to manage the risks associated with rental properties is a crucial step that Rhode Island landlords should consider.

Whenever someone is injured on another’s property, the injured party may pursue a Rhode Island premises liability claim against the landlord. Figuring out who is liable in a slip and fall accident involving a landlord/tenant relationship is not always straightforward. For example, courts will look to how the injury occurred, who is in charge of maintaining the premise, and whether the landlord had any knowledge of the hazard that caused the tenant’s injuries.

The first person a tenant will look to after being injured at a rented home or apartment is likely the landlord. Rhode Island landlords have a few options when it comes to dealing with these risks. Two of the most common ways to deal with these risks are forming a Limited Liability Company (LLC) or purchasing an umbrella insurance policy.

A variety of Rhode Island property law issues that require legal advice can affect property owners in the state. One such issue is eminent domain, which is the way that a state, municipality, or other entity granted eminent domain power by statute can take personal property for government use. Government entities must follow state and federal law in exercising eminent domain power, and the laws are designed to be fair to the private property owner who is giving up their property.

A commonly recognized use of eminent domain powers is for the construction or widening of roadways, however, there are several acceptable uses that allow the government to take private land. Rhode Island General Laws section 42-64.12-6 lists these uses as:

• Providing for the public’s ownership and use;

For the most part, property owners can do what they wish with their property. However, Rhode Island property law steps in to provide some guidance and regulation of how landowners use their land. For the most part, this is to ensure that others who own nearby property are not negatively affected by a landowner’s decisions.

One of the more common issues that arise between neighbors involves the lawfulness of a property owner’s fence. In many situations, fences are necessary to keep people or animals out; however, fences can also have a deleterious effect on the “feel” of an area or neighborhood. Fences can also obstruct nearby homeowners’ view, or, interrupt their access.

It may come as a surprise to some homeowners, but Rhode Island fencing law outlines precisely what types of fences are permitted. For example, below is a list of permissible fences, discussed in terms of minimum height:

One of the more complex areas of Rhode Island real estate law is zoning. Zoning refers to the process in which a city or town divides land and designates certain permissible or prohibited use. For example, Rhode Island zoning laws govern whether a homeowner can run a retail business out of the first floor of their home or whether a manufacturer can construct a factory on a specific plot of land.

Historically, the state government allowed local municipalities to make their own zoning decisions. However, after being confronted by the reality of having a total lack of a uniform zoning system, the state government passed the Rhode Island Comprehensive Planning and Land Use Act (the Act). The Act was designed to implement a state-wide zoning system while still allowing municipal discretion.

The Rhode Island zoning laws impose several layers of restrictions. First, all land is broadly classified into the following categories, known as zoning districts: