Massachusetts Local Counsel Available for Businesses, Individuals, and Attorneys

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By Robert Nislick

If you are businessperson with a corporate dispute in Massachusetts but you are headquartered outside of the Bay State, or you own real estate or a rental property in the Commonwealth but live elsewhere, or you are an attorney for a company that has just been sued in Massachusetts, you may need to find and hire local counsel to represent you in Massachusetts.

Attorney Robert Nislick is a Massachusetts lawyer who is admitted to practice in all Massachusetts state courts, and also in the United States District Court for the District of Massachusetts, and also in the United States Bankruptcy Court for the District of Massachusetts.

Over the course of my legal career, I have worked with businesses, individuals, and attorneys located outside of Massachusetts, who have had a need for a lawyer in Massachusetts, including from California, Colorado, Connecticut, Florida, Iowa, Maine, Michigan, Nevada, New Hampshire, New Jersey, New York, Rhode Island, South Carolina, Texas, Utah, Vermont, the United Arab Emirates and the United Kingdom.

Call or e-mail Massachusetts lawyer Robert Nislick when you need to team up with an experienced local Massachusetts attorney to help with a business matter, a real estate dispute or transaction, or a lawsuit.

Options to Purchase Real Estate in Massachusetts

By Robert Nislick

You are a Massachusetts commercial tenant or landlord. The lease contains a provision that gives the tenant an option to purchase the leased premises from the landlord.

An option to purchase real property is a “contract by which an owner of realty enters an agreement with another allowing the latter to buy the property at a specified price within a specified time, or within a reasonable time in the future, but without imposing an obligation to purchase upon the person to whom it is given.” Black’s Law Dictionary 1121 (7th ed. 1999).

“An option should specify the period and the manner in which it may be exercised by the buyer, and in addition should contain, or incorporate a separate agreement containing, all of the same provisions as are appropriate to a purchase and sale agreement.” E.C. Mendler, Massachusetts Conveyancer’s Handbook § 2.3 at 45 (3rd ed. 1984).

Suppose that a landlord and tenant have negotiated a long-term lease which provides the tenant an option to purchase the building. Since the inception of the lease, property values have increased substantially. The tenant wants to buy the property from the landlord. The landlord does not want to sell the property to the tenant. The landlord would prefer to sell the property to someone else for more money.

What is the tenant’s remedy? The tenant can file a lawsuit seeking specific performance against the landlord. “Specific performance is a proper remedy to enforce a valid option to purchase real property.” Greenfield Country Estates Tenants Ass’n, Inc. v. Deep, 423 Mass. 81, 89 (1996).

What are the landlord’s defenses? The landlord will want to try to demonstrate that the tenant failed to properly exercise the option in the time specified and in the manner required by the lease. It is possible that the option may also contain a clause that says the option is not valid if the tenant is in default of the lease. The landlord may also try to argue that the language in the option is too indefinite to be enforced.

About the author: Robert Nislick is a Massachusetts real estate lawyer.  He can be reached at (508) 405-1238, or by e-mail at rob@nislick.com.

Commercial Tenants’ Rights and Remedies in Massachusetts

By Robert Nislick

You are a Massachusetts commercial tenant. Your company leases space and pays a handsome rent to your Massachusetts commercial landlord. Unfortunately, the landlord utterly fails to maintain the leased premises. The condition of the space is so poor that it affects your ability to operate your business. What can you do?

One question a commercial tenant might ask is whether there is a right to withhold rent. The answer is no. In sharp contrast with the law governing residential tenancies, Massachusetts law recognizes no right of a commercial tenant to withhold rent.

Suppose that a commercial tenant stops paying rent because the conditions of the leased premises are defective. The landlord terminates the tenancy and commences a summary process action. In addition to attempting to assert a rent withholding defense, the commercial tenant also files counterclaims based on the bad conditions.

In this situation, a court is highly likely to dismiss the tenant’s counterclaims. “[T]he summary process statute precludes counterclaims in commercial actions”. Fafard v. Lincoln Pharmacy of Milford, Inc., 439 Mass. 512, 515 (2003). Moreover, a tenant’s argument that the landlord breached the lease “does not justify withholding rent”. See Fafard, 439 Mass. at 516.

What if the commercial tenant simply stops paying rent? Unless “the breach of contract has an extortionate quality”, “a failure to perform obligations under a written lease, even though deliberate and for reasons of self-interest, does not present an occasion for invocation of c. 93A remedies. Conventional damages achieve the goal of compensation, particularly because written leases often, as here, provide that the landlord may recover the legal expenses of pursuit, plus interest at the rate of twelve percent.” Atkinson v. Rosenthal, 33 Mass. App. Ct. 219, 226 (1992). This case generally stands for the idea, even if the tenant’s breach is intentional, the tenant will probably not be liable to the landlord under G. L. c. 93A, but still may have to pay the landlord’s attorney’s fees if the lease provides for it, in addition to the rent owed, and interest. Note that it is not recommended that any party, landlord or tenant, breach its contractual obligations.

If the landlord terminates the tenancy, will the tenant still have to pay rent? “It is well settled in the Commonwealth that when a landlord terminates a lease following the default of a tenant, the tenant is obligated to pay the rent due prior to the termination but has no obligation to pay any rent that accrues after the termination unless the lease otherwise provides.” 275 Washington Street Corp. v. Hudson River Int’l, LLC, 465 Mass. 16, 21 (2013).

The tenant will still most likely have financial obligations to the landlord even after the lease is terminated, such as “payments in an amount equal to the rent he had been paying”, or liquidated damages, rent acceleration, or indemnification. See 275 Washington Street Corp., 465 Mass. at 21-22.

Do any viable remedies exist for the commercial tenant? A commercial tenant may be able to terminate the lease based on the landlord’s failure to keep the building in proper repair.

In Wesson v. Leone Enters., Inc., 437 Mass. 708 (2002), the Court adopted the rule of mutually dependent covenants as contained in the Restatement (Second) of Property (Landlord and Tenant) § 7.1 (1977), such that:

“Except to the extent the parties to a lease validly agree otherwise, if the landlord fails to perform a valid promise contained in the lease to do, or to refrain from doing, something . . . and as a consequence thereof, the tenant is deprived of a significant inducement to the making of the lease, and if the landlord does not perform his promise within a reasonable period of time after being requested to do so, the tenant may (1) terminate the lease . . . .” Wesson, 437 Mass. at 720.

Another potential theory the tenant may pursue is based on constructive eviction. It is difficult, however, to prove constructive eviction in the commercial context. The tenant would need to prove that the defects made “the premises untenantable for the purposes for which they were used. See Wesson, 437 Mass. at 715.

A commercial landlord does have a statutory duty to correct unsafe conditions. “[T]he statutory duty of a landlord under G. L. c. 186, § 19, to exercise reasonable care to correct an unsafe condition described in a written notice from a tenant applies to commercial leases.” Bishop v. TES Realty Trust, 459 Mass. 9, 11 (2011).

G. L. c. 186, § 19, states in pertinent part:

“A landlord or lessor of any real estate . . . shall, within a reasonable time following receipt of a written notice from a tenant forwarded by registered or certified mail of an unsafe condition, not caused by the tenant . . . exercise reasonable care to correct the unsafe condition described in said notice . . . . The tenant . . . injured as a result of the failure to correct said unsafe condition within a reasonable time shall have a right of action in tort against the landlord or lessor for damages.”

G. L. c. 186, § 19.

Nevertheless, in Humphrey v. Byron, 447 Mass. 322 (2006), the Court rejected a request to impose a duty on commercial landlords “to exercise reasonable care to assure that others legitimately on the leased premises were not subject to an unreasonable risk of harm.” Humphrey v. Byron, 447 Mass. 322, 323 (2006).

About the author: Robert Nislick is a Massachusetts real estate lawyer. He can be reached at (508) 405-1238, or by e-mail at rob@nislick.com.

Contracts Law and Attorney’s Fees Provisions in Massachusetts

By Robert Nislick

Contracts. Everyone enters into them. Most people fulfill their contractual obligations. Some people do not. There may be a good explanation for why someone has not satisfied his or her contractual obligations. Most of the time, however, there is no good excuse to evade your duties under an agreement.

For the most part, the most prudent advice an attorney can give to a client is to live up to the agreements you have made. This may mean paying for services rendered, or frequently it may mean, doing something you agreed to do.

A large part of the attorney’s job is to bail people out of problems that arise, either when the other person breached a contract, or when the client has allegedly breached a contract and has been sued.

Another large part of the attorney’s job is to help prevent the client from getting into a bad deal to begin with. A client may tell her lawyer about a great business opportunity she is contemplating to undertake with someone else, only to have the lawyer throw a wet blanket over it.

The attorney should anticipate all of the worst-case scenarios that may arise and point them out to the client ahead of time. Maybe everything will work out great. However, business relationships fall off the rails all the time.

When I am drafting a contract for someone, I try to protect the client as best as possible, and I look for ways to get the client out as cleanly as possible if the business relationship goes sour. I have reviewed contracts drafted by other lawyers, including some which have placed one side at such a disadvantage that I cannot believe the lawyer would ever have let the client sign on the dotted line.

In thinking about what can happen when a business venture falls apart, the prospect of having to engage in long, uncertain, expensive, and torturous litigation should not come as a surprise.

Based on the language contained in some contracts, the prevailing party may be entitled to an award of his attorney’s fees. In other words, if there is an attorney’s fees provision in the contract, the loser in the case may have to pay the winner’s attorney’s fees.

Does it always work this way? No.

“The usual rule in Massachusetts is to prohibit successful litigants from recovering their attorney’s fees and expenses except in a very limited class of cases. This rule is known as the ‘American Rule.’ See Waldman v. American Honda Motor Co., 413 Mass. 320, 321-323 (1992). Our traditional approach has been to prohibit recovery of attorney’s fees and expenses in a civil case in the absence of either an agreement between the parties, or a statute or rule to the contrary, and this principle has been applied to deny recovery of attorney’s fees and expenses in declaratory judgment actions.” Preferred Mut. Ins. Co. v. Gamache, 426 Mass. 93, 95 (1997).

“As a general rule in Massachusetts, a litigant must bear his own expenses including attorney’s fees, except where a statute permits the award of costs, a valid contract of stipulation provides for costs, or rules concerning damages permits recovery.” Judge Rotenberg Educational Ctr., Inc. v. Commissioner of the Dept. of Mental Retardation, 424 Mass. 430, 468 (1997).

When drafting a contract, is it a good idea to include an attorney’s fees provision? It is hard to give a definitive answer because every situation is different. I have had clients benefit from contractual attorney’s fees provisions.

But I am not always a fan of attorney’s fees provisions in contracts. One reason is that the specter of having to pay the other side’s lawyer may deter a party from pressing what may actually be a meritorious claim. Another reason is that a party with greater resources may feel emboldened to litigate over a small dollar amount against a weaker opponent, when it might not otherwise be worthwhile to expend resources on such a claim.

Similarly, the expectation of winning an attorney’s fee award may deter the parties from negotiating in good faith to solve their problems. Such a situation may also occur where statutes, like the Consumer Protection Act, G. L. c. 93A, or the Condominium Act, G. L. c. 183A, or Massachusetts’s anti-discrimination law, G. L. c. 151B, may obligate one party to pay the other’s attorney’s fees. The issue of attorney’s fees may end up dominating the litigants’ decision making, and actually prevent the resolution of a dispute.

Assuming a party prevails in a case where an attorney’s fees provision is at play. How does the court determine what constitutes a reasonable award of attorney’s fees? “While the amount of a reasonable attorney’s fee is largely discretionary, the judge . . . should consider the nature of the case and the issues presented, the time and labor required, the amount of damages involved, the result obtained, the experience, reputation and ability of the attorney, the usual price charged for similar services by other attorneys in the same area, and the amount of awards in similar cases.” Linthicum v. Archambault, 379 Mass. 381, 388-389 (1979).

The prevailing party should not expect that the court will require the other side to compensate him every last cent in attorney’s fees that he expended. The court has a lot of discretion to make substantial cuts to the amount of attorney’s fees sought by a party, and often does.

About the author: Robert Nislick is a Massachusetts business and contracts attorney. He can be reached at (508) 405-1238, or by e-mail at rob@nislick.com.