Thursday, March 10, 2016

Do you need a will?

     The answer, as with many things in the law is -- it depends.  Before answering the question with a little more clarity, let me explain what a will is.  A will is a legal document that allows you to designate where your property goes when you die, who you want to be in charge of making sure the property goes where it is supposed to go and appoint guardians and conservators for your minor children.

     If you do not have a will and you die, then your property passes by what are called the laws of intestacy.  In other words, Massachusetts has a law which says how property is distributed if you die and you do not have a will.

    Regardless of whether you have a will, some of your property may  not pass via the instructions in your will.  Insurance policies and retirement accounts pass to the person or people you designated in those documents that you filled out when you bought the policy or with your human resources office or investment broker.  Real estate held as tenants by the entirety or held as joint tenants passes to the survivor listed on the deed.  Bank accounts held jointly also automatically become the property of the other owner of the account.

     If you own nothing in your own name, not even your car and all of your major assets are tied up in jointly held real estate, insurance policies or retirement funds, you may think you do not need a will.  I would still advocate that you should have one anyway.  Why leave it to the legislature to decide where your money should go?  You may also have some personal property such as a wedding ring or fine china that you want to designate to certain loved ones.

     In addition to the will, you may need other estate planning documents such as a durable power of attorney, a health care proxy and one or more trusts.  You should consult a lawyer about what works best for you depending on your finances and your personal situation.


Monday, March 7, 2016

Hiring a home improvement contractor

     It is that time of year -- the "for sale" signs are up, and the crocuses will be up soon.  As we joke in our family, very shortly, the for sale sign comes down and the dumpster appears in the driveway and the building permit in the window.  Whether you are buying a new home and renovating or sprucing up the house you have, here are some things to consider before you let a contractor do work on your house.

  • Contractors in Massachusetts should have both a home improvement contractor registration and a construction supervisor license.  Make sure your contractor has both.
  • Ask friends, family, colleagues, and neighbors for referrals. Receiving a referral from someone you know is often the best way to find the best person to do the job.  But don't rely solely on the referral.  Do your homework.  
  • Make sure that the contractor can do the job for you.  In other words, if the contractor mostly renovates kitchen, he may not be the right person to bump out that dormer on the second floor.
  • Ask the contractor for the names of the last 3 projects he has completed or is presently working on. Also, ask to visit one or more of his current work sites.  If a contractor will only give you references make sure that the projects were completed in the last year.
  • Find out what kind of insurance your contractor has.  Keep in mind that it is rare that a contractor has insurance that will pay you for a claim that the contractor was negligent.  Most policies exclude poor workmanship from coverage.
  • Make sure you have a contract in writing and that the contract includes basic items like payment terms, termination, and language required by Massachusetts law.  

Wednesday, March 2, 2016

Month to Month Tenancies

     When we receive a call at the office from a potential tenant client, the first thing we need to determine is the type of tenancy the tenant has.  If you have no written lease, then the tenant has a month to month tenancy.  That means that the landlord or the tenant can terminate the rental relationship on one full month's notice.

     Not having a lease has advantages and disadvantages for both landlord and tenant.  If you are a tenant, no lease means you can move fairly easily and quickly.  This can be great if you don't like the place, get noisy neighbors or decide to purchase a home.  It can be less than ideal because the landlord can require you move on as little as 30 days' notice for any reason that is not discriminatory.  The landlord can also seek to raise your rent at anytime.  If you receive a notice to quit and do not have a lease, you will need to move.  There may be some negotiating with the landlord to figure out a time that is mutually convenient, but ultimately, you must move.  This is true even if you have lived in the unit for a very long time.

     From the landlord's perspective, not having a lease gives you the freedom to evict someone without reason.  For example, if a tenant has  lease, is paying rent and generally abiding by the terms of the lease, but the landlord just does not like the tenant (for some non-discriminatory reason), the landlord does not have grounds to evict the tenant and must live with the tenant through the end of the lease term.  With no lease, a landlord can send a notice to quit and with any luck, the tenant will move.  The tenant can have the property available on reasonably short notice for a friend or relative who needs a place to live.  You may also be able to charge a bit of a premium as there are certain groups of people in need of temporary housing.  These would include people doing renovations on their home (either by choice or because of some sort of catastrophe), people moving out of their residence because of a divorce, people relocating, and people with temporary job assignments, just to name a few.  The disadvantages for the landlord are that the tenant could leave at anytime and you could end up with a bit of a revolving door at your unit.  Re-renting a place takes time, effort and expense.  You also do not have the chance to specify rules or regulations that you wish to have followed.

     So when is it better to have a lease as a tenant?  If you plan on staying where you are for at least a year and do not want to move, you should seriously consider a lease.  Similarly, if you have been in a unit for a number of years and do not want to move, you should make sure your lease is renewed.  On the other hand, if you fall into any of the above categories -- recently separated or divorced, moving to a new town, or desirous of home ownership, then a month to month tenancy would be better for you, unless the landlord is willing to give you a short term lease.

     From a landlord's perspective, in most cases you are better off having a lease.  Your tenant is responsible for rent for twelve months and you can specify the terms of the tenancy.  You can say no smoking, no waterbeds or no space heaters.  You can charge a tenant for gas or electricity of separately metered.  You can indicate fees for rent not paid for 30 days.  However, there are a few situations when you may not want to have a lease.  For example, if you purchased the property with the intention of having a family member move in and the date of move in is uncertain, then perhaps you want to rent the unit for a few months.  Depending on your town, it may be easy to rent properties and you are happy with the premium you can get for rentals of several months at a time because there are always people who want to rent.  You may not want a lease if you live in the same building as the rental unit and want to see if you and the tenant get along without being locked into a year long lease.

     Finally, you can have a written month to month lease which could be a good combination in many circumstances.  The amount of time which must be given to terminate the lease can be spelled out, so you can make it 60, rather than 30 days.  The landlord also can spell out specific terms it wants included.  Both sides still have flexibility in moving out, but neither side has a guarantee of housing (for the tenant) or income (for the landlord).