When Catastrophe Strikes

This week scores of homes in Andover, Lawrence and North Andover were damaged or destroyed in a bizarre series of gas explosions.  Now that the emergency has passed those whose homes were involved are left the reality that their lives have been turned upside down.

As folks start to sort through the situation, here are our thoughts from a legal perspective.

1. If you own your property, call your insurance company.  If you don't remember your insurance company's name and your paperwork is lost, destroyed, or inaccessible, call your insurance agent.  They can help you make the claim.  You can do this by phone, but you'll want to follow up and put the notification in writing.  It does not have to be anything formal, an email will do, but you should have a paper trail.  Even if your home was not harmed, but you had to be evacuated, you may want to check with your homeowner's policy.  You may have coverage for things like hotel stays, meals and the like.

2. If you rent your property and had renter's insurance, be in touch with your renter's insurance company.

3.  Make a claim with Columbia Gas.  Beginning Sunday, September 16, it will be at the Lawrence Public Library everyday from 8am-5pm.

4. People may show up at your property and get you to sign on with them.  Who are these people?  Public insurance adjusters, general contractors, demolition people and others.  DO NOT sign with these folks, at least not yet.  You may need some or all of these tradespeople to help you, but don't just sign with the first person who shows up on your lawn.  Get references from friends, family, and co-workers.  Take the time to investigate each person just as you would if you planned to do a home renovation.

5.  As mentioned above, your insurance should cover living expenses while your home is being repaired or rebuilt.  Check into your coverage as soon as you can with your insurance company so you can find a suitable place to rent.  In the meantime, keep all your receipts for reimbursement.

6.  A public insurance adjuster can be a real help if you feel that your insurance company is not adequately compensating you for your losses.  However, you may not need such a person in this case.  First, if your insurance company is going to pay you your whole policy, then you don't need to pay someone to fight for you.  You are getting the entire value of what you'd be entitled to.  Second, depending on how Columbia Gas handles the situation, your insurance company may end up being minimally involved.  If you do choose to hire one, make sure they are licensed and have good references.

7.  When you renovate a home, you must bring the home up to the current building code.  Here in Massachusetts, most homes that undergo any renovation, planned or otherwise, must have code upgrades.  Code upgrades are covered by separate provisions in your policy over and above the policy amount.  Typically, that amount is 10% of the policy amount, but you'll need to check your policy as the percentage does vary.  In other words, if you have a policy valued at $350,000, and your code upgrade is 10%, you then have $35,000 for code upgrades.

8.  Knowing and understanding how your policy works is critical.  Knowing how any contractor that you plan to hire works is also critical.  Give serious thought to having a lawyer review any contract you plan to enter, especially one with a general contractor.  You can read about considerations of hiring a contractor in an earlier blog post.  Before you sign any contract for renovation or repair work,  you MUST have a clear understanding of the scope of the work.  Are code upgrades included in the price you have been given?  Many times they are not and homeowners are caught off guard when they learn that the property must be re-wired and that the electrical cost provided in the quote by the contractor does not include this work.

9.  If your home is not completely destroyed, take photographs and videos to document your possessions.  You will need to come up with a list of items so you can be reimbursed for your lost personal property.  If, unfortunately, your home was completely destroyed.  Go through your home, room by room and visualize what was in your home and make a list.  Ask others who might have photos or who frequent your home to help you out.

10.  Don't hesitate to get emotional and mental health support.  What happened this week in the Merrimack Valley was traumatic.  Even if you were not physically injured, there may be a psychological impact on you and/or your loved ones. 

Massachusetts Equal Pay Act

In an earlier post we discussed the implementation of the Pregnant Workers Fairness Act that just went into effect.  Another significant update to the Massachusetts employment landscape is coming down the pike and taking effect on July 1, 2018:  the Massachusetts Equal Pay Act (MEPA).  The Act will prohibit discrimination in the payment of wages for “comparable work” based on an employee’s gender.  While it was already illegal to pay women and men differently based upon their gender alone, the Act further defines and gives teeth to remedy such pay disparities. 

The Act also prohibits employers from inquiring about a potential employee’s salary history, and prohibits employers from barring employees from discussing their wages.  The purpose behind these restrictions is to help close the disparate pay gap that exists between men and women in Massachusetts.  The Attorney General cites that in Massachusetts women earn 84.3% of what men earn in full time positions.

Of course, the new Act contains exceptions in explaining pay disparities.  If the employer can show a legitimate business interest for the disparate pay decision, then it will not be in trouble under the Act.  Such interests could include different geographic location, differences in education or training related to the job, or even a bona fide seniority system.  Employers also have an affirmative defense under the Act if they perform a good faith self-audit once every three years to address any wage disparities and check for issues.

The penalties for violating the Act are harsh and include double damages, and costs and attorney’s fees.  The statute of limitations is 3 years; however, in following the Ledbetter case, every time a paycheck is issued in the disparate wage amount, the statute of limitations begins ticking anew.

The Massachusetts Attorney General’s Office recently issued some guidance on how employers can interpret the new law’s provision and come into compliance.  While helpful, it is likely that the courts will be busy over the next several years further clarifying how it is to be applied.

Pregnant Workers Fairness Act

A very important update in Massachusetts employment law just went into effect on April 1, 2018:  the Pregnant Workers Fairness Act.  The Act amends the current discrimination law to prohibit employment discrimination on the basis of pregnancy and pregnancy-related conditions, including postpartum issues such as lactation.  The Massachusetts Commission Against Discrimination (MCAD) issued some guidance on the new Act here.

In short, employers cannot take an adverse action against an individual who requests or uses a reasonable accommodation for pregnancy or pregnancy-related condition.  The MCAD emphasizes the need for an employer to engage in an “interactive process” with the employee, which is essentially the need for the parties to communicate, in good faith, about what accommodations can be made to ensure that the employee is able “to perform the essential  functions  of  the  job  while  pregnant  or  experiencing  a  pregnancy-related  condition,  without undue hardship to the employer.”

There are also new restrictions on when and for what the employer can ask for medical documentation, as well as new notice requirements from the employer to employee regarding their rights under the Act.

Whether you are an employee or an employer, make sure you read the Act in full to understand its implications, penalties, and protections.

Insurance Claims and Code Upgrades

    When you have a catastrophic event at your home and you have insurance, one of your thoughts might be thank goodness I have insurance. And it is good that you have insurance.  But, the question quickly arises as to what the insurance will coverage.  What insurance covers and what it does not is a pretty confusing question and often depends on what riders you have.

     When your house has damage, say, from a fire, all the repairs have to be done to the current code.  In other words, if your home had electrical wiring from 1968 and it was damaged in the fire, then all the electrical must be brought up to current code.  Insurance policies in Massachusetts traditionally provide code upgrades up to to 10% of the policy.  If you have a $500,000 policy, then the insurance company will pay $50,000 towards code upgrades.  

     A catastrophe is a time of great stress.  You may find that insurance adjusters and/or contractors show up at the fire to try to get you to sign with them.  Do not sign with anyone on the day of the fire.  If your home is a total loss, then you probably don't need an adjuster, you are going to get the whole of the policy.  You don't need anyone to advocate for you and take 10% of your proceeds.  In any event, do not sign any documents the day of the fire.  Take a little bit of time to take a deep breath and take stock.  I promise you, adjusters will be happy to help you, if you decide you need them a few days later.

     When meeting with contractors, find out whether code upgrades are included in the contract price or not.  If they are not included in the price, then secure estimates for the cost of those upgrades before signing with the contractor.  Also, check the scope of the work carefully.  If your contract is tied to the insurance adjuster's scope of work, you may find that certain things are excluded from the scope of the work because the adjuster did not note the issue.  For example, if the insurance company deems that just one wall of your living room needs painting, then double check to see if the quote from the contractor provides for a fresh coat of paint for the whole room or just that one wall.  If that fourth wall is not included, then you will either not get it painted or you will pay extra for it.

     Sometimes, a contractor can swap out something the insurance will pay for, for an upgrade or something you want done, that is not covered by the insurance money.  If you plan on doing some "while we're at it" changes, be clear with the contractor as to the cost. If you are foregoing something called for in the insurance adjuster's report, then make sure all the changes are in writing.

     Finally, just because you receive funds from the insurance company, that does not mean the contract is entitled to them.  Similarly, just because the insurance company says something needs to be fixed that does not mean that your contractor is obligated to do that work.  Review all documents carefully.  Understand the scope of the work included and understand what unknowns might possibly arise during the work.  If you have questions or are unsure, ask questions and consider consulting with an attorney before you sign the contract.



   



   

Building Permits and Local Ordinances

We recently touched on the issue of obtaining building permits in home improvement work.  In addition to state requirements, most cities and towns have their own local ordinances that govern home construction.  You are likely aware that cities and towns dictate zoning and setback requirements, but did you also know that local ordinances can also put further conditions on the manner and means of pulling a building permit?

The City of Waltham is currently contemplating a new ordinance governing the issuance of their building permits.  The proposed ordinance would impose more onerous requirements on the applicant for building permits on construction projects that are estimated to exceed $500,000 – so the ordinance would not apply to minor home improvement projects, but could very well apply to new construction or significant additions.  Among the proposed requirements, the ordinance would disallow such permits to be issued to any firm that has “been debarred or suspended from performing construction work by any federal, state or local government agency or authority in the past three years.”  The proposed ordinance also places more stringent requirements in regards to workers compensation insurance and compliance with wage and hour laws.  

When hiring a home improvement contractor, talk with them about their experience in your city or town.  Contractors tend to focus most of their work in one or several towns, making them more experienced in dealing with the local building departments and inspectors.  The more work they do in your city or town, the more likely they will be familiar with local requirements – and the more likely it will be that the permitting process will go smoothly.

You may also want to speak with your local building department to ask about your potential contractor before hiring him or her.  The city officials might have some valuable insight about your contractor.

Another Trap for the Unwary - Building Permits

On this blog we previously discussed what to look for when hiring a home improvement contractor.  But what about after you hire that contractor?  Another trap for the unwary is during the process to obtain the building permit.  Under the Massachusetts Home Improvement Contractor statute, in order to avail yourself of some of the statutory benefits available to homeowners, the contractor must pull the building permit.  Resist any attempt by the contractor to convince you otherwise.  If a contractor insists on the homeowner pulling the permit, this may be a sign that something is not quite right with the contractor.  It may be that the contractor is not licensed, or is uninsured.  

If the homeowner, rather than the contractor, pulls the building permit the homeowner is no longer eligible to participate in the Home Improvement Arbitration Program or the guaranty fund.  Both of these programs were set up by the Commonwealth of Massachusetts specifically to assist aggrieved homeowners.  What’s more, by pulling the building permit, the homeowner takes on significant liability for the project and may take on liability for the workers performing the work.

If you’ve done your research you can reduce the risks of being caught off guard by a contractor trying to skirt the rules.

Requirements for a Home Improvement Contract

As we have posted before, when you undertake a home improvement project -- a renovation, an addition, finishing a basement -- the contract between the homeowner and the contractor is likely covered by Chapter 142A.  Chapter 142A has some specific requirements for contracts.  In this post, we are going to focus on the requirement that the contract include a detailed description of the work to be performed and the materials to be used.

What does that mean?  It means that the contractor must tell you exactly what materials he or she plans to use.  For example, the contract should specify the brand of paint and the specific product line - Benjamin Moore paint, Aura line or Sherwin Williams paint, ProMar 200 line (the listing of any product or brand is not an endorsement, merely exemplary).   The contract should not just specify the finishes, but also the materials that you won't see, like insulation. You should know the R value -- the higher the R value the better an insulator -- of the insulation, whether a water/vapor barrier, like Tyvek is being used on your project.  When a contract complies with this statutory requirement, the contractor can properly estimate the cost and the homeowner can understand exactly what they are getting.  If the contract specifies American Standard bathroom fixtures, then there will not be a misunderstanding about what type of faucet was installed. If the homeowner wants Kohler faucets, they must speak up and work out any price differential with the contractor.  At the same time, the contractor can provide an allowance based on that specification and kept its costs managed.  In short - the more detail the better.  It minimizes misunderstandings about what is being done and used on the project.

The detail required for the scope of the work is no different.  The requirement is for the benefit of both sides. The homeowner should know, for example, whether interior walls are being insulated. If they are, then the contractor must calculate that into its costs as it prices the job.  If the scope of work does not include such an entry, then the homeowner can ask about it and tell the contractor that they want the insulation to reduce noise.

The lack of details and hence, misunderstanding from the start of the job.  By complying with the law, both sides are protected and understand what is being provided.

Are Housemates the Solution to Lowering your Housing Costs?

Massachusetts housing costs are very expensive -- rent is expensive and the prospect of buying a home may seem completely out of bounds if you are single or on a limited income.  Lately, we've been working with people who have tried to manage their housing costs by purchasing a property and renting rooms in their home out to others.  While this can be a great way to offset some housing costs, there are some things you must consider.

• How many rooms are you renting out?  Many cities and towns have zoning rules which consider a residence who has 4 or more unrelated people living together (including the owner) to be a rooming house.  Rooming houses have zoning and other restrictions.  Check with your municipality to determine the rules.

• Have a written agreement.  Not only should the lease include typical terms like the duration of the lease and the amount of rent, but include lifestyle rules.  Are pets allowed?  What about quiet hours?  What are the rules regarding the kitchen?  Does everyone need to have their own ketchup or can food be shared?  When you are renting an apartment or a house, these things may not be as important (or may be completely irrelevant).  However, when you are sharing your house or condominium with someone, you need to consider what your day-to-day interactions are going to look like.  You should also consider how the relationship ends.  It might make sense that you or the other person can end the tenancy with 30 days' notice.  While it diminishes certainty of income, it gives you the freedom to terminate a lease with a housemate who just is not working out.

• Be up front with prospective housemates.  If you host a dinner every Wednesday with your friends and they stay until 11 pm each week, then say so. If you want only to rent to vegetarians, be clear in your advertisement.

• Be prepared to be a good housemate yourself.  Think of housemates as permanent visitors. If you share your house with others, you must also be a considerate resident.  

• Make sure you handle any last month's rent and security deposit correctly.