Category Archives: Customer Service

Saving Deals and Saving Time–Use and Occupancy Agreements Are “All-Purpose Solutions”

Customer Service, Uncategorized,

In Massachusetts, where I practice real estate law, lenders and developers often do not live up to their promises. That Unit which, for sure, is going to be ready by the end of the month, still has requires major finish work. “On my God, your loan got stuck in underwriting, and even though we issued a commitment and knew that you needed to close by January 29th, we just are not ready.” How many times have we all heard this and cringed, because our clients have no place to live and a truckload of furniture and furnishings are driving around somewhere in a moving van or storage facility, accruing daily charges at an alarming pace?

The solution to these, and many other problems, can be a well-drafted Use and Occupancy (“U and O”) Agreement. There are some caveats here:

     1. You cannot utilize a Use and Occupancy Agreement if an occupancy permit for the dwelling has not issued. Living in a dwelling under with a C of O poses insurance, and even legal risks.

 

    2. A Seller should NOT enter into a U and O if there is any real doubt that the delay with the lender is ministerial and not substantive. In other words, even though a U and O states that it is only a license to inhabit, and not a Lease, if the Buyer’s mortgage loan does not come through, the Seller may have to evict the Buyer from the dwelling, notwithstanding the language in the U and O.

    3. Make sure the title to the premises is clear. I have had clients enter into longer-term U and O agreements, and then run into title problems when they were ready to close on the purchase.

    4. Do a Walk-through of the dwelling before the Buyer takes occupancy. Normally, this walk-through will be the final inspection called for in the Purchase and Sale Agreement. Therefore, this will be the time to note, and deal with, conditions in the dwelling which do not comply with the terms of the Purchase and Sale Agreement.

Assuming all of the hurdles set forth above are not problems, I often draft U and O Agreements, which permit occupancy prior to closing. Among other things, these are the items which must be considered and included in a well drafted U and O Agreement:

     1 Financial Terms.  Normally the U and O licensee pays the principal, interest, tax and insurance for the dwelling. The Seller should be able to present evidence of all these items so there is no confusion.

     2. Term of the U and O. That varies from deal to deal. It is important ,however, to provide for a large payment due from the Buyer should the Buyer “hold-over” after the agreed upon term. For example, if the U and O fee is $100 a day, after the term is over, it increases to $250 a day. This protects a “squatter” situation by the Buyer.

     3. Escrow Held by an Attorney. This needs to be substantial (at least $2,500) to protect the Seller from a “holding-over” Buyer or physical damage done by a Buyer who does not close.

     4. Other Terms. Payment of utilities is usually a Buyer requirement. Other items like condominium common area charges are similarly treated. It is important to set forth what standard of cleanliness is required at the termination of the U and O, if a sale is not completed.

At Topkins & Bevans, we do Use and Occupancy Agreements on a regular basis. We will soon  be including some standard types of Use and Occupancy Agreements on our website, www.topkinsandbevans.com. Those of you who are in the business of buying and selling real estate should know about Use and Occupancy Agreements. They may be the “secret weapon” you can use to hold a wobbly deal together.

Fixed fee Billing for Purchase Transactions and Sale Transactions–I have found this the only way to provide effective representation to my Massachusetts clients

Customer Service, Marketing / Communication

I am a Massachusetts real estate attorney with over 40years of experience in the field of titles and conveyancing. If I don’t know how to do a residential real estate transaction by now, it it pretty obvious that I will never know. I am not saying I know every nuance of every kind of a transaction: I am saying my years of experience  have pretty much shown me what to expect in terms of time and expertise in any matter I am asked to get involved in.

That being said, I now take the position, in all residential real estate transactions, of providing my client with the option of a fixed fee for representation. I take a look at the scope of the deal, determine what amount of time I reasonably would expect to spend on the matter, and tell the client what the fixed fee will be. I ask for one-half of the fee as a retainer; the remainder of the fee can be paid at the closing table, by the Buyer or the Seller.

Once the fixed fee is agreed upon, there are no more discussions about billing. I keep my end of the bargain, in all instances. Sometimes (not often) I overestimate the time I need to spend on the matter, and the fixed fee presents a small windfall for me. It is more often the case, however, that I spend more time on the matter than anticipated. That has not proved to be a major matter of concern, and I  never,ever to mention that fact to my client. From my point of view, it is business risk I have assumed, and it generally has nothing to do with the client.

The results of this fixed fee approachhave been gratifying. I have clients who communicate, who ask questions. They do not call all the time. A few are somewhat pesty. You have the same problems as realtors or mortgage originators. The best effect,for me, is that my clients are unafraid to contact me. They are not worried about that Boogeyman, the time meter. They know that they have an all-inclusive fee, and they have to right to understand what they are signing and committing to.

I do fully 85% of my business through referrals. Satisfied clients tell their friends and family that I was easy to work with. They will use me to prepare their estate plans, or set up an LLC or corporation for them. They have learned to trust me. I have become convinced that my fixed fee approach to residential transactions has been a great part of the reason i have been able to expand my practice.

Bridge as Life–Using Play of the Hand Techniques to Improve Your Negotiating

Customer Service, Marketing / Communication

My dad and mom taught me to play Bridge when I was a teenager. We had an instant game anytime we wanted with my older sister as the fourth. I play a lot of Bridge in college (probably too much, now that I think about it) and then have resumed playing as an adult with a regular group at my golf club. I have even played in a few duplicate tournaments from time to time.

Like all other card games, there is a certain element of luck involved in a Bridge game. Not so much in Tournament Bridge, but in the informal games that most of us play. That being said, I truly believe that there is also an important element of skill in the play of a Bridge hand. There are certain techniques that the declarer utilizes that demonstrate mastery of the game and almost always put the skillful player ahead of the others. It occurred to me that some of these techniques may be usable in real estate negotiations so I am chronicling them here.

•1.       The Endgame.  A clever declarer can make his or her contract if he puts the player to his left in a position where whatever he leads, the declarer wins. Picture the declare sitting South holding Ace-Jack of a suit, and his opponent sitting West holding King-Ten. If the declarer at the end of the game, can lose a trick to West when there are but two cards remaining, whatever of the two cards West leads (King or Ten), South will win both tricks. I would compare this situation to dealings with a stubborn seller, or listing agent. If you can get that person to be maneuvered into a situation where he or she is suggesting a solution to a problem, you have an advantage. You are never “bidding against yourself.” You always have a reference point to return to if things get heated. You remind the person what he or she once suggested. A lot of times, I like to embellish upon getting the other side into an “endgame” position by not responding in a telephone conversation after the person is finished. This makes the other side uncomfortable and starting to explain, and even modify, their position. That silence has helped me win many important advantages.

•2.       The Finesse. If you have Ace- Queen of a suit in your hand, and you think that the person sitting East sitting has the King, you can play a small card from the Dummy, and if East doesn’t play the King, the declarer plays the Queen from South and, in general, neutralizes the King so that it never wins a trick. This compares to a situation where you know that one of the parties to the transaction (maybe the husband or wife Seller) is very negative about the deal. You need to find a way to neutralize that person, by convincing the person you are dealing with directly (either listing agent or attorney) that this negative person can “kill this deal”. In effect you are using the old “finesse” technique to move the person to the sidelines where he or she cannot continue to be a problem.

•3.       The Squeeze. At the end of a bridge hand, a declarer with a bunch of winning cards can succeed by playing all of these winning cards to force the opponents to guess what to discard and what to hang on to. The result of the “squeeze” is to promote small cards into winners, if the opponents have not kept accurate track of the cards played. In real estate, the “squeeze” is available when we sense desperation on the other side. The skill involved here is to spend time to determine what your client or customer really wants, or needs, and then to make a longer list of demands, which eventually funnels into getting the important concessions your client really needs. You start out with a laundry list, and end  up with just the few essential items. The other side has been “squeezed” but gathers some comfort in the knowledge that they said “no” to a few requests.

If it sounds like I treat real estate negotiations as a game perhaps that is a correct observation. With the help of other real estate professionals on my team, I want to get the best possible result for my client. To me, that is what the game is all about.

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