Source: https://www.strangscott.com/author/cyoung/
Timestamp: 2019-04-20 08:22:20+00:00

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The Senate’s proposal, which was published in late May, adopts and expands upon Governor Baker’s initial proposal. Instead of only applying the room occupancy tax to private rooms that are rented out for more than five months per year, the Senate proposes imposing the tax on all “transient accommodations.” In contrast to Governor Baker’s proposal, which suggested encompassing long-term Airbnb providers under the definition of “hotels,” the Senate’s proposal introduces an entirely new category of housing that would be subjected to the room occupancy tax. “Transient accommodation” would encompass all “owner-occupied, tenant-occupied or non-owner occupied property . . . that is not a hotel, motel, lodging house or bed and breakfast establishment” where at least one room is rented to an occupant and all accommodations are reserved in advance. This new category of accommodation would expand the application of the room occupancy tax to all Airbnb-type services, regardless of their frequency. As a result of this proposed expansion, the state Senate’s proposal is projected to raise $18 million in 2018.
In a television ad Airbnb declared its support for the proposed rental tax in Massachusetts. Although similar ads ran last summer, the new ad reaffirms the company’s “commit[ment] to working with Massachusetts on new, common-sense home sharing rules. We want to collect and pay taxes for our hosts and protect affordable housing. Together, we can make sure all of Massachusetts benefits.” At this point it appears that at least some tax will be levied on companies like Airbnb in the very near future. The effect on hosts and customers remains unknown. Strang Scott will continue to follow the progress of the proposed tax.
This entry was posted in Business, News, Real Estate and tagged Air B'nB, Real Estate, Short Term Rental Tax, Short Term Rentals, transient accommodations on June 19, 2017 by Cole Young.
It often comes as a surprise to commercial tenants that they are responsible for repairing and maintaining most of the equipment in their commercial space. This can prove both frustrating and expensive when an outdated air conditioner breaks in the middle of summer. To avoid these frustrations, tenants should (1) review the specific requirements in the lease, with an eye on some of the below specific applications; and (2) have a professional evaluate the life and value of each piece of equipment the tenant is required to maintain.
When a lease requires a tenant to repair and maintain equipment, the commercial leasing lawyers typically haggle over what specific equipment is required to be maintained. The usual approach is to require the tenant to repair and maintain equipment that “exclusively serves” the rented space. Meaning, the landlord is required to maintain equipment that serves the entire building (e.g. the building plumbing) but the tenant is required to maintain equipment that only serves the space (e.g. plumbing located in the tenant’s bathroom). All buildings and all rental spaces are different, so it is imperative to negotiate, with as much detail as possible, what equipment truly “exclusively serves” the premises. Often, as is usually the case with air conditioning and HVAC, the line between a building system and a premises-specific system is blurred.
Air conditioning and HVAC units are some of the more contested elements in maintenance/repairs provisions of leases. These systems are critical because they can completely destroy a tenant’s ability to operate its business if they fail and they are often expensive. Moreover, these systems are often tied to other systems within the building and therefore it is difficult to pinpoint who should absorb the cost. As stated above, tenants should enlist a maintenance or engineering expert to determine (1) the life of the air conditioning and HVAC system; and (2) fully describe the interplay between the tenant’s systems and the building’s systems.
A grease trap, which is a plumbing apparatus used to collect cooking grease before it enters the wastewater system, is particularly important for restaurant commercial leases. In every restaurant lease I have negotiated, the tenant is responsible for cleaning and maintaining the grease traps. Leases typically state that tenants must “regularly” clean and maintain their traps, but sometimes a lease will provide for specific periodic cleanings (e.g. once a month) and even specify the contractor the restaurant owner must use. The above language is fairly standard, but one important piece that is often overlooked is the location of the actual grease trap. While ordinarily located within the restaurant, grease traps are sometimes located in separate areas, in other adjacent units, and even outside of the premises. As such, tenants and landlords alike should discuss and agree to how and when grease traps should be cleaned. Otherwise, tenants will have headaches in trying to access the very thing they agreed to clean, and landlords may have other tenants angry because the grease trap equipment is interfering with their business. I once had a client whose grease trap was located in the basement of an adjoining unit, which happened to be a merchandise showroom. Although my client cleaned the grease trap as required, they also inadvertently dragged grease throughout the showroom, much to the frustration of the other tenant.
The confusing crossover between all repair and maintenance issues is when repair and maintenance are covered as part of operating expenses. In larger buildings, tenants will have to pay, in addition to rent, a portion of the landlord’s operating expenses for the building. This portion often covers some of the building’s overall maintenance and repair costs. As such, even if something is not a direct tenant expense, the tenant may end up covering the cost (or a portion) through the payment of operating expenses. It is therefore imperative that tenants ensure their maintenance and repair obligations are consistent with what is covered under operating expenses.
The above is a simplified summary of different approaches to equipment maintenance for a commercial space. Each situation is different, and often different locations will have differing “standards” for how leases are structure. For example, in the Boston area, the standard provisions for commercial leases in Cambridge often differ from those in the City of Boston. In fact, the standards in different neighborhoods in Cambridge (e.g., Kendall Square) often deviate from other neighborhoods (e.g., Harvard Square). As such, it is critical that both landlords and tenants speak with a commercial real estate attorney before executing a commercial lease.
This entry was posted in Real Estate and tagged Boston commercial lease, boston commercial real estate, boston real estate attorney lawyer, boston restaurant lawyer attorney on April 28, 2017 by Cole Young.
Citgo and Related Beal have agreed to terms that will keep the Citgo sign in Kenmore Square “in place for decades to come.” Not surprisingly, Boston residents are elated about the news.
This entry was posted in News and tagged Boston Citgo sign, Kenmore Square, Kenmore Square Citgo sign on March 16, 2017 by Cole Young.
Companies operating or conducting business in Massachusetts are aware of an all-too-familiar statute, Massachusetts General Laws Chapter 93A. This statute provides individual consumers and businesses a right to bring legal action if they are harmed by an unfair business practice. The statute eloquently, although perhaps ambiguously, states that a violation shall exist when a company commits an “unfair or deceptive act or practice, or unfair method of competition,” against another who is engaged in commerce within the Commonwealth. Violations can cover a litany of topics, such as a company that unfairly demands more money to complete its contract obligations after having already executed the contract (Anthony’s Pier Four, Inc. v. HBC Associates, 411 Mass. 451), or where insurance providers fail to offer a fair and equitable settlement amount within the required time period (Rhodes v. AIG Domestic Claims, Inc., 461 Mass. 486), or against landlords who fail to provide habitable units to their residential tenants (Haddad v. Gonzalez, 410 Mass. 855). Although Chapter 93A is far-reaching, it does have its limitations.
The precedent of this case will be far-reaching and provides security to companies and businesses who choose to file suit, as opposed to being forced into settlement for fear of committing an “unfair” act. Because the breadth of Chapter 93A can be complicated and nuanced, potential litigants should speak with an experienced Massachusetts litigator.
This entry was posted in Construction, News and tagged 93A, 93A litigation tactics, Chapter 93A, Massachusetts construction, Massachusetts construction attorney, Massachusetts construction lawyer on February 26, 2017 by Cole Young.
Unlike Massachusetts residential leases, under which a landlord is required by law to mitigate its damages, commercial lease provisions are more flexible and often contain a so-called “acceleration clause.” An acceleration clause, in its most basic form, addresses whether a landlord may accelerate rent (i.e. demand all of the rent that is remaining due under the lease) if a tenant breaches the lease before the end of the term. Generally speaking, commercial leases deal with acceleration in one of three ways: (1) the lease is silent about acceleration; (2) the landlord can demand the full rent immediately upon the tenant’s default; or (3) the landlord can demand the full rent immediately upon the tenant’s default and demand that the tenant continues to pay the ongoing obligations under the lease. Practically speaking, it is very rare that a lease is completely silent. Thus, for purposes of this article, we will assume that the lease contains some form of an acceleration clause.
Savvy tenants typically try to limit the landlord’s ability to accelerate rent. Often, tenants will try to (1) negotiate longer cure periods (i.e. have a longer time period during which the tenant can remedy the default); (2) limit the landlord’s options to either (i) demanding full rent upon default or (ii) requiring the tenant to meet ongoing obligations; and/or (3) ask that the acceleration of rent is offset once the landlord secures a new tenant (i.e. the landlord must try to mitigate its damages). Assuming the landlord is willing to make some of these concessions, landlords will want their own limitations: (1) landlords are generally not going to allow a cure period beyond thirty days; (2) if the landlord elects to take a one-time payment in lieu of ongoing rent payments, the landlord may require more money for the security deposit and/or require a personal guarantee; and (3) the landlord may allow an offset (i.e. the landlord gives the tenant a “credit” once the landlord secures a new tenant), but that offset usually factors in the landlord’s costs in doing so, like broker commissions, attorney fees, etc.
In a seminal case on this topic, the Massachusetts Supreme Judicial Court (“SJC”) in Cummings Properties, LLC v. National Communications Corporation1 held that the acceleration clause at issue was a valid against the tenant. In that case, the landlord asserted that it was entitled to accelerated rent on the remainder of the lease (more than two years) for and thus the landlord was entitled to more than $500,000. Citing relevant cases from Massachusetts and other jurisdictions, the SJC agreed. Subsequently, other tenants have fought unsuccessfully to void such provisions, making the argument that acceleration clauses effectively allow landlords to “double-dip” if they then find a suitable replacement tenant. This argument was summarily dismissed in a recent federal court decision, Bridge Over Troubled Waters, Inc. v. Argo Tea, Inc.2, applying Massachusetts law. Like the SJC in Cummings Properties, the Court in Argo ruled that the acceleration clause was enforceable as liquidated damages.
The above is a general summary of acceleration clause approaches in commercial leases. Each situation is different, and often different locations will have differing “standards” for how leases are structure. For example, in the Boston area, the standard provisions for commercial leases in Cambridge often differ from those in the South Boston. In fact, the standards in different neighborhoods in Cambridge (e.g., Kendall Square) often deviate from other neighborhoods (e.g., Central Square). Moreover, acceleration clauses tend to vary depending upon whether the space is for a restaurant, laboratory, retail, office or warehouse). As such, it is critical that both landlords and tenants speak with a commercial real estate attorney before executing a commercial lease.
This entry was posted in Real Estate and tagged acceleration clause, commercial lease, laboratory lease, restaurant lease, retail lease on February 20, 2017 by Cole Young.
In Aggregate Industries – Northeast Region, Inc. v. Hugo Key & Sons, Inc., 90 Mass.App.Ct. 146 (2016), the Massachusetts Appeals Court ruled in favor of Strang Scott’s position, reversing part of the trial court’s earlier decision. The Massachusetts Supreme Judicial Court (“SJC”) recently declined to further review the case. As such, the Appeals Court’s decision is now clear precedent on the standard for attorney fees under the Massachusetts Payment Bond Statute, G.L. c. 149, § 29 (“Section 29”).
The case arose over materials and services that a subcontractor / material supplier provided to a general contractor for use on a public construction project in Salem, Massachusetts. The general contractor refused to pay in full, so the subcontractor brought suit against it and the payment bond surety. The trial court awarded damages to the subcontractor for the value of certain services provided but refused to include an award of attorneys’ fees. The trial court incorrectly held that Section 29, which provides for mandatory attorneys’ fees awards to prevailing subcontractors and material suppliers, was inapplicable.
On appeal, the plaintiff argued, through counsel (Cole Young and Jennifer Lynn, at Strang Scott), that Section 29 is a remedial statute with a clear purpose of protecting unpaid subcontractors and material suppliers on state-owned projects. Said another way, an attorneys’ fee award is mandatory for prevailing claimants and is not within the court’s discretion. The statutory purpose is clearly to level the playing field where general contractors could otherwise hold back payment to deserving subcontractors and material suppliers, using litigation costs as leverage to deter them from filing suit. Now they have greater incentive to make those payments when they become due, or face greater consequences.
The precedent of this case will be far-reaching and will benefit Massachusetts suppliers and subcontractors for years to come. To learn more about securing payment on construction projects, contact an experienced Massachusetts construction attorney.
This entry was posted in Construction, News and tagged Attorney fees, Massachusetts Appeals Court, Massachusetts contractors, Massachusetts public construction, Massachusetts subcontractors, SJC on January 18, 2017 by Cole Young.
I will concede that discussing indemnification provisions in commercial leases is not the most riveting topic. However, this is a critical issue for landlords and tenants alike. Nearly every commercial lease I have reviewed, from small transactions (e.g. a boutique Boston restaurant) to larger, complex transactions (e.g. a state-of-the-art laboratory facility in Cambridge), has a provision discussing how and when a tenant or landlord must indemnify the other party. In layman’s terms, “indemnification” simply means that one party promises to pay the cost for possible future damages or claims. We discussed indemnification in the context of construction subcontracts and construction management contracts in our previous articles.
In the commercial leasing context, leases often state that the tenant will indemnify the landlord for any claims, injuries or damages that occur on the leased property. They will often go further and require that the tenant indemnify the landlord even for the landlord’s own actions, inactions or negligence. While these provisions seemingly offer landlords protection, landlords should proceed with caution: some of these provisions are completely unenforceable in Massachusetts.
Any provision of a lease or other rental agreement relating to real property whereby a lessee or tenant enters into a covenant, agreement or contract, by the use of any words whatsoever, the effect of which is to indemnify the lessor or landlord or hold the lessor or landlord harmless, or preclude or exonerate the lessor or landlord from any or all liability to the lessee or tenant, or to any other person, for any injury, loss, damage or liability arising from any omission, fault, negligence or other misconduct of the lessor or landlord on or about the leased or rented premises or on or about any elevators, stairways, hallways or other appurtenance used in connection therewith, shall be deemed to be against public policy and void.
Both Massachusetts and Federal Courts have held that the above statute applies equally to residential leases and commercial leases. The statute does not, however, preclude a landlord from requiring a tenant to obtain insurance protecting against the landlord’s own negligence. So what does this mean? In short, it means that commercial landlords cannot force tenants to indemnify or hold landlords harmless from the landlords’ wrongful actions. It does not prevent, however, landlords from requiring tenants to carry insurance to protect from such liability. As an example, imagine that a customer walking into a restaurant trips and falls in an entranceway. If the lease has language stating that the tenant has to indemnify the landlord from any injuries on the property, including those caused by the landlord, then the tenant would have to cover the customer’s injuries. Under Massachusetts law, however, such provisions are unenforceable and so the landlord may not escape liability (say, for example, the customer tripped because the landlord failed to fix the doorway). To protect against this liability, the landlord can obtain its own insurance and/or require the tenant to obtain insurance protecting the landlord.
The above is meant only as a brief summary. If you are a commercial tenant or landlord and have questions about your lease, you should contact a commercial real estate lawyer.
This entry was posted in Real Estate and tagged Boston commercial lease, Cambridge commercial lease, Massachusetts commercial lease on October 21, 2016 by Cole Young.

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