Consumer Protection Law Flashcards
MGL Chapter 93A
- Massachusetts General Law Chapter 93A
- Consumer Protection Act
- Enacted in 1976, then amended in 1969 to allow for private right of action.
- Purpose: Protects consumers from unfair & deceptive business practices.
- MGL chapter 93A is the reason for a lot of real estate disclosure requirements.
Licensees are treated as what according to MGL chapter 93A?
Licensees are treated as business and are held to the same standards as any other business when it comes to consumer protection.
In reference to MGL 93A, what do consumers have the right to do?
They have the right to file a claim in court & collect monetary damages for a violation of MGL Chapter 93A
What could get someone into trouble when it comes to MGL chapter 93A?
- Puffing: Exaggerating information (could have some truth).
- Failing to disclose material defects (foundation issues, lead, etc.).
- Not upholding a refund/warranty.
- False Advertising: Blatant lying, misrepresentation.
What are the guidelines for filing a claim under MGL Chapter 93A?
- Matter must involve a business/licensee.
- One must have suffered monetary damages (or could have).
- Complaining party must write a 30 day demand letter.
What is in a 30 day command letter?
- Who: offending business/licensee.
- What: Offense alleged of.
- When: Time frame.
- How: Prove the unfair practice caused (or could cause) loss of money (hardship).
Does intent matter when it comes to MGL Chapter 93A violations?
No; Whether or not you meant to deceive someone doesn’t matter.
What are the penalties for MGL Chapter 93A violations?
- Minimum: Double damages.
- Maximum: Treble (fancy word for triple) damages, plus attorney fees.
What are the exceptions to the penalties of violating MGL Chapter 93A?
If a business makes a reasonable offer that is rejected by consumer; court may limit damages to settlement offer.
What is a home inspection?
Opportunity for the buyer to review any defects of a property w/ a licensed professional.
Are home inspections required?
- They are not required by law, but strongly suggested.
- Government backed loans may require, but that’s on the lender, not the law.
Who can recommend a home inspector?
- Only the exclusive buyer’s agent is allowed to.
- Listing agents can only provide the full state list approved inspectors (NACHI.org).
- Dual agents can only provide the NACHI.org list because seller representations supersedes.
What must buyers be given when the P&S is signed?
Buyers must be given a MA Home Inspector Brochure when the P&S is signed.
Environmental hazards include…
Mold, lead, radon, fuel tanks, etc.
Do hazardous materials prohibit the sale of real estate?
No, but they must be disclosed up front.
21E certificate
Certifies that a property is free from contamination.
Brownfields
Lands that have been previously used for commercial purposes & are contaminated.
Greenfields
Lands that have not been contaminated.
DEP
Massachusetts Department of Environmental Protection
-Provides liability relief & financial incentives to clean up contaminated sites under Brownfields Act of 1998.
Prior to what year was lead paint commonly used in homes?
1978
What are the dangers of lead paint?
-If ingested (inhaled or eaten), can cause brain, kidney, nerve, & blood damage.
-Children under age 6 are especially at risk.
Lead poisoning has been linked to behavior issues & learning disabilities as well.
-Pregnant women are also at risk.
Does the presence of lead pain always have to be disclosed?
Yes.
Both the sale and rental of real estate build prior to 1978 require what in terms of lead paint?
Lead Paint Disclosure Form
Different lead paint statutes
-Is there lead paint? Y/N/Unknown
-Has the property been tested? Y/N/Unknown
-If positive, when did they de-lead?
Must have either a letter of compliance or a de-lead certificate in hand.
Massachusetts Property Transfer Lead Paint Notification form (state) & Protect Your Family from Lead in your Home pamphlet (EPA)
- Required for prospective purchases of real estate build prior to 1978.
- Must sign before P&S.
- Buyer is given 10 day lead inspection provision by Federal law.
- May waive.
- This is NOT a lead contingency form.
If a pregnant person or a child under 6 years old lives in a home built prior to 1978, what must the homeowner do?
Homeowner must test for lead & de-lead or encapsulate within 90 days. No exceptions.
Massachusetts Tenant Lead Law Notification form
- Required for prospective tenants of real estate build prior to 1978.
- Must sign prior to or w/ lease.
If a prospective tenant/current tenant is pregnant or has a a child under 6 years old, what must the landlord do?
- Landlord must test & de-lead any positive areas.
- Landlord must pay for cost of de-leading + any costs of alternative housing for the tenant that is more than the cost of monthly rent.
- Tenants may not waive testing/de-leading.
- Landlord may not deny tenancy (no Fair Housing exemptions).
When is de-leading not required?
For short term housing.
-MA: <31 days
Federal: < 100 days
Asbestos
Used as an insulation material & fire retardant.
What are the dangers of asbestos?
Prolonged use leads to asbestos, mesothelioma & lung cancer.
When did the EPA ban the use of asbestos?
EPA banned the use of asbestos in 1989, then overturned ban in 1991.
- Use in homes was banned in 1978.
- Installers were permitted to use up their stock until 1989.
Where is asbestos most commonly found?
Mostly seen in “popcorn” ceilings or flocked ceilings, 9x9 tiles, & on heating pipes.
When does asbestos become dangerous?
- When it’s in poor repair or friable state (crumbling).
- Must be removed or encapsulated (if possible).
- Subject to 310 CMR 7.00
- Removal must be done by licensed professional.
- DEP & DLS must be notified 10 days prior to removal.
Radon
Colorless, odorless gas.
-Caused by natural breakdown of radioactive elements in the soil.
What are the dangers of radon?
Radioactive & causes cancer.
Homes in high risk areas must be what in terms of radon?
They must be tested.
- especially the 1st floor & finished basement.
- Levels of 4pCl/L+ must be mitigated.
How many homes are affected by radon?
1 in 15
How should you handle buyers in terms of radon?
Encourage your buyers to have a radon test, especially if they are in a high/moderate risk zone. Can google it.
Are radon contingencies a thing?
Radon contingencies are often built into the home inspection contingency, however you can always add additional radon contingency for your buyers.
Mold
Occurs due to damp environments w/ poor ventilation.
Where is mold commonly found?
In vinyl wallpaper, exterior insulation, finished systems, & HVAC ducts.
Stachybotrys
Genus of mold that contains 50 different species.
What is the most concerning type of mold?
S. Chartarum & S. Chlorochalonata = black mold
Black mold
Most toxic & linked to air quality indoors that can cause health issues.
Does home owners insurance cover mold?
Homeowners insurance often excludes mold.
Are mold disclosures required in rentals?
Yes.
-Failure to disclose mold by a landlord could cause a violation of state sanitary code & become grounds for constructive eviction.
UFFI
Urea-Formaldehyde
-Insulation material that when it breaks down causes formaldehyde vapor.
When was UFFI banned?
1979
Does UFFI have to be disclosed?
No, but it it best practice to disclose if you know about it.
How are lenders handled in terms of UFFI?
Under law passed in 2002, lenders reman liable, however it is so old that at this point it is not very toxic.
Chlordane
- Used to treat pest infestation in the 1940s-1980s.
- Acted as a chemical barrier or “electrical fence” between pests and the home.
What are the dangers of Chlordane?
- It is toxic.
- It impacts well water and air quality.
PCBs
Polychlorinated Biphenyls
->200 different chemical compounds that aren’t naturally found.
What are the dangers of PCBs?
They cause cancer.
Where are PCBs mostly found?
In commercial properties.
CFCs
Chlorofluorocarbons
-Non toxic, non-flammable chemicals.
What are CFCs used for?
Used as refrigerants in A/Cs, fridges, freezers, aerosol sprays, paints, etc.
What are the dangers of CFCs?
They cause ozone layer depletion.
USTs
Underground Storage Tanks
- Storage tanks used for chemicals or gas.
- More than 10% buried underground.
- Banned in MA under 21E.
- Disposal requires presence of fire dept. & DEP.
Title V
Requires septic system to pass inspection.
- Must obtain passing certificate.
- 2 yrs. prior to sale or…
- 3 yrs. prior to sale, if system was pumped each year or…
- 6 months after sale.
Who may perform a Title V septic system inspection?
- Certified engineers
- Health officers
- Board of Health
- Septic installers/haulers
- Registered sanitarians
If septic system fails inspection, who brings it into compliance?
Buyer & seller negotiate who will bring it into compliance.
Safe Water Drinking Act of 1974
- Permits EPA to set standard for drinking water.
- Drinking water issues must be disclosed.
- If your buyer is purchasing a property w/ well water or a non-municipal water system, recommend they have the water tested for contamination.
Which hazardous materials must be disclosed?
All known hazards.
MA smoke Detector Regulations
Sale of MA real estate built prior to 1975 requires the a Smoke Detector Certificate signed by a local fire chief.
-Most lenders will require this certificate too.
What are the smoke detector requirements for a 1-2 family home in MA?
- Real estate built prior to Jan 1, 1975, may have battery operated detectors.
- Real estate built or permitted 1975-1977 must have interconnected hardwired detectors.
- Real estate built or permitted after 1977 must have interconnected detectors w/ battery backup.
What are the MA smoke detector regulations for a multifamily home?
- Must have smoke detectors in units & common areas.
- Type of system depends on number of units.
As of December 2016, what must all battery operated smoke detectors be?
10 yr. + photoelectric sealed.
Carbon Monoxide Regulations
As of March 31, 206, MA homes must have carbon monoxide detectors if:
- The home has fuel-burning equipment that produces carbon monoxide.
- Indoor parking is adjacent to the living areas of the home.
- Law applies to all home, not just those for sale.
What do new construction homes & recent renovations need in terms of carbon monoxide detectors?
They must have hard wired detectors.
Older homes can have what in terms of carbon monoxide detectors?
Battery operated, plug-in detectors.
Combination smoke and carbon monoxide detectors must have what?
Tone & voice feature.
Construction warranty
States that all products used in construction were new & of “good quality”, the work is free from defects & has been produced according to the agreed upon contract.
-Builders sometimes give 1 year warranty, although it is not required
Implied Warranty of Habitability
- Massachusetts automatic 3 year warranty.
- Covers structural integrity or the property, systems, mechanics, anything that keeps the property habitable & out of the elements (roof/windows).
- judge will determine if there had been a breach of the warranty.
