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Partner Spotlight from Dalton & Finegold

“Get Ahead of It!”
Article by Dr. Brian Ramsey
Featured in Real Producers Magazine

To say that Christina Petrucci, Esq. of Dalton & Finegold is a driven, persevering, and constantly moving attorney may be slightly understated, but it is her caring and giving spirit that creates her balance. She describes the work in her chosen field as “happy law.”

When she made the pivot to law school from her undergraduate studies, she knew she wanted to work in law that helped people create wealth and something that enriched their lives – opening new chapters in their journeys. She could have succeeded in any endeavor in law, but she has always loved the fact that she joins people who are striving to obtain that next home for making memories.

Christina entered Merrimack College ready to study Sport’s Medicine, and she was excited to play rugby – even serving as the Captain of the team her junior and senior years. The last semester of her junior year, Petrucci switched her major to Political Science and finished with a Bachelor’s Degree (Business Minor). She applied to law school, almost on a whim, and was accepted. Christina’s father, a small business owner, owned multiple properties too, and she was fascinated with the facets of law that were needed to secure property. This spawned an interest and led to her future upward trajectory in an industry that provides her with an opportunity to impact other lawyers, clients and real estate agents alike.

“When things go wrong, as they sometimes will, When the road you’re trudging seems all uphill, When the funds are low and debts are high, And you want to smile, but you have to sigh,
When care is pressing you down a bit, Rest, if you must, but don’t you quit …” (excerpt from a poem entitled “Don’t Quit” by Edgar Albert Guest)

 

Hoping to gain experience in a law firm while attending law school, Christina googled local law firms and was most impressed with the website of Dalton & Finegold. “I saw how committed to property law they were, and they appeared to be a technologically forward firm,” notes Petrucci. She began her work there as a Legal Assistant in the commercial side and after passing the bar, she also had the opportunity to move into residential work. Christina has propelled herself from an Associate to Senior Associate and now to Partner.

For Christina, success is really about becoming a well-respected resource for other business partners and about being known as someone who is quite responsive to being a solution for problems. She loves solving problems in general and is very adept with solutions in property law / real estate. As referring partners, loan officers and real estate agents began referring to her as a respected resource, it only motivated Christina even more to keep learning, growing and honing the skills in her professional tool belt.

Petrucci now leads a team of seven people whom she mentors in law and sales. She has always had a knack for quietly observing everyone and all situations to learn how to improve her skillset. She has forged a habit of asking people who have been in her situation what advice they have and what pointers they would share. Whether they were Rugby Captains, women in leadership or other title leaders, Christina has made a practice of building on the foundation of others and trying to improve her industry by taking it to the next level. The pandemic forced her and others to re-evaluate the many processes of closings, and what has emerged is a new method of doing business that creates a seamless and pleasant experience for clients and agents alike.

Once a month, Christina teaches a continuing education class for agents, and she loves giving them the information they need along with an attorney’s perspective. She is proud of Dalton & Finegold’s reputation for responsiveness and their commitment to their mantra of being “deal makers not deal breakers.” She explains, “we have the best resources, through our many other teams such as our commercial, litigation and estate planning departments who can help with a sundry of issues that affect real estate. Petrucci also boasts of a state-of-the-art closing software system that enhances the process of closing for all.

In addition to the spirit of never quitting, Christina adds a mentality of always “getting ahead of it.” She mentors others in learning to be proactive and not reactive, and she teaches them to set a high benchmark of completion and performance. Petrucci is tenacious, but she always wants to “look at the flipside and see things from the clients’ perspective, taking time to walk in their shoes.” Clients and agents appreciate her balance, and they know that aggressively getting the job done comes along with a care and concern for the clients’ best interests.

Christina is very close to her family, and she enjoys golfing, hiking, boating, fishing and anything having to do with the ocean or mountains. If she could take a trip anywhere in the world, she would go to Australia, and if she could choose any other job and be successful, she would be the leader of an overnight summer camp – equipped with all the amenities, exposure to a great setting in nature, sports and great technology. Her work with summer camps was life-changing, and she would love to provide that for others. Petrucci loves to give to others, but she rarely lets them know, preferring to deal with things on the “down-low.”

It seems unreal that in some sense, Christina Petrucci is just getting started in her insatiable desire to impact others and positively change her industry. She hopes that her legacy is defined by her efforts to make the legal process accessible, understandable and ever-evolving into the next chapter. She will make it happen, because she will get ahead of it for sure!

View the article Real Producers magazine. Learn more about Christina Petrucci.

Appeals Court Allows Broker’s Claim Against Former Clients

Winchester Couple Switched Agents, Prompting Lawsuit
By Christopher R. Vaccaro
Special to Banker & Tradesman

A Winchester couple learned last June in Huang v. RE/MAX Leading Edge, that a real estate broker can enforce an unwritten exclusive brokerage contract against them, even if the broker did not produce a closing.

Biping Huang claimed that, in 2016, Xinhang Sun and Jing Ma entered a verbal contract to hire her as their exclusive buyer’s agent for one year. In return, Huang promised to use reasonable efforts to find them a new home. She also claimed that Sun and Ma verbally agreed to list their existing Winchester home with her, after they bought a new home.

The state Appeals Court ruled in favor of a real estate broker who sued for breach of contract after a client switched agents.

Huang showed Sun and Ma several homes, advised them on valuation and financing, and offered them a bridge loan to facilitate a purchase. However, in 2017, Sun and Ma contracted to buy a home in Winchester through RE/MAX Leading Edge. They advised Huang that they had hired a RE/MAX broker to buy a house, and offered Huang a gift card to express their gratitude. Sun and Ma bought a new home for $999,000 and sold their former home for $502,000, both within the one-year exclusivity period. RE/MAX received commissions on the two deals.

Who Promised What?

Huang sued Sun and Ma for breach of contract, and RE/MAX for tortious interference and unfair and deceptive business practices. The Superior Court dismissed Huang’s claims against RE/MAX, and allowed Sun and Ma’s motion for summary judgment dismissing Huang’s claims against them. Huang appealed.

The Appeals Court first considered Huang’s breach of contract claim against Sun and Ma regarding the purchase of their new home. The court discussed the Massachusetts statute of frauds, which renders contracts with loan and business brokers unenforceable unless they are in writing. However, the statute specifically exempts real estate broker contracts from that rule. Therefore, Huang’s lack of a written agreement did not prevent her from suing Sun and Ma for breach of contract.

The court next compared “unilateral” contracts, where only one party makes a promise, with “bilateral” contracts, where both parties exchange promises. According to the court, unilateral contracts are generally terminable at will. In contrast, neither party can terminate a bilateral contract without the other party’s assent. The court recognized that Huang allegedly promised to use reasonable efforts to find a home for Sun and Ma, and Sun and Ma allegedly promised to work exclusively with Huang. The parties’ promises to each other established a bilateral contract, which Sun and Ma could not terminate at will.

The court then discussed whether Huang could sue Sun and Ma even though she did not procure a home sale for them. The court cited Tristram’s Landing, Inc. v. Wait, a landmark 1975 case, for the general rule that brokers only earn commissions if they produce “ready, willing and able” parties who enter binding contracts that ultimately close. This principle applies whether brokers contract with sellers or buyers. The court distinguished Huang’s case from Tristram’s Landing, noting that Huang claimed a commission as damages because Sun and Ma breached an exclusive brokerage contract, not because Huang had procured a seller. The court realized that a ruling against Huang, under these circumstances, would mean that brokers could not claim commissions as damages when their clients breach exclusive contracts.

Court Vacates Judgment on Home Purchase

The court vacated the Superior Court’s judgment regarding Sun and Ma’s home purchase, and remanded that part of Huang’s case to the superior court for further proceedings. The court cautioned, however, that Huang still had the burden of proving her unwritten contract at trial.

The Appeals Court had less sympathy for Huang’s claim regarding the unwritten listing agreement to sell Sun and Ma’s home, and her claims against RE/MAX. The court observed that Huang did not promise to make any efforts to sell Sun and Ma’s home under the unwritten listing agreement. Therefore, Sun and Ma could terminate the listing agreement with Huang at any time until Huang produced a buyer, which never happened. As to RE/MAX, the court noted that Huang’s complaint made no allegations that RE/MAX acted improperly. Huang did not even allege that RE/MAX knew of any exclusive contracts involving Huang. The court upheld the dismissals of Huang’s listing agreement claim and her claims against RE/MAX.

Huang’s case offers some lessons. First, real estate brokers should require their clients to sign written brokerage contracts stating the parties’ expectations. Second, buyers and sellers should not seek and obtain services from brokers without written brokerage contracts. Third, brokers should ask clients for written disclosures, with indemnities, as to prior relationships with other brokers.

Download the article as seen in Banker & Tradesman on August 29, 2022. Learn more about Christopher R. Vaccaro.

Summer Interns Class of 2022

 

Thank you to our talented Summer Interns Class of 2022. Interns are an important part of the Dalton & Finegold team, bringing fresh ideas and a desire to excel. They work closely with our Residential Real Estate, Commercial Real Estate, Trusts & Estates, and Litigation departments, developing their skills. We wish them the best as they head back to school!

Pictured from left to right:
Olivia Cafarelli – Sophomore, majoring in Communications at Endicott College
Evelyn Rodriguez-Galvis – Senior, concentration in Finance at University of Massachusetts Amherst, Isenberg School of Management
Ken Doherty – 3L at Suffolk Law School
Nicole Dunn – 1L at Suffolk Law School
John Loreti – 3L at Suffolk Law School
Erin Donahue – 3L at New England Law
Andrew Dunklin – 3L at New England Law
Also pictured here is Barry Finegold, Managing Partner (center)

Summer Interns not pictured:
Julia Auger – Senior, majoring in Accounting at Merrimack College
Katie Bazarian – Freshman
Molly Codeanne – 2L at Suffolk Law School 
Kaitlyn Wrisley – Sophomore, majoring in Corporate Finance and Investments at Merrimack College

Minority-Owned Development Firm Makes a Difference in Worcester

Tax Incentives Play Major Role in Financing Project
By Christopher R. Vaccaro
Special to Banker & Tradesman

“. . . those who a good deed offer shall reap three times over the good deed that they offer”

Ifeanyi Menkiti published this verse in 2007 as part of his poem “They will Rise.” At the time, the Nigerian immigrant, poet, philosopher, and Wellesley College professor probably was not thinking about commercial real estate investment.

However, his verse became prophetic for a real estate project that began with his 2015 purchase of a vacant historic building at 6-8 Chatham St. in Worcester. Dr. Menkiti passed away in 2019 and did not live to see the completion of the project, but his dream of redeveloping that property reaped three significant tax benefits for The Menkiti Group, his son Bo’s real estate development firm.

Members of the Worcester Red Sox leased several units in The Mekiti Group’s 24-unit Chatham Lofts luxury property in Worcester.

The Menkiti Group completed the Chatham Lofts project and opened it for leasing last December. The project contains 24 luxury rental units with a fitness center, community room, and parking. It leased-up quickly, with several units occupied by members of the Worcester Red Sox minor league baseball club.

HDIP, Historic Credits and More

The Menkiti Group utilized three tax incentives in creating Chatham Lofts. The first was obtained through the Massachusetts Housing Development Incentive Program (HDIP), which is available in “Gateway Cities,” such as Worcester, that have 35,000 to 250,000 residents and median household incomes and college graduation rates below the state average.

Chatham Lofts is within an “HD zone” approved under the HDIP by the Massachusetts Department of Housing and Community Development (DHCD) for multi-unit, market-rate housing. As a result, The Menkiti Group secured a 10-year exemption of 60 percent of the increased value from its rehabilitation of the property. In addition to reduced real estate taxes, projects certified by DHCD qualify for state income tax credits of up to 25 percent of construction costs.

Federal and state historic tax credits were the second tax incentive that made Chatham Lofts possible. The Menkiti Group employed sensitive restoration processes so that the National Park Service and Massachusetts Historical Commission listed the property on the National Register of Historic Places. As a result, many project costs were “qualified rehabilitation expenditures,” for which The Menkiti Group earned a federal tax credit of $1.6 million and state tax credits of $1.35 million.

The third tax incentive came from the federal Tax Cuts and Jobs Act of 2017, which established “opportunity zones” with reduced federal capital gains taxes. Chatham Lofts is within one of the 138 designated opportunity zones in Massachusetts.Opportunity zone tax benefits are complicated, but if properly utilized, investors can enjoy deferred capital gains taxes, a 10 percent step-up in basis if the investor holds the investment for at least five years before December 21, 2026, and a 100-percent step up in basis if the investor holds the investment for at least 10 years (but not beyond 2047).

A Potential Triple-Play in Tax Deferrals

Consider a hypothetical taxpayer who sold investment property in 2020, realizing a $1 million capital gain, and then within 180 days reinvested the $1 million into a “Qualified Opportunity Fund” (QOF) developing investment property in an opportunity zone. By reinvesting in the QOF, the taxpayer can defer paying federal taxes on the gain until the sale of the QOF investment, or Dec. 31, 2026, whichever occurs first.

Also, because the QOF investment was made before 2022, if the taxpayer holds the investment for at least five years, the taxpayer enjoys a 10 percent step-up in basis. Finally, if the taxpayer holds the QOF investment for at least 10 years (but not beyond 2047), the taxpayer pays no federal capital gains tax on the appreciation of the investment beyond the deferred capital gain!

The opportunity zone program has sunset provisions. The 10-percent step up in basis is unavailable for QOF investments made after 2021, and no tax benefits are available for reinvested capital gains realized after 2026. However, the Chatham Lofts development was completed in 2021, so it can enjoy all of the tax advantages of opportunity zone investments described above.

Bo Menkiti sums up his firm’s mission best: “We believe every neighborhood has something that makes it great, and that core belief has been clearly illuminated through our experience in Worcester. We approach every neighborhood with the goal of highlighting existing assets and shining a light on the potential within, and financing tools such as historic tax credits, DHCD’s HDIP, and the Opportunity Zone program allow us to do so. These tax incentives are necessary to make these impactful projects possible. My father saw the great potential that exists in Worcester, and we are honored to continue his legacy, one that serves as a guiding light for our purpose and mission in the city today.”

Download the article as seen in Banker & Tradesman on June 27, 2022. Learn more about Christopher R. Vaccaro.

Neighbors Contest Relocation of Vineyard Hotel’s Pool Bar

Lack of Notification Used as Basis for Appeal
By Christopher R. Vaccaro
Special to Banker & Tradesman

An Edgartown hotel’s relocation of its outdoor pool bar is stirring up a hornet’s nest of litigation on Martha’s Vineyard.

The Harbor View Hotel has served vacationers since 1891. Under zoning law, the hotel is a legal nonconforming commercial use in a residential district. The Edgartown Zoning Board of Appeals originally granted the hotel a special permit to serve food and beverages at an outdoor pool bar in 1992.

Years later, the hotel applied for a special permit to relocate the pool bar. The hotel received this special permit in May 2019 and started work in June, after expiration of the 20-day appeal period for special permits and zoning variances.

Neighbors Fight on Two Fronts

Upon becoming aware of the work in progress, the hotel’s neighbors filed two lawsuits against the hotel and the ZBA in Dukes County Superior Court to annul the special permit. The neighbors claimed that they were not notified of the ZBA hearing.

Harbor View Hotel
A recent Appeals Court decision upheld a challenge to relocation of the Harbor View Hotel’s pool bar on Martha’s Vineyard.

The Massachusetts Zoning Act allows “persons aggrieved” – persons likely to suffer harm because of a zoning decision – to appeal the decision on the merits within 20 days after the decision is filed with the municipal clerk. It also gives abutters a 90-day appeal period if the municipality fails to properly notify them of the zoning hearing. The hotel’s neighbors filed their lawsuits within the 90-day period.

The ZBA and the hotel sought dismissal of both lawsuits, relying on the zoning administrator’s sworn statement that she mailed notices of the ZBA hearing to the neighbors. The neighbors produced their own sworn statements that they never received the notices. The Superior Court judge accepted the zoning administrator’s statement, discredited the neighbors’ statements, and dismissed the lawsuits in November 2019.

Meanwhile, the neighbors requested that the Edgartown building inspector shut down the new pool bar, claiming that it was outside the pool area and not authorized to serve food and beverages. The building inspector denied their request and the ZBA upheld that denial, whereupon the neighbors filed a third lawsuit. The Superior Court dismissed that lawsuit in April 2020, concluding that it was an improper effort to appeal the court’s dismissal of the prior lawsuits.

The neighbors appealed the Superior Court’s decisions, and applied more pressure on the hotel. Because of construction delays caused by a fire and the COVID pandemic, the hotel applied to the ZBA for a modification of a different special permit, involving the hotel’s guest rooms, ballroom and spa. The ZBA referred that application to the Martha’s Vineyard Commission (MVC), a regional planning commission. The MVC voted to hold a public hearing on the hotel’s application.

Dispute Moves to Regional Commission

The MVC opened the public hearing in January 2021. The neighbors contested the hotel’s application, citing potential negative impacts from noise, traffic, parking and other matters. Months later, the MVC approved the hotel’s application, but imposed several conditions, including requirements that the hotel seek MVC approval of any increases to hotel sleeping accommodations and outdoor seating, establish a “long-term neighborhood preservation committee,” and make affordable housing mitigation payments totaling $535,080. The hotel appealed the MVC’s conditions to the Superior Court, where the case is still pending.

Last November, in Allegaert v. Harbor View Hotel Owner LLC, the Appeals Court issued its decision on the neighbors’ appeal of the special permit for the pool bar and the building inspector’s denial of their enforcement request. The appeals court noted that the Zoning Act only requires that notices of hearings be mailed to abutters, not that abutters actually receive the notices. However, in this case, 11 neighbors alleged that they had not received notices, providing an adequate basis to infer that notices were not mailed. The Appeals Court ruled that the Superior Court’s dismissal of the challenge to the special permit was unwarranted.

The Appeals Court next considered the building inspector’s denial of the neighbors’ enforcement request. The Appeals Court ruled that the special permit allowed the service of food and beverages from the new pool bar, but it did not allow service in a nearby patio area. Accordingly, it vacated the Superior Court judgment to the extent that it dismissed the neighbors’ challenge to service in the patio area.

The Appeals Court’s decision allows the neighbors to continue their lawsuits in Superior Court over the relocated pool bar. The takeaway from that decision is that parties seeking zoning relief should make sure that notices of hearings are properly given, lest abutters take advantage of extended appeal periods to contest the zoning relief.

Download the article as seen in Banker & Tradesman on May 30, 2022. Learn more about Christopher R. Vaccaro.

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