Homestead Exemption: Court Adopts Predominance Test for Home Offices

Joshua Lee Smith – The Massachusetts homestead statute (M.G.L. c. 188) permits an owner to declare a homestead on his or her principal residence to protect it against claims of certain unsecured creditors of up to $500,000, or if an owner is disabled or 62 years of age or older, up to $1,000,000. Without declaring a homestead, homeowners are entitled to an “automatic homestead exemption” of $125,000. The U.S. Bankruptcy Court for the District of Massachusetts recently held in In re: Walter D. Catton, Jr. that a property that is predominantly used for commercial rather than residential purposes will disqualify such property for exemption under the homestead statute.

The debtor in the case owned a two-story structure in which he lived on the second floor and used the first floor as an office for his insurance agency. The opposing party, a bankruptcy trustee, argued that, due to its commercial use, the debtor’s property should not qualify as a single family dwelling entitled to homestead protection. The trustee pointed to the city’s assessor website which described the property as an “office” having a style of “Stores/Apt Com” and noted that the city taxed part of the property at the residential rate and part at the commercial rate. The trustee also pointed out that the debtor’s appraisal described the property as a “two unit mixed use property.” The Court was unpersuaded by these arguments, stating that the test for homestead eligibility is not whether the single family dwelling includes any commercial use but whether the commercial use predominates.

In holding that the debtor’s use of the property for his insurance agency was not the predominant use, the Court indicated that the zoning district in which the property was located permitted a home occupation with commercial use only if the commercial use was “clearly incidental and secondary to the use of the premises for residential purposes.” The Court also found persuasive the fact that over 60% of the floor area represented residential living area.

The good news for homeowners (and bad news for creditors) is that this case further demonstrates how the courts in Massachusetts continue to follow what the Court here described as the “golden rule” that exemptions are to be liberally construed in favor of debtors. Homeowners should consider taking the simple step of filing a declaration of homestead as a means to maximize the protection of one’s principal residence. Creditors should be mindful of the homestead protections afforded to debtors in the collection of judgments and the few but important exceptions where debtor-friendly homestead laws do not apply.

Adverse Possession – What Has Your Neighbor Been Up To?

Joshua Lee Smith – In Massachusetts, a party claiming title to land through adverse possession must establish actual, open, exclusive and non-permissive use of such land for a continuous period of at least 20 years. The Massachusetts Appeals Court recently held in 1148 Davol Street LLC v. Mechanic’s Mill One, that a cause of action for adverse possession against a private party can begin during prior ownership of the land by The Commonwealth of Massachusetts or a city or town.

The city of Fall River was the record owner of a certain parcel of land (the “Mechanic’s Mill Property”) from 1975 until 1989, when the city sold the Mechanic’s Mill Property to a private party. The Mechanic’s Mill Property was subsequently sold to the named defendant. In 1975, the owners of property adjacent to the Mechanic’s Mill Property (the “Adjacent Property”) began to use an approximately 25,000 square foot strip of land on the Mechanic’s Mill Property along the boundary of the two properties. The Adjacent Property was sold to the named plaintiff in 2007, and in 2008, the plaintiff brought suit against the defendant over the ownership of the strip.

The parties agreed that the plaintiff satisfied the elements of an adverse possession claim for a continuous 32-year period from 1975 to 2007. Therefore, the sole issue before the Court was whether the plaintiff could count the time during which title to the Mechanic’s Mill Property was held by the city toward the requisite 20-year period of adverse use.

The Court recognized that under the common law, a party claiming adverse possession could not count the time title to the land was held by the Commonwealth or a city or town towards the applicable limitations period as adverse possession cannot be claimed against a governmental entity as to public land. However, Massachusetts has explicitly departed from the common law rule by adopting M.G.L. c 260, § 31 (“Section 31”). Section 31 provides a 20-year statute of limitations period for actions for the recovery of land commenced by or on behalf of the Commonwealth. The defendant argued that the exceptions to the statute of limitations for land held for conservation, open space, parks, recreation, water protection, wildlife protection or other public purpose that were added to Section 31 by amendments indicate an intent by the Legislature that land put to a public purpose could never be subject to adverse possession, and on this basis the limitations period cannot run while the property is held by a public party, which, in this case, would mean that the adverse possession “clock” would not have started until the city transferred the Mechanic’s Mill Property to a private party in 1989.

The Court disagreed, holding that a private record owner of once-public land opposing an adverse possession claim may not invoke Section 31 as a defense. The Court reasoned that while the amendment to Section 31 “undeniably added broad protections allowing the Commonwealth and its subdivisions to recover land held for public purposes, nothing in the statute evinces an intent that such protections also benefit a subsequent private owner.” Moreover, the public policy reasons for adding the broad public purpose language to Section 31 are indicative of an intent to protect land that benefits the general public, and allowing a private party to “take advantage of a law clearly designed to benefit the [Commonwealth] would be inapposite to the purpose of that law.”

Owners and purchasers of real property should always carefully review claims and potential claims of adverse possession. This decision makes clear that any such claims cannot be defended on the basis that the property was once owned by a public entity. In general, property owners interested in avoiding claims of adverse possession should consider registering the property with the Land Court, erecting no trespassing signs or a fence or posting a Notice to Prevent Acquisition of Easement pursuant to M.G.L. c. 187, §§ 3 and 4 (with respect to prescriptive easements). Doing nothing and relying on the love of thy neighbor won’t help to protect your land.

BVCC Sustainable Business Award Winner – Boston Bumper Supply, Inc.

Boston Bumper Supply won the Sustainable Business Award at the BVCC 35th Annual Meeting. Why?
Tim Lewis wins the BVCC Sustainable Business award at 35th Annual BVCC meeting.

Tim Lewis wins the BVCC Sustainable Business award at 35th Annual BVCC meeting.

We know of no other business owner who has built a company based on one hundred percent recycling, outgrew his facilities twice in four years, and saved the community two and a half acres of landfill space in the process. Today Boston Bumper is the largest independent bumper recycler in all of New England – serving wholesale distributors and body shops stretching from Maine to Maryland.

Boston Bumper’s 100 percent recycling program goes full circle and benefits the community all along the way. Damaged bumpers, collected from local body shops, are saved from landfill disposal. 30 percent are deemed repairable and placed into inventory — with customers realizing a 50 percent savings over the cost of a new bumper. The remainder are donated to the Blackstone Valley Recycling Center where they are sold for scrap to be reprocessed into other commodities; monies earned from this endeavor are given back to the community.
At last count of record, (2009-2011) the company had recycled more than 44,000 bumpers. But, it doesn’t stop there. As an auto body school graduate with 20 years in the industry, Tim also donates his time, materials, and expertise to teach advanced repair technologies at vocational schools throughout the state.

Boston Bumper Supply reconditions factory bumper covers. With skilled technicians using tried and tested procedures the end result is a quality bumper cover that is ready to be painted. They use only the highest quality products available to repair their bumpers . Their experienced professionals can quickly identify and price bumper covers using bumper identification software.

Boston Bumper Supply has thousands of bumper covers in their inventory with new bumper covers coming in every day. At Boston Bumper Supply you can view which bumper covers they have in stock. The website inventory is updated daily and they offer free daily shipping within the Boston, Metro West and Providence R.I. areas. Shipping arrangements are also available for anywhere within the U.S. thru one of their distributors.

We congratulate Tim Lewis for this wonderful achievement and his contribution to the community.

Entrepreneur of the Year – Brett Niver of Irrigation Automation Systems

Brett Niver

Brett Niver,owner of Irrigation Automation Systems, accepts the award of Entrepreneur of the Year at the 2013 Blackstone Valley Chamber of Commerce Breakfast.

From cranberry bogs to vineyards to citrus groves throughout the US and Canada, Irrigation Automation Systems (IAS) customers have a lot to be thankful for
this year.

These small-to-medium growers of agricultural cash crops operate on razor-thin margins based on achieving maximum crop yield per acre. The difference between success or failure often hinges on their ability to respond quickly to the forces of nature.

Brett shares, ” After our customer workshop yesterday where we helped educated cranberry growers on new diesel engine technologies and requirements, Jim reminded me that our technology actually cuts emissions and protects air-quality by reducing the total amount of fuel used for irrigation.  We’re working to improve our world one grower at a time.”

Brett Niver, an Ohio native with a background in industrial automation, purchased IAS on April 15, 2011. Brett wanted to focus his software development expertise on agrarian challenges and IAS had the beginnings of the products and services infrastructure he needed to move forward. Today, the Company leads the industry in technology innovation and “first of a kind” automation systems for agriculture. Its Early Warning and Monitoring System collects data in real time and provides growers with status alerts on soil and weather conditions. Remote pump control systems direct the release of water and fertilizer when and where they are needed.

But IAS is not just about product innovation and growth. Their concerns for the community they live and work in run equally as deep. Last year, they donated systems to Community Harvest in Grafton where they were used to produce tons of fresh fruits and vegetables for the Worcester County Food Bank.

The Blackstone Valley Chamber of Commerce congratulates Brett Niver for exhibiting true ‘Valley’ entrepreneurial skills and success!

Insurance Considerations for a Hobby versus Business – Guest Post from Gaudette Insurance

It’s safe to say that many people have a hobby. For some hobbyists, it’s something to do for interest and enjoyment during free time. While for others, it is something to do for financial reward. If the second one is you, and you’re interested in turning your hobby into a small business, then there are a few things about insurance you’ll want to know.

Do you have a Hobby or a Business?


A hobby is defined as something you enjoy spending your free time doing, but generally don’t get paid to do. A business, on the other hand, is something you do with the intention of making a profit.

The majority of states allow you to make a certain amount of money per year before your hobby becomes a business. If you suspect your hobby has become or is becoming a business then you’ll want to make sure you’re in compliance with the law. To do so, contact your attorney or local Small Business Administration (SBA) office, to help you navigate business law.

Should you insure your hobby, even if it’s not a business?

While you should definitely consider having insurance for a business, it’s not necessary to have insurance for your hobby. But here are a few reasons to consider insuring your hobby.

Let’s say Amanda is known throughout her town as an excellent cake baker and often is asked to make cakes and other similar treats for special celebrations.  What if someone picking up a cake slips on flour in her kitchen and breaks a leg? Will homeowner’s coverage apply?  It might not but a general liability policy could help cover this risk.

Check out another example. Read the rest of this blog post from Gaudette Insurance, here.