Category Archives: News

UPDATE: Airbnb Hosts Beware: Boston Proposes Regulations on Short Term Rentals

By on April 16, 2018

Airbnb Hosts Beware, as the Massachusetts Legislature is now considering a bill to tax Airbnb and the short term rental industry.

Recently, the Massachusetts House of Representatives passed a bill (H 4327) that places a tax on short-term rental units as well as establishes a state registry of short-term rentals. The short-term rental tax established by the bill is imposed via a tired system depending on the amount of units any one host rents/owns. More specifically, and based on the short-term rental rent:
• Hosts that rent two or fewer units (“Residential Hosts”) are subject to a 4% tax;
• Hosts that rent three to five units (“Investor Hosts”) are subject to a 5.7% tax on the short-term rental rent; and,
• Hosts that rent more than six units (“Professionally Managed Hosts”) are subject to an 8% tax on the short-term rental rent.
The bill also allows city and towns to impose an additional tax on the same short-term rentals, however, such tax is limited to:
• 5% on Residential Hosts;
• 6% on Investor Hosts; and,
• 10% on Professionally Managed Hosts.

While the House bill still has a ways to go before becoming law, Massachusetts Governor Charlie Baker has indicated that he would like to sign a short-term rental bill this legislative session.
Boston residents who participate in the short-term-rental economy are well advised to understand, and keep an eye on, proposed changes in housing law as regulations begin to promulgate in response to a growing industry.

We’ve Moved: Strang Scott’s Boston Office Relocates to 6 Beacon Street

As of March 30, 2018, the Boston office of Strang, Scott, Giroux & Young, LLP has moved to 6 Beacon Street.  The firm’s relocation will provide ready access to Suffolk County Superior Court, the Federal Court, the Massachusetts State House and the Boston Bar Association.  We look forward to introducing our clients and friends to the new space.  Please be in touch regarding directions and parking options. 

 

For the firm’s mailing addresses, please see the firm’s Contact page.

 

 

Christopher Strang’s Article Published on the Cover of Under Construction

By on March 26, 2018

Strang Scott partner, Chris Strang, co-authored and article with Brendan Carter from the Associated General Contractors of Massachusetts that was published recently on the cover of the American Bar Association’s “Under Construction” quarterly newsletter.  The article details a case where Strang Scott prevailed against the Commonwealth of Massachusetts, successfully arguing that the awarding authority has a duty to ensure the validity of payment bonds provided by general contractors on public construction projects in Massachusetts.  The case was a matter of first impression in Massachusetts courts.  

Forfeiture Rule in Construction Disputes Under Review by the Massachusetts Supreme Judicial Court

By on March 6, 2018

Since the early 1900’s, Massachusetts courts have held that a contractor cannot recover on the contract itself without showing complete and strict performance of all terms or, in the event the contract cannot be completed fully, that the contractor substantially performed and attempted, in good faith, to perform fully. Under this rule, if the court finds that the contractor intentionally departed from the specifications of the contract, the contractor is prohibited from recovering under the contract, forfeiting its right to contract damages. 

The Massachusetts Supreme Judicial Court (SJC) will hear arguments this week requesting the forfeiture rule in construction cases to be overturned. The appellant in G4S Technology LLC v. Mass. Tech. Park Corp., SJC-12397, appeals a prior summary judgment ruling, wherein the trial court denied the contractor’s claims for approximately $10 million in delay-and-impact damages on the basis of the forfeiture rule. Despite ultimately completing the project, it was determined that the contractor paid some of its subcontractors late and submitted false certifications. Those actions were in breach the contract, and the trial court determined that those actions were sufficient to deny the contractor’s claims.

The SJC will consider whether Massachusetts should adopt an alternative standard that considers whether a breach was an uncured, material breach that alleviates the non-breaching party’s obligation to pay and weigh a breaching party’s lack of good faith or willfulness, among other factors to be considered by the court. This multi-factor analysis is applied currently by Massachusetts courts in other contract disputes, but not in connection with construction disputes.

Should the forfeiture rule be overturned, it would have wide-reaching consequences and create greater flexibility in arguing an entitlement to damages on breach of contract claims. Contractors would be wise to keep track of this case as it proceeds. If you have questions concerning your rights in connection with a construction dispute, consult an experienced Massachusetts construction attorney.

The White House Proposes $1.5 Trillion Infrastructure Development Program

By on February 12, 2018

The White House recently released its “Legislative Outline for Rebuilding Infrastructure in America.” 

In the preamble to the outline, The White House requested that Congress act to implement the infrastructure program in short order through new legislation.  In broad strokes, the outline calls for new spending to stimulate $1.5 trillion dollars in infrastructure investments, from federal and state governments, agencies and localities, to address American infrastructure projects.

Should the program be implemented by Congress in any meaningful way, it would mean a boon for public construction projects and contractors.  Contractors would be wise to keep a careful eye on this proposed legislation as it develops.     

 

Airbnb Hosts Beware: City of Boston Proposes Regulations on Short Term Rental Industry

By on February 5, 2018

Boston Mayor, Marty Walsh, recently proposed a citywide ordinance that will, if adopted by City Council, subject short-term rentals – such as those advertised through the popular home-sharing website, Airbnb – to regulations and reporting requirements.

The proposed ordinance requires that all short-term-rentals register with the city and pay an annual fee based on a tiered rental classification system. The classification system additionally dictates how many days per year various properties may be rented and the maximum number of guests per night. The ordinance also imposes a room occupancy excise tax on all short-term rentals. Short-term-rentals that are noncompliant with city codes will be ineligible for registration. Further, beyond requiring individual owner/host compliance, the ordinance also places reporting requirements on the booking companies themselves. 

Specifically, the ordinance classifies three types of short-term rental units:

  1. Limited Share Units
  2. Home Share Units; and
  3. Investor Units

Limited Share Units are rentals that are the host’s primary residence such that the host is present through the duration of the short-term rental. Limited Share Units may be offered for short-term rent 365 days of the year and will be subject to an annual $25.00 registration fee.

Home Share Units are also rentals that are the host’s primary residence that may be offered for short-term rent 365 days of the year. The host, however, need not be present through the duration of the short-term rentals, so long as the number of days booked for rental when the host is not present does not exceed 90 (consecutive or nonconsecutive) per year. Home Share Units will be subject to an annual $100.00 registration fee.

Investor Units are rentals that are not the host’s primary residence. Investor Units may be offered for short-term rental for up to 90 days (consecutive or nonconsecutive) per year and will be subject to an annual $500.00 registration fee.

Boston residents who participate in the short-term-rental economy are well advised to understand, and keep an eye on, proposed changes in housing law as regulations begin to promulgate in response to a growing industry.

Corporate Considerations: Piercing the Corporate Veil, a Primer

By on January 23, 2018

             The creation of a formal corporate entity and compliance with state prescribed formalities can offer business owners and members substantial protections from individual liability for business debts when acting by and through an entity. That protection, however, is not a given. In order to enjoy the benefits that limited liability entities afford, one must respect established corporate formalities and comport business practices accordingly.

            Generally, corporate entities enjoy the presumption that an entity is legally separate from its individual shareholders or members, such that individual shareholders/members are not liable for an entity’s liabilities.  Certain actions by shareholders/members, however, can lead the courts to pierce that liability protection, often called the “corporate veil,” and impose individual liability for facially corporate actions.  Thus, it is imperative to understand what behavior can cause such a result.

            Shareholder/members, or even other controlling or related entities, may find themselves liable for corporate debts where it is evident that those shareholders/members, or other controlling or related entities, are using an entity for their personal objectives.  My Bread Baking Co. v. Cumberland Farms, Inc., 233 N.E.2d 748, 751–52 (Mass. 1968). Further, in Massachusetts, piercing the corporate veil may be appropriate in instances,

(a) when there is active and direct participation by the representatives of one, apparently exercising some form of pervasive control, in the activities of another and there is some fraudulent or injurious consequence of the intercorporate relationship, or

(b) when there is a confused intermingling of activity of two or more corporations engaged a common enterprise with substantial disregard of the separate nature of the corporate entities, or serious ambiguity about the manner and capacity in which the corporations and their respective representatives are acting. Id.

            More specifically, the courts consider and weigh twelve factors when considering whether piercing the corporate veil is appropriate in any given case. Court consider whether there exists:

(1) Common ownership;

(2) Pervasive control;

(3) Confused intermingling of business activity assets, or management;

(4) Thin capitalization;

(5) Nonobservance of corporate formalities;

(6) Absence of corporate records;

(7) No payment of dividends;

(8) Insolvency at the time of the litigated transaction;

(9) Siphoning away of corporate assets by the dominant shareholders;

(10) Nonfunctioning of officers and directors;

(11) Use of the corporation for transactions of the dominant shareholders; and,

(12) Use of the corporation in promoting fraud.

Pepsi-Cola Metropolitan Bottling Co., Inc. v. Checkers, Inc., 754 F.2d 10, 14-16 (1st Cir.1985).

           Not all factors need apply to justify the disregard of a corporate form, however, all are considered in the determination of whether or not the protections afforded by corporate formality are being abused to an extent that warrants piercing.  Thus, people conducting business by and through various formal corporate entities would be well advised to ensure that their business practices observe corporate formalities, to ensure that they retain the protective benefits such entities generally afford.  If you have questions with regard to business formation and/or operations you should consult with a knowledgeable attorney to determine your best options. 

 

Christopher Strang Selected as 2017 Super Lawyer

By on December 12, 2017

Strang Scott is honored to announce the selection of Christopher Strang as a 2017 Super Lawyer by the Massachusetts edition of Super Lawyers. Mr. Strang has been recognized for his outstanding work in construction litigation for the ninth consecutive year, first as a Rising Star and then as a Super Lawyer. The Super Lawyers selection team chooses only 5% of eligible attorneys as Super Lawyers, and only 2.5% of eligible attorneys as Rising Stars. Both lists are the result of a process that includes a statewide lawyer survey, independent research, and peer reviews.

OSHA Injury Tracking Application Enforcement Delayed to December 15, 2017

By on December 8, 2017

The Occupational Safety and Health Administration (OSHA) recently extended, for the second time, the enforcement deadline for compliance with electronic reporting of injury and illness data through its Injury Tracking Application (ITA) until December 15, 2017.

The new rule took effect January 1, 2017, and required certain employers to submit injury and illness information electronically through the new tracking application.  The information required to be submitted to OSHA remains largely unchanged from the information already required to be kept under current regulations.  In other words, the primary difference is that it must be submitted through the ITA rather than through traditional methods.

In late November, the deadline was pushed back again to December 15, 2017.  Despite the second delay in enforcement it appears that the rule will eventually begin enforcement, even amid speculation that the rule might be scuttled entirely.  For the time being, construction employers should be prepared to submit their 300A and related forms electronically for years 2016 and forward electronically by December 15, 2017 to insure compliance with the new rule and avoid exposure to citations.

Contractors Beware: OSHA Begins Enforcement of New Respirable Crystalline Silica Standard

By on October 30, 2017

On October 19, 2017, OSHA released interim enforcement guidance for its Respirable Crystalline Silica in Construction Standard. This standard began full enforcement on October 23, 2017.

The Interim Enforcement Guidance issued refers to the standard promulgated on September 23, 2017.  Initially, rather than issue citations for violations of the standard, OSHA’s compliance officers were instructed to assist employers making good faith efforts to comply with the new standard for the first 30 days of its enforcement.  With the new Guidance issued on October 19, full enforcement of the new standard was rolled out on October 23.  Accordingly, employers in the construction industry, and particularly those where substantial silica exposures may be encountered, should be cognizant that full enforcement of the standard will now be enforced by compliance officers.    

The Respirable Crystalline Silica in Construction Standard established a new exposure limit for respirable crystalline silica at 50 micrograms per cubic meter of air as a weighted average during a worker’s an eight hour shift.  This new permissible exposure limit is five times lower than the prior limit for respirable crystalline silica. 

Because prolonged and intense exposure to crystalline silica is known to cause cancer, and crystalline silica is byproduct of many construction activities and materials, such as concrete, rock, mortar and sand, OSHA’s Respirable Crystalline Silica in Construction Standard is intended to limit such exposures.  Many safety measures can be installed and protective equipment can and should be used to avoid intense or prolonged exposures to crystalline silica. Contractors frequently involved in operations where such exposure is likely should be careful to provide all necessary safety measures, safety equipment and personal protective equipment necessary to comply with the new standard.

If you have questions regarding OSHA’s new guidance, your compliance with other OSHA safety standards, or in connection with your rights after a citation has been issued, you are well-advised to consult with counsel familiar with OSHA matters.