Attorney Sarah Neault To Lead Estate Planning Workshop

Join Attorney Sarah Neault and insurance expert Kerry Peabody in Portland on Wednesday evening, September 19, 2018, for a two hour workshop on Estate Protection and Long Term Care Planning.  The event will take place in the boardroom of Clark Insurance at 1945 Congress Street from 6 to 8 p.m.  Click on the registration link for more details and instructions on how to sign up.

Registration Link

CAMPING IN THE SHARING ECONOMY: WHAT MUNICIPALITIES AND LANDOWNERS NEED TO KNOW

Attorney Ben McCall

Maine is known for its beautiful outdoors — particularly its ability to provide a wide range of nature-based vacation options for residents and non-residents alike.

Chief among these treasured outdoor activities is camping (and even glamping), and from Eliot to Fort Fairfield, state parks, municipal parks, and private campgrounds offer everything an outdoor enthusiast could want.

Given camping’s widespread popularity, it comes as no surprise that campgrounds have found a new home within the sharing economy.  Just like driving your own car for Uber, or renting out your spare bedroom (or whole apartment) on Airbnb, new platforms like Hipcamp and Tentrr are allowing property-owners to rent out their back-40 for some extra cash.

The concept makes perfect sense.  Many people, particularly in Maine, own large swaths of wooded area, providing an idyllic back drop for camping.  Add a savvy website that can attract potential customers, and in the case of Tentrr, actually provide the necessary equipment for would-be visitors, and we have a formula for economic success.

Of course, leave it to land use and municipal lawyers to throw a damp (not wet, but certainly damp) blanket on the situation.  Why, you ask?  Because many of the same local regulatory issues that plague Uber and Airbnb (explored by this blog recently) also apply to this burgeoning backyard industry.

From a landowner’s perspective, renting out unused acreage may seem like a no-brainer — and likely would never prompt a thought that doing so could violate local municipal ordinances.

This view is mistaken.

Most towns throughout Maine, particularly those in more rural parts of the state, have adopted specific definitions of campground, and require proper permitting.

Take, for example, the Town of Arundel.  Its Land Use Ordinance defines campground broadly, as “any premises established for overnight use for the purpose of temporary camping, and for which a fee is charged.”  And while campgrounds are allowed within every residential zone in town, any prospective campground owner is required to receive a conditional use permit, which includes a slew of standards ranging from density restrictions, to proper septic system design.

Or, take the Town of Kennebunk.  While a “campground” must include at least two campsites, campground owners must still receive a certificate of occupancy from the Town, and comply with mandatory setback and waste management rules.

All this leads to two key takeaways:

1. Landowner Beware: there’s no doubt that new backyard rental platforms are innovative, and could prove beneficial to both Maine residents and Maine tourists — and likely is allowed (following the proper process) in most locations.  However, like so many other land use activities, a potential Tentrr or Hipcamp “campground owner” would do well to consult with the Code Enforcement Officer, or better yet, a land use attorney, to determine the implications. After all, receiving a notice of violation, or potentially being subject to a hefty fine, is never on anybody’s wish list.

2. Town Prepare: just like short-term rentals, rapid changes in land use trends often catch municipalities off guard. While many municipalities have adopted definitions of campground that can guard against the unintended consequences of these new digital platforms, most would do well to consult an attorney to ensure that such campgrounds are properly regulated.  Definitions of particular land uses may need to be tweaked, and a Town may want to consider limiting backyard camping to certain areas in order to protect against adverse environmental impact.  Failing to do so could allow the quick proliferation of “backyard campgrounds,” leading to a bevvy of grandfathered uses in the future.

The municipal and land use attorneys of Bergen & Parkinson have significant experience helping both towns and landowners navigate these challenges.  We’d be happy to discuss your backyard campground, short-term rental, or other sharing economy questions with you, and help you find the best answers and solutions.

Tax Savings Tip for Homeowners...

We have all heard of Benjamin Franklin’s quotation, “In this world nothing can be said to be certain, except death and taxes.”  Well, I like to look at a glass half-full rather than half-empty, so I will share a key tip on how to LOWER your real estate tax bill to take advantage of the property tax exemptions Vacationland has to offer! 

The Maine Revenue Services offers a $15,000.00 Homestead Exemption for certain individuals that have owned a homestead property in Maine for at least a full year of occupancy AFTER April 1.  This exemption is only offered to homeowners who reside in the property as their permanent residence. 

What will the Homestead Exemption save you?  Here is how that breaks down.  Property taxes are levied according to a mill rate which varies per Town/City. The mill rate is the dollars and cents per $1,000 of value that you will pay in property taxes. For example, if you own a home valued at $100,000 and the tax rate is 20 mills, then your tax bill will be $2,000 (or $20 x 100).  The tax liability for your home would be $2,000.00 for the year.  With the $15,000.00 homestead exemption, the town would lower your assessed value from $100,000.00 to $85,000.00 to determine tax liability.  Based on the $20.00 MILL RATE, your tax liability would now be $1,700.00 (or $20 x 85), saving you $300.00 for the year!

In addition to the Homestead Exemption, the State also offers a $6,000 Veterans Exemption.  To be eligible for this exemption, you must:

·         be a veteran who served during a recognized war period;

·         is 62 years or older; or;

·         is receiving 100% disability as a Veteran, or;

·         became 100% disabled while serving. 

Further a veteran who received a federal grant for a specially adapted housing unit may receive a $50,000.00 exemption.  Additionally, the State offers exemptions for individuals who are determined to be legally blind ($4,000.00).  The same calculation can be used as demonstrated above to determine your tax savings.

Applications for all exemptions can be found at www.maine.gov/revenue/propertytax/sidebar/exemptions.htm

If you have any specific questions about property tax bills, or real estate in general, I am happy to discuss your needs with you.

Erin Kalakowsky practices in Bergen & Parkinson’s real estate group.  She can be reached at 207-283-1000 or ekalakowsky@bergenparkinson.com.

Guardianship: A Cautionary Tale

by Attorney Brin Moore

I just closed out a spreadsheet, and (phew) everything balanced. I’m pleased with this result, but I have a lump in my throat. This spreadsheet always leaves me feeling a little sad. It’s an annual accounting for a court-appointed guardian and conservator of an incapacitated adult. Once a year, I work with my client (the guardian) to update this spreadsheet detailing how he has used funds to care for a “protected person.” This framework is in place to protect adults who have lost the capacity to make legal decisions for themselves and to hold accountable the person appointed to help them manage daily life.

The sad part? This guardian is a husband, and the protected person is his beloved wife of 30+ years. And although they’re only in their early 60s, the wife suffers from early onset dementia. But wait, if it’s a married couple, why would a husband need to be his wife’s legal “guardian”? Can’t spouses just take care of things for each other? Sadly, not always. In this case, the wife’s dementia symptoms began when she was quite young, and her condition declined rapidly. The husband was able to manage everything for a while, but eventually, it became necessary to transfer some assets that the wife owned in her own personal name. Since she could no longer understand or sign legal documents herself, she needed someone with legal authority to act on her behalf.  That’s when I helped the husband file paperwork to become his wife’s guardian and conservator. We had to file a petition, get doctor’s reports, notify family members, prepare an inventory of all of the wife’s assets, and meet with a court-appointed visitor to assess the wife’s condition. Finally, we attended a hearing at which the judge officially appointed the husband as guardian for his wife. Now, every year the husband has to report to the court how he is managing his wife’s health and assets on her behalf.

What is especially sad about this story is that this whole procedure could have been avoided. You’ve probably heard of a Power of Attorney (or POA). Using a POA, one person can appoint another as her legal “agent” to make decisions on her behalf. By appointing an agent under a POA while you still have capacity to do so, you preempt the need to go through a court-appointed guardianship. If you someday lose legal capacity to make your own decisions, your agent is ready and able to start making decisions for you.

If you don’t have a POA, you should talk with an attorney about appointing someone you trust to help you make financial or medical decisions when you are no longer able to make those decisions for yourself. Put these tools to use and enjoy the peace of mind that comes with having a well-advised plan.

Brin Moore practices in Bergen & Parkinson’s estate planning group. She can be reached at 207-985-7000 or bmoore@bergenparkinson.com.

Mesothelioma and Asbestos Exposure: Disease-related illnesses in Maine increase despite the decline in use of asbestos

by William J. Gallitto, III

A recent study published by the U.S. Department of Health and Human Services’ Centers for Disease Control and Prevention (CDC) found that despite regulatory actions and the overall decline in use of asbestos, mesothelioma-related fatalities increased from 2,479 in 1999 to 2,597 in 2015.  During this period, mesothelioma diagnoses, a specific type of cancer only caused by exposure to asbestos, increased in persons older than 85, both sexes, and all ethnic groups.  Specifically, Maine has one of the highest age-adjusted death rates for mesothelioma of any state in the country, closely followed by Massachusetts and New Hampshire.  The CDC’s study indicated that ship building and construction industries were “major contributors” to mesothelioma mortality rates.

This study also indicates that the continuing occurrence of mesothelioma deaths among persons 55 years of age and younger suggests that there are ongoing occupational and environmental exposures that are still occurring despite regulatory actions taken by the Occupational Safety and Health Administration (OSHA) and the Environmental Protection Agency (EPA) to limit asbestos exposure.  Mesothelioma fatalities were projected to decline after 2005, but just the opposite occurred.   Studies suggest that more needs to be done at the national and state level to protect against this preventable, occupational and environmental hazard.

If you or a loved-one has been diagnosed with mesothelioma, lung cancer, or has been exposed to asbestos, please contact attorney William J. Gallitto, III at Bergen & Parkinson, LLC today to better understand your legal rights.  Attorney Gallitto has years of experience litigating asbestos-related cases and has handled hundreds of asbestos-related cases to conclusion.

Link to study: https://www.cdc.gov/mmwr/volumes/66/wr/pdfs/mm6608a3.pdf 

       

Stiff Competition?

by Courtney Hart

Many professionals in Maine find themselves at a crossroads when accepting a new job. Sometimes an employer will ask a new employee to sign a non-competition agreement, also known as a “covenant not to compete.” Although most of the details of new employment, such as salary, hours, job description and benefits concern the job itself, the non-competition agreement deals with what happens if things don’t work out and the employment ends. Also, unlike the terms of employment, non-competition agreements sometimes aren’t negotiable.

What might this mean for you?

First, we’ll consider what a non-competition agreement does. Usually, they indicate that if you decide to leave the job, you can’t work for a competitor for a certain amount of time and within a certain distance of the old job. This prevents people from going next door to the competing insurance agency, for example, and taking the special knowledge or trade secrets they may have acquired at the first job and using them to benefit the competitor. It can also stop you from soliciting clients of the business to go with you to your new position.

All of this may sound reasonable when you’re signing it and you’re excited about the new opportunity, because you’re obviously not contemplating what happens if things go wrong. But, what if things do go wrong, or you’re simply ready to make a change several years down the road? That’s when things can get complicated. If the old employer feels that your new job is a threat to her company, she probably will try to enforce the agreement you signed.  This may keep you from pursuing the new opportunity you want.

So, what should you do if you’re contemplating accepting a job offer, or if you want to leave your job but are concerned that such an agreement may prevent you from working?

That’s where attorneys come in.  If you’re asked to sign a non-competition agreement, you should ask an attorney to look over it for you. The attorney will be able to tell you if the restrictions seem reasonable or if they may go too far. If the attorney thinks the provisions might be too extreme, he or she may be able to help you negotiate better terms with the new employer.

The same holds true if you’d like to make a change and you’re afraid this kind of agreement may prevent you from doing so, or if you have a new job and your former company tries to prevent you from working by threatening a lawsuit. One of our experienced attorneys can help you by reviewing the agreement to see if it is too broad.  An attorney can help you try to work things out with the old employer in a way that allows you to move on. If not, your lawyer can defend your rights in a lawsuit.

Courts in Maine look carefully at these kinds of agreements because they are meant to protect the knowledge and client base of companies in specialized professions, not to prevent people from working in their chosen trade or profession. A court will ask questions such as:  How long does this restriction last – is it just 6 months, or is it 2 years? How far does the restriction go – is it within 5 miles of the old company or 50?  Typically, the broader the restrictions, the harder it will be for a company to enforce them, especially if they gave the employee no choice but to sign the agreement to get the original job. But whether a non-competition agreement will be enforced depends on the specific facts in each case – the kind of profession, the likelihood that clients would follow, the scope and duration of the agreement, and more. That’s why you need an attorney in your corner –  to make sure you’re treated fairly and you can keep working.

If you have any issue with a non-competition agreement, please contact one of our experienced attorneys at Bergen & Parkinson, LLC today, and we’ll be glad to help you navigate the situation.

Short Term Rental Regulations: A Hot Topic for Maine Municipalities, But Choices and Questions Remain

Made increasingly popular by websites like AirBnB and Home Away, the availability of short term rentals have arguably been a boon to the Maine economy (to the tune of over $26 million in 2016). Not only does this model within the sharing economy allow individuals to rent out unused rooms to supplement their monthly budgets, but they increase the availability of cheaper rooms and apartments for would-be vacationers. Maine does, after all, support a nearly $6 billion tourism industry.

However, short term rentals present a bevy of problems that municipalities across Maine have only recently begun to tackle. The three most prevalent are:

1.    Zoning Violations: Seekers of short term rentals are often attracted by the opportunity to stay in a quiet, established neighborhood, rather than at a generic hotel. Therein lies the problem; short term rentals often violate  the neighborhood’s underlying zoning . Most units listed on short term rental websites are based in single-family residences, either as the rental of a single room, or more often, the rental of an entire residence — effectively converting  single family residences into a lodging houses, a use that is often prohibited in residential districts. This dynamic can also turn quiet residential streets into boisterous ones, with previously-occupied homes morphing into small hotels each and every week, prompting consistent complaints from neighbors.

2.    Code Violations and Under-regulation: When they were constructed, most short term rental units were inspected and approved as single-family or multi-family residences. Because of this, local Code Enforcement Officers almost certainly did not ensure that the homes were outfitted with the necessary life safety equipment, think smoke detectors and CO detectors, or that they had the necessary points for ingress and egress required of traditional lodging units like hotels, motels, and inns. As such, short term rental units likely create compliance issues that other lodging accommodations would not. Their owners also may not carry sufficient commercial liability insurance to protect them should any issues arise. These complaints are often brought by members of the State’s hotel industry, who do have to comply with stringent, and often costly, regulation.

3.    Housing Stock Shortages: It has been argued that the proliferation of short term rental units has harmed the year-round rental housing markets in Maine’s larger towns and cities. For example, consider a real estate investor who purchases a small house in a quiet Portland neighborhood. He or she could rent it to a local resident for $2,000 a month, or the house could be listed on AirBnB for $100 a night, leading to a much larger return. This sort of profit margin has prompted out-of-state investors to swoop in and scoop excess housing stock — and  while this approach could work for the investor, it leads to that house being taken off the year-round market, leading to a general increase in the price of rental housing. Housing advocates have connected these dots, pointing out that if unchecked, short term rental units could create negative effects for those struggling to find affordable housing.

So what is a municipality to do? Not surprisingly, those Maine towns that have tackled these issues have come up with a number of different approaches. Portland, for example, has recently considered a new set of regulations that would endeavor to rein in the rapid growth in short term rentals. Included would be an annual registration and inspection requirement (to promote safety), and a city-wide cap on units that are not owner-occupied (to combat an ongoing housing shortage). Towns in York County, like Ogunquit, have also added an annual registration requirement and are ramping up enforcement against owners who don’t comply. Others, like Rockland, have required planning board approval for any short-term rental of an entire residence, rather than a single room within an owner-occupied house.

Yet not all Towns are going along for the ride. Many coastal and ski-resort towns, that rely heavily on tourism for general revenue, have decided to simply let short term rentals be, judging that a “the more the merrier” approach was best. Instead of adding new regulations, they remain content dealing with issues posed by short term rentals on a case by case basis, and using existing parking, noise, and nuisance ordinances to do the heavy lifting.

The bottom line is that municipalities have only recently begun to grapple with the opportunities and issues that short term rentals present. There is certainly no “one-size-fits-all” approach, but municipalities across Maine should give some thought to this new area of the law. Although most short-term rental issues may seem to only affect larger towns and cities, all municipalities should look at taking steps to better understand the unintended impact that this new type of property can create.

Of course, increasing regulation can also present problems for those who wish to rent their own homes. Regardless of which side of the equation a party is on, Bergen & Parkinson is eager and ready to help.

For more information, contact Ben McCall at 207-985-7000, or by email at bmccall@bergenparkinson.com.

Marijuana Legalization in the State of Maine

By Leah Rachin 

On November 8th, Mainers will go to the polls to vote on a number of statewide ballot questions. Among them is whether or not the State should allow (and subsequently regulate and tax) the sale and possession of marijuana for recreational purposes, under the proposed Marijuana Legalization Act (the “Act”). Not only would the bill permit the possession and recreational use of up to 2 ½ ounces of marijuana, but perhaps more importantly, it would allow the state and municipalities to license both “retail marijuana establishments” (including stores and cultivation/manufacturing facilities) and “marijuana social clubs.”

Whether marijuana legalization in Maine becomes a reality is still an open question; however, many Maine municipalities are exploring their own regulatory options, should this measure pass.

First, it is important for municipalities to note what they cannot do if this ballot measure passes. Municipalities may not prohibit the private use or cultivation of marijuana completely, so long as that use is by a person over the age of 21. Additionally, municipalities may not pass ordinances that universally prohibit marijuana use of any kind.   

However, municipalities have numerous options available to ensure that possible legalization of recreational marijuana is regulated in a way that is appropriate for their particular city or town.  The options include: 

1. Moratoria: As an initial measure, municipalities can choose to enact a moratorium on all marijuana establishments, allowing additional time to plan and study their potential impact. This action is explicitly allowed by Maine law (30-A M.R.S.A. § 4356) upon a finding that a development moratorium is necessary either to prevent an overburdening of resources or because existing regulations are inadequate to prevent serious public harm. Arguably, the need for additional public safety officers, or the need for additional time to amend the municipality’s comprehensive plan and ordinances would satisfy these criteria. It should also be noted that there may still time in some municipalities to enact moratoria before Election Day.  Counsel should be consulted as soon as possible if such an option appeals.
2. Zoning: The Act explicitly allows a municipality to use its zoning power to regulate both the operation and the location of any marijuana “retail establishment or social club.” This means that similar to the use of heavy industrial or retail zones to protect predominantly residential areas, a municipality can limit where and how many businesses selling or growing marijuana may set up shop.  The Act even allows municipalities to prohibit them entirely.
3. Independent Review: Before any marijuana retail establishment or social club can operate, municipalities have the option of creating and using their own licensing process (separate and distinct from the State of Maine’s). This process can include a public hearing on each proposed establishment, and can be tailored to meet the specific needs of the community. 
4. Odor Ordinances: Some municipalities may also consider adopting ordinances to combat the smell of marijuana, and other odors that residents may find offensive. If drafted properly, the ordinance could allow regulation of a whole variety of offensive odors, providing a valuable tool for local code enforcement officers. Counsel should be consulted to ensure both that the ordinance fits the needs of the municipality and that it is drafted to survive common legal challenges based on whether or not the ordinance properly defines exactly what types and what amounts of odor may be prohibited.   

While the possibility of marijuana legalization may cause anxiety for some municipalities, you should rest assured that many options exist to help adapt to the potential new reality. Counsel should be consulted, however, to ensure that any proposed ordinances or other actions comport with the proposed Marijuana Legalization Act and existing law.   

Leah Rachin is an attorney with Bergen Parkinson, LLC and is a member of the firm’s Municipality Practice Group. The group routinely represents and counsels city and town municipalities in the state of Maine.  Contact: lrachin@bergenparkinson.com 

Your Online Reputation - Protecting Your Business from Social Media

“It takes 20 years to build a reputation and five minutes to ruin it.”

—Warren Buffett

You have worked hard for years to build a well-respected, profitable business in Maine.  Yet things are slow.  You search for an answer.  You Google your company’s name and find misleading, negative reviews. Is the author a disgruntled ex-employee or an underhanded competitor hiding behind a fake Internet persona?  What do you do?  While social media has revolutionized how businesses and consumers interact, it has also created new legal risks and challenges for businesses attempting to capitalize on the Internet’s vital role as a source of consumer information.  Facebook and Twitter are now common ways for businesses to connect with their customers.  Similarly, consumers use a host of other social media platforms, including Yelp, Google, YouTube and blogs to share their experiences and opinions—both good and bad—of a company’s product or service.  Legal developments typically trail behind societal changes.  The same is true in the social media context:  Our society’s almost universal use and reliance on social media is now just beginning to reveal a number of legal risks to businesses, including two primary risks:  (1) consumers or competitors posting false negative reviews that adversely impact sales, profits and the company’s reputation, and (2) a company creating its own liability by posting false (or confidential) information online. Communicating untrue information that negatively affects a person’s or a business’ profits, sales or monetary gain is known as defamation.  These statements are either slander (spoken defamation) or libel (written defamation) and can be the basis of a lawsuit.  The laid-back, shoot-from-the-hip style of most social media users for posting their comments online can have monumental consequences for the reputation and liability of your business.

                                                                         

WHAT IS DEFAMATION?

Although there is some variation from state to state, defamation generally occurs when Person A makes a false statement to Person B about Person C, and that false statement causes economic loss to Person C.  In the resulting lawsuit, Person C sues Person A for defamation.

PROTECTING YOUR ONLINE REPUTATION

At one time, a word-of-mouth recommendation was the most trusted and valued endorsement a company could earn.  While word-of-mouth still exists today, it takes on a modern format:  Internet reviews, product or service ratings and user comments.  This information creates a company’s reputation in the 21st century. With today’s ever-increasing reliance on the Internet, a company’s online reputation is one of its most valuable assets.  A recent market survey by Cone, a Boston-based market research firm, found that 80 percent of people have changed a product or service decision due to a bad review.[1]  Therefore, it is not surprising that companies go to great lengths to protect, maintain and improve their online reputations. Historically, companies avoided confronting negative reviews under the theory that more attention would heighten the damage.  But recently, this trend has been changing.  Companies are more quickly responding to defamatory comments by taking legal action against the authors of false and misleading online reviews. 

RESPONDING TO DEFAMATORY COMMENTS

If someone makes false or defamatory statements about your company, consider taking the following steps: (1) react to the false statement in a positive way, (2) use the site’s administrative procedures to remove untrue content, and (3) request a retraction of the statement.  If these attempts are unsuccessful or if you wish to pursue a defamation case, be sure to obtain the name and any other identifying information of the author of the untrue statement, take a picture or “screen shot” of the defamatory statement, and keep track of all related business expenses and losses that result from the defamatory statement.

MINIMIZING YOUR OWN LIABILITY

Companies operating in today’s environment must recognize they too face liability for defamatory statements made by even low-level employees.  A company’s public communications, whether made by the CEO or a newly hired employee managing its Facebook or Twitter page, can be actionable for defamation if the statements are untrue and cause monetary damage.  To protect your business from potential social media liability, you should:

1.      Have a clear company policy that provides guidance regarding the proper use of social networking sites;

2.      Train all employees on your social media policy and the importance of appropriate social media use;

3.      Carefully select and limit the number of employees who will be the voice of the company on social media sites; and

4.      Be careful and respectful.  Post only truthful statements, as truth is a defense to defamation; and obtain appropriate insurance coverage (be sure to understand the scope of the coverage and the

exclusions).

Implementing a social media policy is an essential to protect your business.  We recommend that you consult with an attorney to be sure you are in compliance with the latest rulings in your state.  Companies often fail to properly implement their social media policy.  Be sure your employees know its importance and how to conduct themselves.  As social media continues to play a vital role in how businesses and consumers interact, be aware that while defamation lawsuits can be a powerful tool to protect your online reputation, they are also something to guard against.  Closely monitor online reviews of your company, as they substantially affect your business.  As unscrupulous individuals and businesses use social media to harm others, defamation claims will continue to present one avenue to protect your company.  But first, limit the risk.  Take proactive steps to avoid inappropriate online posts and manage the unforeseeable risks through company-wide training and the purchase of insurance. 

Social media is here to stay.  Businesses must accept the challenge of operating in this new environment.  By understanding these rules and turning them to your advantage, you will maximize your chances of operating a successful business.

William J. Gallitto is an attorney with Bergen & Parkinson and is a member of the firm’s Civil Litigation Group.  He routinely represents and counsels companies and businesses in litigation, planning and risk management.  Bill can be reached at wgallitto@bergenparkinson.com.     

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[1] Cone Communications, Cone Online Influence Trend Tracker, and Game Changer: Cone Survey Finds 4-out-of-5 Consumers Reverse Purchase Decisions Based on Negative Online Reviews.

Caution:  Even Unsigned Emails Can Bind Real Estate Deals

by Jason G. Howe, Esq.

Careful what you put in an email – it might bind you to a contract.

Real estate and business attorneys deal with this daily, but it is frequently a shock to sellers and buyers, landlords and tenants.

In the recent case McClare v. Rocha, Maine’s highest court found that emails between the parties’ representatives can create a purchase and sale agreement - even without a seller’s signature.

The McClare case reiterates the importance of carefully choosing the words used when discussing not only home sales, but also leases and other contracts via electronic mediums like emails, texts, Facebook, Twitter, etc.  It may not take much. 

In McClare, the seller’s representative wrote: “The assessed value of the real estate is $430,600 . . . Jim [Rocha] believes that in this market, and particularly at that location, the assessed value probably is higher than the actual market value. Jim has offered to acquire the McClare interest for one third of the assessed value . .  . Jim says that he would be happy to speak with the

McClares directly if that would facilitate an agreement . . .”

The buyer’s representative wrote back: “My client accepts your clients offer of $143,533 for his 1/3 interest in the Bangor Tire property. Please let me know how much time you need if any to raise funds. I will prepare the deed.”

Look sparse?  It is.  But it was still enough for the Court to overturn a lower court’s ruling that had tossed out the Buyer’s claim that a contract existed.  Now, the case is back in litigation.

Regardless of the electronic medium, words like “offer” and “acceptance,” combined with the property or rental location and a price term can be enough to create a binding contract.  While this can be a handy tool for business and real estate professionals, McClare illustrates that the law (technically called the Uniform Electronic Transactions Act) cuts both ways.

To avoid unexpected contractual obligations, seek legal counsel to clarify electronic communications and/or provide guidance to the real estate professionals representing you in a listing, loan, or business negotiation.

Attorney Howe practices in the firm’s Corporate/Real Estate group.  He is available at jhowe@bergenparkinson.com, and by phone at 207-985-7000.

Bergen & Parkinson Legal Blog

Welcome to the Bergen & Parkinson legal blog!  Through this blog, my colleagues and I will share information from each of our practice areas that we think you’ll find helpful, relevant, and – yes – even interesting.  We'll talk about things like business formation and transactions, employment law issues, litigation, and real estate transfers. My colleague, Sarah Neault, and I will be blogging about our practice area of estate planning.  Every day we help our clients identify their personal and financial goals and create estate plans to achieve them.  We find that many of our clients have the same questions and concerns, and through this blog we’ll be sharing answers to some of those common questions - questions that you might have too.  We also plan to post interesting articles we come across, and explain unique estate planning tools that you may not know about but that could be useful to you.  Our hope is to break through the legal jargon and make information more accessible to you.  So please check back here from time to time for posts from me and my fellow attorneys, and look for updates on our website, www.bergenparkinson.com.  Thanks for reading!

Brin Richer, Esq.