Brian Dapice - Boston's North Shore

Homeowner Oil Heating System Upgrade Delayed Until 9/30/2011

The new state Homeowner Oil Heating System Upgrade and Insurance Law (installation of an Oil line sleeve or oil safety valve) has been delayed until September 30, 2011. The new law, originally set to become effective July 1, 2010, has been delayed and will become effective on September 30, 2011, giving homeowners fifteen additional months to comply. In short, the law is designed to eliminate oil leaks that have plagued numerous older homes in the commonwealth where a fuel line leaves the oil tank and is then buried in concrete and reappears at the burner. In some of the homes the buried portion of the fuel line leaks and causes expensive environmental damage. In addition, the new law requires homeowner insurance companies to make available coverage, at an additional cost, for oil spills to all homes that are in compliance with the new rules.

Visit the DEP’s website for additional information: http://www.mass.gov/dep/cleanup/laws/hhsl.htm.

With respect to the expert opinions of many, I do not think Salem will see the same depressed economy in the upcoming months many other markets will. Vacancy is currently very low in the retail sector, and we are barely into the spring months!

Office space is a different story. There are several vacancies in and around downtown. With the addition of the new courthouse I hope to see that change. Many of the retailers I have spoken with are extremely encouraged!

Investments still maintain their great values, specifically in the Salem Point area. One should expect a true 9% cap when analyzing property values.

If you are interested in the Salem market at any capacity, I consider myself an expert in the Salem, Beverly & Danvers MA markets. Please feel free to email me through www.BrianDapice.com/contact.html.

Brian Dapice

Keller Williams Commercial

http://www.BrianDapice.com/_Salem-MA.html

Massachusetts Oil Heating & Insurance Law Changes

As of July 1, 2010 any home that is serviced by oil fired heating system in Massachusetts must comply with a new law that requires homeowners to upgrade their system equipment to prevent leaks. The new legislation is designed to prevent leaks from pipes and equipment that connect to your furnace.

The new law is addressed in Chapter 458 of the Acts of 2008. The two biggest provisions of the law change include the following:

The installation of either an oil safety valve or an oil supply line with a protective sleeve on systems that do not already have these devices in place. Insurance companies that provide homeowners insurance policies must offer coverage for oil tank leaks from heating systems that use oil.

Most homeowner’s policies do not currently include coverage for oil leaks leaving homeowners to fend for themselves with costly clean up bills. The new law makes it mandatory for insurance companies to offer coverage, however it is up to the individual homeowner to purchase this optional insurance. Implementation of the insurance coverage will also start as of July 1, 2010.

Who must take action?

Homeowners of one to four unit dwellings that are heated with oil must already have or install an oil safety value or an oil supply line with a protective sleeve. A licensed oil burner technician must complete installation of these parts.

If your home was built after January 1, 1990 -- you are more than likely already in compliance with the new law because state fire codes were changed to require these parts on new installations at that time.

Who is exempt?

Homeowners are not required to comply with these leak prevention steps if the oil burner is located above the oil storage tank and the entire oil line is connected to and above the top of the tank. Also if an oil safety valve or oil supply line with protective sleeve was installed on or after January 1, 1990 and the changes are in compliance with the oil burning equipment regulations. The copy of the oil burner permit from the local fire department may be used to demonstrate you are in compliance.

The cost of cleaning up an oil spill is very expensive. The cost of making this upgrade is very cheap. We are talking about a few hundred dollars to make these upgrades. Why take a chance and be left with a bill that could cripple you financially!

If you are unfortunate enough to have a leak and it reaches the soil beneath your home then a clean up is going to be necessary to bring your property back into compliance with state environmental standards. If the leak is severe enough and it impacts your neighbors or the local ground water supply the bill is going to be astronomical.

In Massachusetts, reports indicate that there are a few hundred spills a year. If you have a spill the cost for clean up on the low end is going to be $15000 to $20,000 dollars. A high end clean up can easily get into the hundreds of thousands! Who would ever want to deal with this kind of nightmare when it is so easy to avoid? I know if I owned a home that was built prior that 1990 I would not want to even think about such a catastrophe. I would make darn sure I was compliant right away!

What Kind of Insurance is available to homeowners?

In order to be eligible for coverage you must make sure that your home is either compliant or exempt from the new law.

The insurance will provide “1st party coverage” of at least $50,000 to cover the expenses of cleaning up a leak to soils, indoor air, or other environmental media from a home heating system at the residence itself and also reimbursement for personal property damage.

Secondly you must provide for “third party coverage” of at least $200,000 for dealing with any problems that occurred as a direct result of the leak for damage off of the property. This could be a near by home or the local ground water. The insurance coverage will also include costs for legal fees subject to a deductible not to exceed $1000 per claim.

Boston ranks 3rd in home-price discounts

According to a report on Trulia, Boston ranks third in the nation in home-price discounts, as reductions were recorded by some 35 percent of all listings on the market as of Dec. 1, 2009.

The city’s average price discount among current listings is 8 percent; the group’s asking prices have been reduced by a total of roughly $37.7 million.

Nationally, 22 percent of homes currently on the market have had prices reduced at an average discount of 12 percent. The top city, in terms of the percentage of homes that have been discounted, was Minneapolis at 40 percent.

Trulia states prices for luxury homes listed above $2 million have been slashed by an average of 14 percent, compared with 10 percent of homes priced at less than $2 million.

Luxury homes make up only 2 percent of the home listings tracked by Trulia, however they account for 26 percent of the $24.7 billion in price reductions recorded among its current listings, the company said.

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Changes to the Massachusetts Smoke Detector Law

Effective January 1, 2010, a new regulation relating to the installation and maintenance of certain smoke detectors takes effect. This article is intended to provide basic guidance to ensure that residential property owners, property managers, and real estate brokers understand and comply with the new Massachusetts law concerning smoke detectors which goes into effect next year. While the new law may not impose these new requirements on a specific property, it is imperative that owners ensure that their properties comply with these laws, both from a public safety and liability viewpoint. To avoid problems and determine the precise requirements for your properties, members are encouraged to consult with legal counsel.

SMOKE DETECTOR TECHNOLOGY

Currently, there are two primary detection methods used in modern smoke detectors: ionization and photoelectric. Ionization detectors typically have a constant current running between two electrodes. When smoke enters, it interrupts the current, setting off an alarm. Ionization detectors are often faster to alert than photoelectric detectors. However, ionization detectors are unable to differentiate between smoke and steam. As a result, they are prone to false alarms when steam from a shower or other source interrupts the current. This is especially true when the ionization detector is placed in close proximity to a kitchen or bathroom.

Photoelectric detectors emit a beam of light. In the absence of smoke, the beam passes in front of the detector in a straight line. When smoke crosses the path of the light beam, some light is scattered by the smoke particles, directing it at a sensor and triggering an alarm. Photoelectric detectors are less sensitive to false alarms from steam or cooking fumes but can take longer than ionization detectors to alert.

There has been an ongoing debate as to whether to require property owners to replace their ionization detectors with photoelectric detectors. On one hand, property owners have raised concerns about the cost of replacing smoke detectors, which continue to be operable. On the other hand, the fire departments have suggested that the elimination of false alarms outweighs the additional costs. The new regulations were enacted to resolve this ongoing debate.

NEW REGULATIONS

In recognition of the relative strengths and weaknesses of photoelectric versus ionization smoke detectors, the Board of Fire Prevention Regulation has passed a new regulation (527 CMR 32.00 et seq). Under the new regulation, owners of certain residential buildings will be required to install and maintain both ionization and photoelectric smoke detectors. While the new regulation does not change the locations where smoke detectors are required, it does allow the installation of both technologies in certain locations.

Under the new regulation, a smoke detector utilizing both technologies is required in all the same locations, except within 20 feet of a kitchen or a bathroom containing a bathtub or shower. Within 20 feet of a kitchen or bathroom containing a bathtub or shower, only a photoelectric smoke detector is allowed. An ionization detector is prohibited in these places due to their tendency to be set off by steam.

All property owners should determine what type of smoke detectors they are currently using. Subsequently compliance can be achieved by installing two separate detectors using these technologies, or by installing one detector, which uses both technologies.

WHAT PROPERTIES ARE AFFECTED BY THE NEW REGULATION?

Determining whether a specific property is affected by the new regulation requires a case-by-case analysis and, therefore, property owners are encouraged to consult with legal counsel to determine the specific requirements for their property. That being said, the following types of properties are impacted by the new regulation:

Residential buildings under 70 feet tall and containing less than six dwelling units.

Residential buildings not substantially altered since January 1, 1975, and containing less than 6 residential units.

All residential buildings sold or transferred after January 1, 2010, which are less then 70 feet tall, have less than six units, or have not been substantially altered since January 1, 1975.

For all properties in these categories, compliance is mandated by January 1, 2010. It should be noted that the law does not apply to these larger buildings or those, which were substantially altered since January, 1975, as these properties already were required to upgrade their fire safety systems under other existing laws.