Withholding Form - Rhode Island
What is a preliminary injunction?
A preliminary injunction is a tool used by litigants to obtain relief from the
However, there is also another, less
cited provision of Rule 65(c), which states that Unless the court, for good
cause shown, shall otherwise order, no restraining order or preliminary
injunction shall issue except upon the giving of security by the applicant, in
such sum as the court deems proper, for the payment of such costs and damages
as may be incurred or suffered by any party who is found to have been
wrongfully enjoined or restrained.
While, on its face, this language
provides that, every time a party files a motion for preliminary injunction, courts
are required to consider whether a bond should be posted, in our experience,
courts rarely impose such obligation. However, we have recently seen courts
request briefing on whether a bond should be required, and there may be a trend
towards giving due consideration to such question. The bond requirement can
shape a party’s decision to seek a preliminary injunction in the first place
and can have a significant impact if an injunction is ultimately granted.
The Purpose of the Bond Requirement
The bond requirement in Rule 65(c) serves to protect a party against whom
an injunction has issued from suffering uncompensated losses. Because
injunctions are often granted early in litigation, before discovery is complete
and before the merits of the claim have been fully adjudicated, there is an
inherent risk that an injunction could later prove to have been improperly
granted. The bond requirement provides a way to mitigate that risk and for the party
against whom the injunction was wrongfully issued to be made whole.
Courts exercise broad discretion in
deciding whether to require a bond and, if so, in what amount. Although there
is limited case law on the issuance of bonds as they relate to preliminary
injunctions, the factors courts consider in determining whether to issue a bond
in similar circumstances are instructive:
1. Likelihood of damages. The central
consideration is whether the party opposing the injunction has shown that it
may suffer damages if the injunction later proves wrongful. Courts generally
require the damages to be adequately supported beyond mere conclusions.
2. Amount of damages. If damages are determined
to be possible, the court assesses the potential magnitude of damages. As with
the likelihood of damages, the party opposing the injunction must provide
support for the amount of damages claimed. The bond that issues should be
commensurate with the amount of damages claimed and supported. Minimal or
speculative damages may justify a nominal bond or no bond at all, while substantial
damages that are properly supported may warrant a higher bond.
3. Financial hardship. Courts may take
into account the movant’s ability to post a bond. Requiring a prohibitively
large bond could effectively deny injunctive relief, even where the moving
party has shown irreparable harm and likelihood of success on the merits and
would otherwise be entitled to an injunction.
4. Balancing of harms. Ultimately, courts
seek to balance the equities between the parties. The bond should provide fair
protection to the party against whom the injunction issues, without effectively
prohibiting the moving party from obtaining an injunction they would otherwise
be entitled to.
Impact on Parties
The possibility of having to post a
bond in connection with obtaining a preliminary injunction has significant
strategic implications for parties considering moving for a preliminary
injunction. The moving party must evaluate not only its likelihood of success
on the merits and whether they may suffer irreparable harm without an
injunction, but also whether it can afford the security that may be required by
the court. For parties with limited resources, the prospect of posting a
substantial bond may deter them from seeking an injunction altogether.
Even where the moving party is willing
to post a bond in order to obtain an injunction, the requirement adds financial
risk. If the injunction is later deemed to have been improperly issued, the
party against whom the injunction was issued may recover damages against the
bond, and the moving party would not be entitled to reclaim that portion of the
bond that it posted. Thus, parties must weigh the benefits and drawbacks of
seeking a preliminary injunction carefully.
Conversely, for parties against whom
an injunction is sought, raising the bond issue can serve as a strategic
deterrent. By presenting evidence of potential damages, the party may persuade
the court to require a significant bond, thereby discouraging the moving party
from seeking an injunction at all or increasing the moving party’s financial
stake in the litigation.
If a preliminary injunction issues and
the court requires a bond, the moving party must promptly arrange to post the
security in the required amount. This can be a logistical hurdle, especially if
the bond is substantial and the moving party must secure financing. On the
other hand, if the court grants an injunction without requiring a bond, the moving
party obtains the full benefit of the injunction without any additional
financial burdens. The absence of a bond typically reflects the court’s
conclusion that the party against whom the injunction is sought failed to sufficiently
prove the likelihood of damages or the amount thereof, or that there was some
other equitable consideration that weighed against the issuance of a bond.
Conclusion
Rule 65(c) of the Massachusetts Rules
of Civil Procedure reflects a balancing act that involves protecting parties
from wrongfully issued injunctions while ensuring that parties are not denied the
potential for equitable relief due to financial barriers. Courts exercise
considerable discretion in applying the bond requirement, guided by evidence of
potential harm and balancing of equities between the parties. For parties
seeking a preliminary injunction, the possibility of a bond is a critical
factor in deciding whether to pursue an injunction, while for parties opposing
such injunctions, raising the issue can be a valuable strategic tool.
A welcome and frequent contributor to
REBA News, Stephen is an associate in the litigation and real estate
departments of Moriarty, Bielan & Malloy LLC. He can be contacted at swiseman@mbmllc.com.
Bridget M. Rose
Last April, the Boston launched a new Co-Purchasing Housing Pilot Program (“Program”). The Program, which is one of several initiatives adopted in
The Program is designed to promote
co-ownership of multifamily properties in Boston, but it appears to only
support participating homebuyers in the purchase of multifamily properties to
be held in common ownership, as joint tenants or tenants-in-common. The Program
is not designed to support groups of homebuyers who wish to purchase and own a
multifamily property through a trust or corporation, and in fact, actively
discourages participants from purchasing a multifamily property for ownership
through the condominium form. By expressly deterring participants from using
the condominium form of ownership, the Program may leave co-owners without the
necessary tools for successful ownership of a multifamily property.
Eligibility, Requirements, & Benefits
Participants in the Program can receive zero-percent interest deferred loans, payable upon sale, transfer, or refinance, to help cover the costs of down payment (in an amount up to five percent of each household’s share of the purchase price) for the purchase of eligible multifamily properties. Eligible households earning up to 100 percent AMI (approximately $130,600 in Boston) can receive up to $50,000, and eligible households earning up to 135 percent AMI (approximately $176,300 in Boston) can receive up to $35,000.
To be eligible for the Program, each homebuyer must:
Eligible properties are two- or three-family vacant homes located within the City of Boston, with as many vacant, unoccupied units as participating households listed as joint owners on the mortgage.
In addition to these eligibility
criteria, participants must also (1) sign an affidavit expressing their
commitment to occupy the property as their primary residence, and (2) agree to
create and execute a co-ownership agreement that specifies, at a minimum, the
proportion of ownership; how expenses and property maintenance are to be
handled; and agreed-upon options or procedures should one or more of the
participating households agree to move out or sell.
Types of Ownership & the Co-Ownership Agreement
One of the requirements of the Program is that participants agree to, and execute, a co-ownership agreement, and that a finalized, signed version of the agreement is received by the city prior to closing. The “Guide to Co-Purchasing” provides a detailed breakdown of the subjects that can (and should) be included in the co-ownership agreement, such as:
Looking at these recommendations for the co-ownership agreement, one can’t help but notice that many of the suggestions—designating common areas and private space, holding money in a common account for home expenses, and consequences for violations of the co-owner agreement—are some of the basic concepts found in condominium ownership. It is easy to understand why the Program would encourage co-owners to consider these factors, as they address many of the most significant issues that arise from common ownership. However, even if participants create an ownership agreement that contemplates all of the fundamental concepts of condominium ownership, common ownership of the kinds contemplated by the Program can still fall short.
Potential first-time homebuyers may
jump at the opportunity for co-ownership, excited by the prospect of owning a
home but not realizing how difficult common ownership is until real problems
come home to roost. For this reason, I don’t agree with the notion that a
condominium is not “the best option” for owner-occupied properties. For
example, both condominiums and traditional common ownership of multifamily
properties encounter the problem where one owner fails to contribute their
share to the common expenses, to the detriment of all other owners; however,
only a condominium has a mechanism to promptly address this delinquency and, if
necessary, foreclose on the unit to collect the unpaid expenses through the
statutory lien enforcement process set forth in G.L.
c. 183A, § 6.
The purpose of this article is not to take the blanket position that traditional common ownership is always ill-advised, but rather, to increase awareness of the potential drawbacks of common ownership outside the condominium form and to inform readers that homebuyers interested in the Program may wish to consider the benefits of forming a condominium after closing on a multifamily property.
Having said that, it is not entirely clear from the currently available resources on the Program whether participants can take advantage of the financial assistance offered by the Program if they transition from co-ownership to condominium ownership. The Program’s “Frequently Asked Questions” provide that co-purchasers who wish to form a condominium organization can do so “after the fact,” but does not go into detail about how or whether doing so would impact the financial assistance offered by the Program. For example, the zero-percent interest deferred loans offered by the Program are “repayable upon sale, transfer, or refinance.” Converting the property to condominium status would necessarily result in a change in ownership type, and require a transfer of the co-owners’ interest by Master Deed. To the extent that a loan granted pursuant to the Program would become repayable in this situation, it is a significant flaw that participants that could not benefit both from the financial assistance offered by the Program and the protections of condominium ownership. There are many reasons why co-purchasers may wish to create a condominium in order to benefit from certain protections that they would not have in a joint tenancy or tenancy-in-common, and it is troubling that the Program may create an ultimatum—if you want the protection of the condominium form, you can’t retain the benefits of your loan and financing.
Conclusion
Homebuyers considering the Program should be aware of the types of co-ownership that are allowed and consider the potential drawbacks of traditional co-ownership as compared to the protections afforded by condominium ownership. The fact that the Program resources appear to actively discourage ownership through the condominium form is indicative of a larger issue with the Program, which is that it apparently prioritizes the statistics of first-time homeownership at the expense of allowing for sustainable ownership structures.
As any homeowner will tell those of us who have never owned a home (I fall into the latter group), nothing prepares you for the unexpected surprises that come with owning a home for the first time. There are also unique, sometimes even more difficult surprises that come with co-owning a home. The condominium form of ownership is a unique thing, which exists as a hybrid form of property ownership—an option for people to own property in common as well as individually, protected from some of the difficulties of traditional common ownership. First-time homebuyers considering the Program should think ahead about the types of problems that may arise as a result of co-ownership, and consider how an alternative, such as transitioning to condominium ownership after closing, might be a better option for added protections down the road.
A member of REBA’s Condominium Law and
Practice Section, Bridget is an associate in the litigation and real estate departments of
the Quincy-based firm of Moriarty Bielan and Malloy LLC. Prior to joining MBM,
Bridget clerked for the Honorable Kevin T. Smith at the Land Court. She can be contacted at brose@mbmllc.com.
Ownership of real estate by religious organizations raises unique concerns for conveyancing attorneys. When insuring the title to property owned by a
In Massachusetts, a religious organization has the capacity to hold legal title to land for purposes consistent with its creation and existence. There are different types of religious organizations with unique requirements for each to convey or encumber property.
Roman
Catholic Church
The Roman Catholic Church has the authority to “receive, hold and manage all real and personal property belonging to such church; and may sell and convey the same.” By statute, the Roman Catholic Archbishop or Bishop of the diocese may associate with themselves two layman, which creates a body corporate and allows them to act as trustees. Pursuant to statute these trustees are then authorized to convey and encumber Church property.
Religious organizations which are
incorporated are one of two types: aggregate and sole. Most non-religious
corporations are of the aggregate type; a separate legal entity with powers
vested in various officers which change from time to time. In contrast, a
corporation sole consists of one person holding a particular title (and their
successors) who is incorporated by law to give certain legal capacities and
rights. The Roman Catholic Church is recognized as a corporation sole, rather
than a corporation aggregate (Akoury v.
Roman Catholic Archbishop of Bos., 18 Mass. L. Rep. 271 (2004). If the
church is structured as a corporation sole, the funds and real property will be
in the custody and control of the archdiocese or diocese. The Archbishop will
have the authority on behalf of the archdiocese to convey property owned by the
church.
United
Methodist Church and African Methodist Episcopal Church
Pursuant to paragraph 2501 in The Book of Discipline of The United Methodist Church, title to all local church property – real and personal, tangible and intangible – is held in trust for The United Methodist Church and subject to the provisions of the Book of Discipline. Every instrument of conveyance of real estate to the church shall contain the appropriate trust clause as set forth in paragraph 2503 in the Book of Discipline after the name of the grantee church, as follows; “In trust, that said premises shall be used, kept, and maintained as a place of divine worship of the United Methodist ministry and members of The United Methodist Church; subject to the Discipline, usage, and ministerial appointments of said Church as from time to time authorized and declared by the General Conference and by the annual conference within whose bounds the said premises are situated. This provision is solely for the benefit of the grantee, and the grantor reserves no right or interest in said premises.”
The trustees of a church, which is a member of the United Methodist Church, cannot lease, convey or mortgage property without the permission of the Annual Conference and the Charge Conference. A vote should be recorded evidencing the permission obtained and the authorized signatories.
Not all Methodist churches follow the Book
of Discipline. For example, the African Methodist Episcopal Zion Church
incorporates some Methodist beliefs, but is not governed by the Book of
Discipline. These churches may organize and become a corporation pursuant to
M.G.L. Ch. 67 §40. The trustees of a Methodist Episcopal Church, including the
African Methodist Church, have the authority to receive, hold, manage, sell and
convey real and personal property. A trustee’s power to convey is consistent
with the powers of a corporation, and may convey the legal title to the
property.
Orthodox Church
An unincorporated orthodox
church may apply to the appropriate hierarch, archbishop or bishop for
permission to incorporate under MGL Ch. 67 §55. Once permission
is granted in writing, it shall be filed along with the Certificate of Incorporation
with the Secretary of State. The Certificate of Incorporation will recite the
intent of the corporation and layout the authorized parties with authority to
convey real estate. Once the church is incorporated, the parties listed with
the Secretary of State have authority on behalf of the religious organization
to convey church property.
Unique Title Issues Involving Churches
An incorporated church can transfer title of church property, as authorized by the church’s governing body, by means of a deed identifying the church by its corporate name and is signed by the authorized parties listed with the Secretary of State’s office.
Title into to an unincorporated church (e.g., The Church of Conveyancers), may be questioned, as it is unclear who can sign on behalf of the association which can create unique issues. If insuring a conveyance out of an unincorporated church, court action may be required to determine the parties with authority to sell.
As an additional quirk, a conveyance of Methodist church-owned property requires a certified copy of the resolution of the Annual Conference of the church which sets forth approval of the sale, sales price, and empowerment of the trustees to execute and deliver the required documents and accept the proceeds from the sale.
A Co-chair of REBA’s
Residential Conveyancing Section, Katherine Prifti is Massachusetts State
Counsel for First American Title Insurance Company. Katherine
routinely collaborates on complex and substantial commercial transactions with First
American agents other external and internal clients. She can be contacted at kprifti@firstam.com.
Problem: The covenants of our association prohibit pets. An owner who moved in recently is blind and has a seeing-eye dog that she insists she
Solution:
This situation is not unusual, but can be problematic for boards, especially if
they do not understand what the law requires. The federal and state fair housing
laws require housing providers (including condominium associations) to provide “reasonable
accommodations” to residents with physical or emotional disabilities. In most cases,
that means the board must ease or waive covenants or rules for residents who
require accommodations to ensure that they have “full enjoyment” of their homes.
Boards that fail to approve legitimate accommodation requests risk being sued
for discrimination, which is no doubt what this owner is alleging.
Many boards reject
accommodation requests automatically, because the requests violate association
rules. They must look beyond the rules and understand that state and federal
requirements override them. Boards can’t
‘just say no’ if the fair housing laws require them to say yes.
There are many potential
minefields in this process. For
example, if the disability is obvious, as it would be if an owner is blind, the
board can’t require the owner to document the disability or ask any questions
about it.
Unlike physical
disabilities, emotional disabilities – such as anxiety and depression – aren’t
apparent and the board can require a letter from a “medical professional”
verifying that the owner has a disability that, in the words of the statute
“substantially [limits]” his/her ability to perform “one or more life functions.”
The letter does not have to identify the
disability or provide any details about it; it must simply verify that the
resident has a disability and that the requested accommodation will help the
owner cope with it.
Boards can’t question
whether an owner actually has a disability even if they have reason to doubt it
(you will never win that dispute); but they can suggest alternatives to the accommodation
an owner is requesting – a dog smaller than a Great Dane, for example, or a dog
or cat rather than the alligator, snake or kangaroo the owner has requested as
an “emotional support” pet. However, while
boards can suggest alternatives, residents aren’t required to accept them. As a practical matter, boards will usually have
to approve the animals residents demand if medical professionals agree the
animal is necessary.
Boards can impose some reasonable restrictions. For example, boards can require residents to:
·
Care for their animals and clean up after
them;
·
Ensure no nuisance is created;
·
Remove an animal that harms, threatens or
disturbs other residents;
When association clients seek
advice in dealing with an accommodation request (which they should do before
becoming embroiled in a dispute over it), we usually advise them not to fight
if that can be avoided. The courts and
the MCAD almost always side with the owners seeking accommodations and against
the associations that want to deny them.
Given that they are unlikely to win these disputes, boards should do
what they can to avoid them.
1.
Establish written procedures for handling
accommodation requests and follow them.
2.
Consider requests seriously and handle
them respectfully.
3. Respond
quickly to accommodation requests. Aim
to acknowledge the complaint and initiate the review process within 10 days or
less. Boards are required to negotiate in
good faith. Delays in responding to
requests or issuing decisions will suggest that they are not.
4. Even
if you suspect that an accommodation request is bogus – a pretext for obtaining
a pet in a community that prohibits them, for example -- treat it seriously.
Avoid disparaging comments, such as “We know you’re not really disabled,” that
could be cited as evidence supporting a discrimination complaint.
5. Don’t
assume that approving an animal as an accommodation for a disabled resident
will require you to approve pets for all owners who demand them. Boards must waive rules only if residents
qualify for Fair Housing accommodations.
6. Before
deciding to fight an accommodation request, consider:
· The
litigation costs, which will almost certainly exceed by orders of magnitude the
cost of the accommodation the owner is requesting. While insurance may pay your
legal fees, it won’t pay for the damages and attorneys’ fees awarded if you
lose.
· The
negative publicity and lingering ill will that are the unavoidable and harmful
byproducts of discrimination suits, which can be as costly in a different way
as the litigation.
7.
Instead of putting your
foot down, which many boards do reflexively, put yourself in the shoes of the
person requesting the accommodation. If you or a family member were blind,
would you think a request for a guide dog or a parking space located closer to
your unit was unreasonable and should be denied?
A
partner in the Braintree firm of Marcus Errico Emmer & Brooks P.C. Dawn
concentrates her practice on commercial litigation, construction
litigation and employment law. She can be contacted at dmcdonald@meeb.com