Thursday, June 9, 2016

VACATION CONDOMINIUMS: LEGAL AND MANAGEMENT ISSUES


During summer, we think of vacations.  Often this means a resort or a second home condominium.  There are many concerns in buying a vacation condominium.  The usual concerns involve pools, parking, and pets.  Noise is also an issue, given the sometimes close proximity of the units. 

There are other issues as well, such as the right to lease your unit.  Many of the units in a vacation condominium are often owned by absentee landlords and rented out on a weekly, monthly, or seasonal basis.  The rules and regulations for the condominium must be drafted to take this into account.  Tensions often exist between renters and owners, and between couples with children and couples without children.

Some vacation condominiums contain mixed uses.  There can be tensions, for example, between homeowners and an on site restaurant involving odors, noise, and allocation of expenses.  There can also be tensions in a golfing condominium, between the owner of the golf course and the residential owners, where the ownership of the golf course is separate from the ownership of the residences.  These tensions include noise during golf tournaments and allocation of expenses between the owner of the golf course and all of the owners of residential units.

Where a vacation condominium is both commercial and residential, in an attempt to reduce the tensions between commercial and residential owners, often a rules committee is created by the owners.  One of the functions of the rules committee can be to make rules and regulations regarding signage.  This is necessary to prevent the owner of the restaurant unit from installing signs that are bothersome to the owners in the adjacent cottages.

Given the popularity of golf in the 1980s and 1990s, many condominiums were created consisting of residential units and a golf course as a unit and the main amenity.

Another common vacation condominium would be in a beach community.  In a beach community, I should note that vacation condominiums were a subject of a case involving a “cottage colony” in the Town of Dennis on Cape Cod.  The case is Goldman v. Dennis, 375 Mass. 197 (1978).  The Goldman case upheld a town by-law that regulated the conversion of certain types of buildings to the condominium form of ownership.

I have never liked the Goldman case.  A condominium is a form of ownership.  It is not a form of land use.

The court in the Goldman case decided that there are some situations where a municipality may regulate a condominium conversion if the conversion will intensify the use of the property.

The issue of a vacation condominium is complicated by a condominium statute (Chapter 183A) that provides no guidance to the owners of vacation or seasonal condominiums.

I should mention that there are boat dock condominiums, often in vacation areas such as Cape Cod.  Also, there are hotel condominiums which consist of one unit being a hotel and the remaining units being residential vacation units.  The condominium form of ownership has been used to create some interesting vacation condominium projects.

Massachusetts does have a separate statute covering timeshares, but this statute does not apply to a vacation condominium unless a portion of it has been made into a timeshare pursuant to the timeshare statute (Chapter 183B).

One difference between a vacation condominium and other condominiums is that the board of trustees meets less often, and, when they do meet, they often meet by a telephone conference call.  The condominium documents for a vacation condominium must allow for meeting by a telephone conference call, as the Trustees may spend most of the year far away from their vacation condominiums.

Finally, it is essential that the condominium be managed by a management company that has experience with vacation condominiums.  There are rental agreements with residents, move in and move out issues, and many other matters that require a management company with expertise in managing vacation condominiums.

A management company may also have to deal with workouts involving a troubled or failed vacation condominium development, run-away expenses, bank loans to the vacation condominium association, and litigation against unit owners who are often out of state.

In any event, your resort or second home condominium will in all likelihood have its share of legal issues.
 
Saul J. Feldman
Feldman Law Office, P.C.
www.feldmanrelaw.com

 

Tuesday, May 31, 2016

Commercial Use of Residential Land Assisted by the Internet.


I was in the Outer Banks a few weeks ago and became curious with the ever increasing mass of some of the houses being constructed along the beach in Kill Devil Hills. It was not that long ago that many of the homes along the beach were simple cottages. Now, some homes are being constructed with 24 bedrooms and 28 bathrooms. The local government is concerned that the homes are really hotels in disguise, but in a town that depends on tourism there is apparently some hesitancy to regulate the buildings.

The trip to Kill Devil Hills made me think of the 2012 case in Truro where a developer had constructed some large beach front homes in a residential neighborhood and had advertised rental of the homes for use for weddings and other large events. It became incumbent upon the neighbors to seek enforcement of the zoning bylaw in Land Court. The process started in 2007 when neighbors complained to the Building Commissioner about the large buses traveling through the neighborhood and the loud music. Five years later, Judge Piper determined that the ZBA was correct when it determined that the activity was an unlawful commercial use in a residential zone. DiGiovanni v. Pope, No. 08 MISC 380468 GHP, 2012 WL 259977 (Mass. Land Ct. Jan. 30, 2012).

This past weekend I was reminded of Kill Devil Hills and Truro when I read that a man had been shot at a house party in Lynnfield.  It was reported that the owner said he used the websites  FlipKey, Airbnb, and HomeAway to regularly rent out his house for corporate retreats, family reunions and other gatherings.  He was quoted as saying that he will continue to rent his house.

Something tells me that running a commercial enterprise in a residential neighborhood in Lynnfield is not a permitted use; as it was not a permitted use in Truro. Unfortunately the internet lets such cottage industries (pun intended) run under the radar until something terrible happens.  Perhaps cities and towns need to modernize their bylaws to clearly regulate cyber abuse of residential property.

Paul F. Alphen, Esquire

Alphen & Santos, P.C.

Westford, MA

Wednesday, May 25, 2016

Open Meeting of the Environmental Law Committee on May 24, 2016 Video

 
Open Meeting of the Environmental Law Committee on May 24, 2016
 
Funding Brownfield Redevelopment: Redeveloping the Worcester Telegram & Gazette Site
 
Roberta Brien (Worcester Business Development Corporation)
David Foss (Wilcox & Barton)
 
PowerPoint and Audio Only
 
 

Tuesday, April 19, 2016

Life Estate: A Property Interest or a Trust Interest?

 
 
REBA Estate Planning, Trusts & Estate Administration Committee
Life Estate: A Property Interest or a Trust Interest?
A. Miriam Jaffe, Esq.
Leo J. Cushing, Esq.,
April 14, 2016
 
 
 

Monday, April 11, 2016

REBA ENDORSES PRIVATE WAYS LEGISLATION


MEMBERS URGED TO CONTACT LEGISLATORS

If either you or a client owns a vacation home or other land in a private subdivision, you will want to be aware of legislation before the Massachusetts legislature that would enact a workable procedure better to insure the continuing maintenance of private ways and other common amenities.  If no HOA (Homeowners Association) has been established, what will you tell your lender client who advises that, for a Fannie Mae conforming loan, a house on a private way must have a recorded “private way agreement” to insure that the way will be maintained?  If your client is concerned for how to insure that financial responsibility for these expenses will be shared by those who benefit from use of the way, Senate Bill 1113 may have the answer. 
  
Many roads and other private amenities, such as bridges or common beaches and recreational areas, are privately owned. Therefore, the municipality is not required to provide maintenance or upkeep of these common amenities, which may be at risk of falling into serious disrepair.  This is especially problematic without an established owners’ association or other method for raising the necessary sums for maintenance and upkeep.  The existing provisions of M.G.L. c. 84, §§ 12-14, first enacted in 1787 and essentially unchanged since then, provide a procedure to call a meeting of proprietors and rightful occupants of a private way or bridge.  Those provisions include a cumbersome process for calling such a meeting, limit the parties entitled to call a meeting, and provide little guidance in terms of assessing and collecting maintenance costs. 
 
 
REBA Practice Standard No. 26, Land Subject to a Non-Statutory Obligation to Pay Assessments, recommends in such situations that the conveyancer obtain written documentation that all outstanding assessments have been paid through the date of conveyance.  However, such assessments are not enforceable as a lien since there is no statutory authority for it.  That there may exist an equitable servitude based upon an implied in fact contract may be of little comfort to your client. There is no obligation to record an instrument evidencing payment of assessments, and certain Registries may not even accept such an instrument for recording. 
 
Senate Bill 1113, in lieu of requiring a warrant from a district court or town clerk or from a justice of the peace to call a meeting of property owners as in the current statute, instead allows such a meeting to be called by mailed notice together with publication in a local newspaper in accordance with other modern statutory notice provisions.  The bill also expands the universe of property owners entitled to call a meeting to include not only those who own the common amenity, as in the existing statute, but also to include other property owners who have the benefit of using the common amenity.  This serves to include in the maintenance and repair process all affected property owners and not simply those who have an ownership interest in the common road, bridge or other amenity by virtue of owning property immediately adjacent thereto.  In addition, the proposed bill expands the scope of common amenities covered by the statute to include not only private ways and bridges but also other common amenities requiring shared maintenance, such as private parks, buildings, recreational facilities, beaches and the like and privately owned utility lines.  The bill provides the necessary framework for the property owners to form an owners’ association where none currently exists, and to make assessments for maintenance and repair costs.  If such an association has been created by a recorded instrument, its provisions continue to apply.
 
REBA’s Legislation Committee, chaired by Fran Nolan and Doug Troyer, has recommended certain perfecting additions to Senate Bill 1113, including to allow an HOA to lien the property of owners that fail to pay their allocable share of maintenance and repair costs similar to that provided for a condominium association for unpaid common charges under M.G.L. c. 183A, and to provide a parallel to the 6(d) certificate.  Primary drafting of the REBA-recommended text came from committee members Lisa Delaney, Marty Loria, Dan Ossoff and Doug Troyer. A copy of the REBA-recommended changes is at:
Senate Bill 1113, co-sponsored by Senator Daniel A. Wolf (D-Harwich) and Representatives Thomas J. Calter (D-Kingston) and Brian R. Mannal (D-Barnstable), follows the framework of legislation originally sponsored in past years by retired Representative Cleon H. Turner (D-Dennis). Three other bills, with bipartisan sponsorship, have similar provisions.  S.1113 has been recommended by the Joint Committee on Municipalities and Regional Government.   
 
The bill seeks to be fair to property owners, recognizing that those who use the roads and amenities are the logical parties to pay for their upkeep.  If you support these improvements in the statute, please let your State Senator and State Representative know as soon as possible.  Formal sessions end this year on July 31, 2016.  Contact information is available at https://malegislature.gov/People/Search. 
 
REBA Legislation Committee
Click here to visit the REBA Legislation Committee Page

Thursday, March 10, 2016

SENATE 122 IS NOT AS SIMPLE AS IT MAY FIRST APPEAR


Senate No. 122  is entitled: “An Act promoting the planning and development of sustainable communities”.   The Bill intends to make major changes to MGL Chapter 40A and the Subdivision Control Law. There are many facets to the Bill, but for simplicity’s sake I will focus on one example to illustrate that the Bill is not as innocuous as it may first appear.

Sections 10, 11 and 12 of the Bill, if read in a vacuum, may appear to be harmless. However, the changes proposed therein will harm landowners and slow economic development in the Commonwealth. One purpose of the proposed amendment is to eliminate the use of Subdivision Plan filings to create a temporary zoning freeze on a parcel of land. The proposed changes would only freeze the particular layout of lots shown on a plan filed with the Planning Board from subsequent changes in the zoning bylaw. The goals espoused by the supporters of the Bill are contrary to the fundamental fairness principals articulated by the Massachusetts Courts for decades.  The courts have consistently ruled that landowners have the right to know in advance of the permitting process the details of the land use regulations that will apply to their land. Keep in mind that developers typically do not purchase land until all permits are granted; and the landowners get nothing, or next to nothing, if the projects are not approved. Meanwhile, the developers are required to prepare and submit mountains of expensive engineering data and plans to cities or towns to meet the ever-increasing regulatory requirements for submissions. If developers face the risk that their efforts can be thwarted by a zoning change half way through the project engineering or permitting process, they are unlikely to take the risks in the first place.

The language that the Bill aims to eliminate is exactly the language that the Supreme Judicial Court has identified as crucial to the creation of a level playing field:

“We have opined that the intent of the statute was to protect landowners and developers ‘from ‘the practice in some communities of adopting onerous amendments to the zoning by-law after submission of a preliminary plan which is opposed by segments within the community.’”   Massachusetts Broken Stone Co. v. Town of Weston, 430 Mass. 637, 640-41, 723 N.E.2d 7, 9-10 (2000)

I have had the unfortunate experience of having town meetings change zoning bylaws midway through the permitting process. The towns around me commonly amend zoning bylaws twice a year. There has to be a way to freeze the zoning bylaw while an applicant is engaged in the permitting process. Otherwise it is like travelling 65 MPH on the Mass Pike and then getting pulled over and having your car confiscated and being told that the speed limit and the penalties were changed during the time you drove from Allston to Weston.

Landowners and builders need a way to lock in the rules while they generate engineering and plans, and wind their way through the permitting gauntlet. At the point at which the engineers are drawing up plans, everyone from brokers to backhoe operator have knowledge of the proposal (not to mention the relatives of the sellers, brokers and backhoe operators). Word gets around town very quickly, and it would be easy for opponents to gather 10 signatures and get a rezoning article on a town meeting warrant before the application is submitted or the project approved. And freezing the “plan” provides insufficient protection to the landowners and builders as (a) the final plan ultimately approved by the boards can be significantly different that the original plan submitted and (b) as stated above, once engineered plans are ready for submission word has leaked about the proposal and the opposition can become organized.

The above is but one example of how Senate 122 is not as simple as it may first appear. Please read the Bill, and if you have similar concerns, perhaps you can express same to your Senator.  

Paul F. Alphen, Esquire

Alphen & Santos, P.C.

Westford, MA

Wednesday, August 26, 2015

APPEALS COURT DECISION EMPOWERS SPECIAL PERMIT GRANTING AUTHORITIES WITH THE ABILITY TO DENY PERMITS ON SUBJECTIVE GROUNDS

In 2007 the applicant/Plaintiff Buccaneer Development, Inc applied for a special permit to build a “retirement community,” the minimum requirements for which are set forth in § 9.6 of the Town of Lenox by-law. The proposed project satisfied all of the special provisions set forth in that section. And the Appeals Court agreed with the trial judge's conclusion that “the density of the proposed project is well within the requirements of Section 9.6,” and that the board had no basis to deny the special permit under the square footage, acreage, frontage, or setback provisions included in that section. Buccaneer Dev., Inc. v. Zoning Bd. of Appeals of Lenox, No. 14-P-855, 2015 WL 4725043, at *2 (Mass. App. Ct. Aug. 11, 2015)
Nevertheless, the Appeals Court on August 11, 2015 upheld the Land Court’s decision that the denial by the Lenox Zoning Board was erroneous.
The Appeals Court stated that the Board’s decision can only be disturbed if it was unreasonable, whimsical, capricious or arbitrary.
“However, ‘[e]ven if the record reveals that a desired special permit could lawfully be granted by the board because the applicant's evidence satisfied the statutory and regulatory criteria, the board retains discretionary authority to deny the permit.’ Davis v. Zoning Bd. of Chatham, 52 Mass.App.Ct. 349, 355, 754 N.E.2d 101 (2001). ‘[T]he decision of the board can only be disturbed ‘if it is based ‘on a legally untenable ground’ ... or is ‘unreasonable, whimsical, capricious or arbitrary.’  Subaru of New England, Inc. v. Board of Appeals of Canton, 8 Mass.App.Ct. 483, 486, 395 N.E.2d 880 (1979), quoting from Gulf Oil Corp. v. Board of Appeals of Framingham, 355 Mass. 275, 277, 244 N.E.2d 311 (1969).” Buccaneer Dev., Inc. v. Zoning Bd. of Appeals of Lenox, No. 14-P-855, 2015 WL 4725043, at *2 (Mass. App. Ct. Aug. 11, 2015)
The Court determined that the denial based on broad subjective grounds was within the Board’s authority.

“Nonetheless, the three other criteria in § 6.1.1 of the by-law specifically require the board to consider more subjective factors and not to grant a special permit unless it finds that the proposed use ‘(a) [i]s ... in harmony with [the by-law's] general intent and purpose; (b) [i]s essential or desirable to the public conveniences or welfare at the proposed location; [and] (c) [w]ill not be detrimental to adjacent uses or to the established or future character of the neighborhood.’ The board's denial of the special permit was firmly grounded in its assessment that the proposed use failed to meet these criteria……’[P]articularly where the judge conducted a view,’ we are reluctant to disturb her findings. Bernier v. Fredette, 85 Mass.App.Ct. 265, 275, 8 N.E.3d 769 (2014).” Buccaneer Dev., Inc. v. Zoning Bd. of Appeals of Lenox, No. 14-P-855, 2015 WL 4725043, at *3 (Mass. App. Ct. Aug. 11, 2015) 

The decision gives greater authority to special permit granting authorities to deny permits even when the applicant has met the objective requirements. Again, as usual, note that the process took over eight years to reach this point.

Paul F. Alphen, Esquire

Alphen & Santos, P.C.

Westford, MA