Monday, August 15, 2016

VACATION CONDOMINIUMS: LEGAL AND MANAGEMENT ISSUES


Saul J. Feldman, Esq.

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 Feldman is a member of the Condominium Law and Practice Committee. He can be contacted by email at mail@feldmanrelaw.com.

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