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Thursday, March 2, 2017

REBA SUPPORTS “PRIVATE WAYS” BILL


Daniel J. Ossoff
The fact patterns are familiar to many of us.  The client owns a property to which access is available  The private way has fallen into disrepair.  Although several of the owners are prepared to contribute their share of the cost of making the necessary repairs to the private way, other owners are not so forthcoming.  The distressed owners, who are unable to raise the funds necessary to repair the way from the full roster of owners who use the way, turn to the town for assistance.  The municipality, which is struggling to find the necessary funds to maintain and repair the public ways under its jurisdiction, responds to the disappointed property owners that the private way on which they reside is not the town’s responsibility.  The town officials suggest that the owners look to their homeowners association documents to enforce the obligations of all the owners to pay their fair share of the costs of maintaining and repairing the private way.  Alas, no such association was created at the time the private way came into existence, and no association binding on all the property owners can be formed without the cooperation of one hundred percent of the property owners using the private way.  Of course, there is little or no chance that the troublesome owners who are not willing to pay their share of the costs of maintenance and repair of the way will cooperate in the creation of a homeowners association that could compel them to pay up.  So the owners who are willing to “do the right thing” are stymied in their efforts to get the private way repaired.
by means of a shared private way serving a dozen separate properties.
Similar scenarios arise in connection with private bridges or other appurtenances to private ways, privately owned water, sewer or other utility lines, and privately owned beaches, parks or other recreational facilities.  In each case, in the absence of an established owners association or maintenance process, it is often an insurmountable task to keep such bridges, utilities or other common amenities and appurtenances in good condition and repair.  Nor are these problems limited to residential subdivisions.  Similar issues can arise in office and industrial parks which were created without the establishment of associations charged to maintain the roadways, utilities and other park infrastructure. Meanwhile, the headaches of these property owners more often than not also become the headaches of the municipality charged with assuring that safe access is available to all properties for the provision of emergency services.
The only statutory mechanism that is available to assist property owners seeking to insure the maintenance of private ways can be found in the seldom-used provisions of M.G.L. Chapter 84, Sections 12, 13 and 14.  Those statutory provisions provide a procedure by which the proprietors and rightful occupants of a private way or bridge may make application to a clerk of the district court or the clerk of the city or town or to a justice of the peace to issue a warrant for a proprietors’ meeting at which a surveyor can be appointed to oversee the maintenance and repair of the private way or bridge.  Of course, the process for causing such a meeting to be held is cumbersome, and the concept of appointing a surveyor to oversee the private roadways strikes the modern day practitioner as particularly archaic.  The statute also provides little guidance as to how maintenance costs are to be assessed and collected or how owners are to work together to cause the maintenance to be performed and the assessments collected.  Needless to say, these existing statutory provisions have proved to be of little use in current times to address the problem of assuring that private ways, bridges and other common amenities are properly maintained.
A bill sponsored by REBA, S 1910, entitled “An Act relative to the maintenance of private ways, bridges and common amenities in municipalities” is an effort to replace Chapter 84, Sections 12 through 14 with a more modern framework by which maintenance processes can be established and common associations formed to insure the ongoing maintenance, not only of private ways and bridges, but also of private utility lines, recreational areas, or other common facilities and amenities.  Building off the procedures in the existing statutory provisions, where four or more property owners have the right to use a private way, bridge or other common amenity, the bill provides a mechanism for any three of those property owners to call a meeting for the purpose of establishing a maintenance process for the private way, bridge or amenity.  The meeting may also be called for the purpose of establishing a common association that will oversee that maintenance process.  In deference to small subdivisions or office or industrial parks where the formality of an owner’s association may not be necessary, the bill allows but does not require a common association to be formed in order to establish a maintenance regime for the private ways or other amenities.  The bill not only addresses the creation of new maintenance procedures and common associations, but also provides mechanisms to revive and amend existing procedures and associations which may have not been used in years or which are in need of being modernized and revised to meet the current needs of the property owners.
In order to avoid the present situation in which unanimous consent is required to establish a maintenance process or common association for existing private ways, bridges or other common amenities where none currently exists, the bill provides for the adoption of a maintenance process or common association by vote of a majority of the property owners attending a meeting called for that purpose. Notice of that initial meeting is given by mailing by certified and first class mail a copy of the notice to each owner at its address appearing in the records of the tax assessor and by publishing the notice in a newspaper with general circulation in the municipality.  Both the mailed notice and published notice are to be accomplished not less than 14 days prior to the meeting.  No longer will it be necessary to make application to the clerk of the district court or the municipality or to a justice of the peace to issue a warrant for a meeting of the owners having the right to use the private way.
Senate Bill 1910 is enabling in nature, allowing the owners to devise a maintenance process or structure an owner’s association as necessary to meet the needs of their particular situation, without prescribing exactly what elements are to be included in either.  However, upon the establishment of a maintenance process and/or a common association, the bill requires certain basic information identifying the same to be recorded at the registry of deeds or the registry district of the Land Court, including the identity of the affected property owners and a description of the private ways, bridges or other common amenities that are the subject of the maintenance process or the common association.  Where a common association is formed, the names of the members of the board of the association must also be placed on record (as well as any future changes to the board).  All of this is intended to assure that this information is available to title examiners, conveyancing attorneys and new owners and lenders looking to acquire or finance a property that is subject to a maintenance process or part of an owner’s association.
The bill also formalizes the process of establishing a lien for unpaid common expenses, similar, in many ways, to the process that is available to condominium associations for unpaid common area charges. Importantly, in order to take advantage of the lien provisions in the bill, a formal common association is required to be formed to oversee the enforcement of those lien provisions.  The bill also provides for a member of the board of the association to be able to execute and deliver a certificate confirming that all common charges assessed to a particular property have been paid, so that the certificate will be available to be recorded in order to pass clear title to the property in the event of a sale or refinancing.  For the purpose of allowing for foreclosure of the lien, the bill amends the provisions of M.G.L. Chapter 254 to establish a foreclosure mechanism which again parallels the mechanism that is available in the context of unpaid condominium common area charges.
A subcommittee of REBA’s Legislation Section has spent a significant amount of time revising and refining the bill.  It is the view of the members of that subcommittee that the bill, if enacted, would be of significant assistance to property owners faced with assuring that private ways and other common amenities are maintained, and assuring, also, that all owners benefitting from the use of such ways and amenities will pay their fair share. REBA strongly supports the passage of this bill. 

The chief sponsor of the legislation is new Senator Julian Cyr (D - Cape and Islands).  Co-sponsors include new Senator Adam G. Hinds (D – Berkshire, Hampshire, Franklin and Hampden), and House sponsors Representative Sarah K. Peake (D - 4th Barnstable), Representative Keiko M. Orrall (R - 12th Bristol) and Representative Mathew Muratore (R - 1st Plymouth.)

Principal draftsman of REBA’s private ways legislation, Dan Ossoff chairs the real estate department at Rackemann, Sawyer & Brewster, P.C.    His practice concentrates on all aspects of commercial real estate development and finance with an emphasis on land acquisition and disposition, leasing, title and land use planning matters. Dan’s email address is dossoff@rackemann.com.

 

 

 

 

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