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Wednesday, April 18, 2018

My Take on the SJC’s Queler vs.Skowron Decision


By Saul J. Feldman

The SJC in Queler, 438 Mass 304 (2002), concluded that the declarant of a phased condominium development may reserve in the master deed an interest in property that is submitted to the
provisions of the Massachusetts Condominium Statute, such that the designated property will revert in the declarant if a specific condition occurs.

The SJC recognized that under common law a property owner has the right to impose limitations or conditions on an estate that is conveyed to another, such that the conveyance is not one of fee simple absolute. The SJC further concluded that the declarant’s retention of a defeasible fee is not inconsistent with Chapter 183A.

Referring to a 1986 decision, Tosney v. Chelmsford Village Condominium Association, the SJC stated that those matters that are not specifically addressed in the statute are to be worked out by the involved parties.

Once Phase 1 is completed, the subsequent phases can be added to the condominium without any structures on these phases. This is based on several cases, in the Tosney case the court ruled that Chapter 183A is an enabling statute; what is not specifically prohibited is allowed. In the Queler case, the analysis is based on a fee simple interest, with a reversion which would allow the subsequent phases to consist of just land without any structure. There is not any need for a construction trailer or any structure on the subsequent phases. This would not be a land-only condominium, because Phase 1 would have one or more buildings on it.

An example would be the Blackrock Condominium, a mixed-use condominium for which I drafted the condominium documents. Phase 1 is the golf course and the remaining land is the residential component. As Phase 1, the golf course and its clubhouse are already in the condominium, when the time comes to start bringing in the residential phases, this is clearly not a land-only condominium because Phase 1, the golf unit, already has a building.

Finally, my take on Queler is perhaps best expressed in the earlier 1995 case of Podell v. Zahn.  The court in Podell stated that phasing grew out of the general enabling provisions of Chapter 183A and that phasing permits a developer to expand the project in response to market conditions. A bank would not be willing to lend $5,000,000 up front but would be willing to lend $1,000,000 upfront and the remaining $4,000,000 in tranches, as long as the market justifies the additional phases. For example, each tranche could be for $1,000,000. See Massachusetts Condominium Law (MCLE, Inc. 3rd ed. 2015 & Supp. 2017). The SJC in Podell noted that successive phases are added by successive phasing amendments to the master deed.
           
Queler is important for the following reasons:
1)      If the declarant wants to remove land, the master deed should expressly state that the declarant submits a fee-simple determinable, not a fee-simple absolute, and the removal procedure should rely on the common law defeasible fee.

2)      The case of Levy v. Reardon was expressly overruled by Queler. Most practitioners believed that the Levy case was a mistake and found comfort in the fact that Queler overruled Levy.

3)      In Queler, the SJC returns to its flexibility posture, allowing problems to be sorted out by conveyancing attorneys.
There have been periods of time when I believed that Chapter 183A should be replaced by a second-generation statute modelled after the Uniform Condominium Act or a third-generation statute modelled after the Uniform Common Interest Ownership Act. There have also periods of time when I believed it would be best to leave things the way they are, given the large body of case law which now interprets Chapter 183A. The case law along with Chapter 183A works very well.

As I move into the retirement phase of my life, I still have not made up my mind. If I wake up in the middle of the night with the answer, I will write another article to share my conclusion with you!
           
A longtime member of REBA, Saul Feldman recently retired after practicing law for almost 50 years.  REBA News wishes him a long, healthy and content retirement. Saul can be contacted by email at saul@feldmanrelaw.com.

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