By Edward J. Smith
Since
1973 conveyancers and their client developers and lenders have rued the
enactment of M.G.L. c. 40, § 54A. That statute has required written consent,
A mentor to generations of REBA members,
Henry was also a fan of railroads, and a student of their history. He told me that the statute was passed in the
wake of the financial collapse of major railroads in the northeast in the 1960’s. The decade saw many
railroads in financial trouble as well as a number of mergers. This culminated in the collapse in 1970 of
the newly created Penn Central Railroad giant. Realizing the severity of
the situation, the Federal government established the Consolidated Rail
Corporation, which comprised the skeletons of several bankrupt Northeastern
carriers, to begin operations in 1976. With Federal backing, Conrail began to
slowly pull out of the red ink, and by the late 1980s was a profitable railroad
after thousands of miles of excess trackage were abandoned or upgraded. Also, Amtrak was created to organize a
chaotic system from the remnants of the private freight railroads' passenger
operations.
Henry said that chapter 40, sec. 54A was
one of two statutes, the other one being M.G.L. c. 161C, sec.7, that
were intended to preserve rights of way
for future transportation needs. Under
chapter 161C, sec.7 the Massachusetts Department of Transportation (MassDOT),
or its designee, has a right of first refusal if any
railroad company wishes to sell, transfer or otherwise dispose of railroad
rights-of-way or related facilities to another party. This right of first refusal is clear and
easily understood by conveyancers.
On the other hand, chapter 40, sec.
54A was improvidently drafted. Under its
terms it applies to any lands formerly used as a
railroad right-of-way, and any
property appurtenant thereto, if ever used by any railroad company in the
commonwealth. Henry said that
this language could encompass property and
facilities not within, or even in proximity to, the right of way. From his knowledge of history he knew that in
Woburn there are former woodlots that belonged to the Boston and Lowell
Railroad in the days when locomotives burned wood. These lots were sold in the 1860’s, but they
are still technically subject to the statute.
During a 50-year title search, even assuming a recorded plan shows the
former right of way, how would the examiner know if other property was
appurtenant to a right of way?
It would
not be ascertainable from the record whether the Commonwealth, during any
particular administration, might at some point intend to utilize affected land
for future transit purposes. Henry asked
whether the statute was intended to apply to the vast acreage of former railroad
yards in South Boston, Somerville, West Cambridge, Worcester, Greenfield, to
name just a few cities where land is so affected. Of course, the customary 50-year title search
generally would not identify railroad land deeded out during the Depression or
earlier. I think Henry would appreciate
my use here of the metaphor “phantom ghost train” to refer to a fact that may
be unknowable despite a diligent title search.
The
statute would apply each time a property turned over to another potential
owner. If MassDOT declines to consent to
the issuance of a building permit, the statute reserves the land owner’s right
to be compensated, provided he purchased the land prior to January 1,
1976. If he purchased after that date,
the owner may be out of luck. A
constitutional challenge alleging an unlawful taking of property may follow,
although it is not clear that it would be successful. That may be the only recourse for the owner,
since the Supreme Judicial Court held that the statute imposes a “restriction
on the use of the property, but it does not affect the owner's title to the
property. . . .” Even if a title insurance policy fails to take exception for
the statute, the existence of this restriction, therefore, does not give rise
to coverage under the policy. Somerset Savings Bank vs. Chicago Title Insurance Company,
420 Mass. 422 (1995.)
Henry Thayer
wanted a hard statute of limitations (50 years made sense to him) to limit the
arbitrary effect of the statute. He also
wanted to get rid of the “property appurtenant
thereto” clause. To that end,
REBA filed and supported legislation for several years. I recall getting it through the House one
year, but failing in the Senate. Another
year the Senate passed it, but the House did not. Other REBA leaders, including former
presidents Steve Edwards and Greg Peterson, joined in the advocacy.
In recent years, REBA joined with NAIOP,
the premier commercial and industrial real estate trade association, to support
passage of legislation. Representative
Joseph F. Wagner (D-Chicopee), House Chairman of the Joint Committee on
Economic Development, filed NAIOP’s bill.
Paula Devereaux, REBA’s current president-elect, was part of a team,
coordinated by NAIOP Senior Vice President for Government
Affairs Tamara Small, who met
with senior staff at MassDOT to negotiate a final bill that we could jointly recommend
to the General Court and Governor Baker.
Representative Wagner and
his Committee’s Senate Chairman, Senator Eric P. Lesser (D-Longmeadow),
recommended the legislation in an omnibus bill that was passed at the end of
formal sessions in July. Also supporting
the legislation were the co-chairs of the Joint Committee on Transportation, Senator
Joseph A. Boncore (D-Winthrop) and Representative William M. Straus
(D-Mattapoisett).
On Friday August 10, 2018 the
legislation was approved, with an Emergency Preamble, by Governor Charles D.
Baker. St. 2018, c. 228, § 10.
We were unable to get the hard statute
of limitations, but the new act clarifies the former statute so that land that
was not used as a railroad right of way would be excluded from its
terms. The clause that refers to other
property “appurtenant thereto” was eliminated.
The act retains the required consent by MassDOT to issuance of a
building permit on former railroad land, and gives MassDOT new discretion to
determine when a public hearing is required. REBA looks forward to the
promulgation of regulatory guidance in that regard.
Ed
Smith has served as legislative counsel to the Association since 1987. He can be contacted by email at ejs@ejsmithrelaw.com.
