David M. Rogers
Discretionary
decisions of a condominium board are often afforded protection under
either a reasonableness standard or the business judgment rule. In brief,
a board’s decisions will be
preserved if they were made in good faith and for the benefit of the
association. However, these protections
are not absolute and, as evidenced by a recent decision from the Land Court,
arbitrary, inconsistent, and unsupported decisions will not be upheld when subjected
to a judge’s scrutiny.
In a February decision, the Land
Court found that where a condominium board denied a unit owner’s request for
permission to wall up an exterior entrance to her unit at her expense, the
board failed to act in good faith and in the exercise of its honest judgment in
the lawful and legitimate furtherance of the condominium’s purposes. Feldman v. Sanctuary Condominium
Association (Land Court; 24 MISC 000298).
Judge Vhay found that no legal standard supported the condominium
board’s denial of the unit owner’s request and, as such, the board’s decision
could not be upheld.
Constructed in 1988, the Sanctuary
Condominium is a community located in Salem and consists of 172 attached
townhomes. Debra Feldman purchased a
unit while the project was being constructed.
During construction, she noted that the unit she was purchasing – unlike
the other homes within the community – had an exterior entrance located at the
corner of the home’s kitchen. Ms.
Feldman asked the developer’s principal, Howard Farfard, to remove and close
the kitchen exit. Mr. Farfard, who was
also one of the initial board members at the condominium, told Ms. Feldman that
he would not close the exit, but that she could seek the board’s permission to
close the opening, at her expense, and that the board would approve such a
request.
Ms. Feldman closed on the purchase
of her unit in May of 1987. Thereafter,
she tried several times to obtain the board’s permission to wall up the kitchen
entrance. Indeed, her first request for
the board’s approval of the entrance closing came within a year of buying her
unit. This request, as well as several
others, were rejected by the board. Finally,
in May of 2024, Ms. Feldman – representing herself as a pro se plaintiff
– sued the association over the issue.
The matter was tried before the Land Court over two days in late
2025. The case involved a determination
of whether the Board acted improperly under Section 9(b) of the condominium’s
master deed, which provides, in pertinent part, as follows:
Use of the
Units. Unless permitted
otherwise by instrument in writing duly executed in accordance with the By-Laws
of the [Sanctuary Condominium] Trust [the “Trust”]:
…
(b) The architectural
and structural integrity of the Buildings and Units shall be preserved without
modification, and to that end, without limiting the generality of the
foregoing, no awning , screen, antenna, sign, banner or other device, and no
exterior or structural change, addition, projection, decoration or other
feature shall be erected or placed upon or attached to any such Unit or any
part thereof; no addition to or change or replacement (except, so far as
practicable, with identical kind) of any exterior light, door knocker or other
exterior hardware, exterior door, or door frames shall be made, and no
painting, attaching of decalcomania or other decoration shall be done on any
exterior part or surface of any Unit nor on the interior surface of any window…
Over the years, Ms. Feldman’s
kitchen door proved problematic.
Following the board’s first denial to wall up the entrance, a wintertime
nor’easter caused water to blow into her home through the bottom of the kitchen
door. The frame of the kitchen door
rotted or experienced rot four times.
Around 2000, the board hired someone to remove the rot and repair the
frame. The third time the frame rotted –
sometime before 2020 – the board replaced the door and frame. Unfortunately, this did not prevent water from
entering the kitchen during subsequent nor’easters or when contractors
power-washed the home’s exterior. At the
time of trial, the frame was showing mold and rot again.
Although most of the buildings
within the condominium community were similar to the one that contained Ms.
Feldman’s unit, many of the buildings have units with exteriors that differ in
many ways from that of other buildings.
Many of those exterior changes occurred following the original
construction. Most of these changes,
which were not uniform, received the board’s approval. The board otherwise tolerated the changes
that did not receive approval.
In 2022, Ms. Feldman – in response
to the requirements of the board – provided it with photos of the affected
area, a quote from a licensed and insured contractor, and assurances that the
work would be done at her expense.
Nonetheless, the board again rejected her request – claiming that the
board “cannot allow owners to make structural changes to the buildings that
will fall back onto the Association to maintain.” Ms. Feldman thereafter initiated a lawsuit
against the association.
Judge Vhay found that the walling of
the unit’s kitchen exit would not result in additional maintenance costs. Indeed, it was costing the association money
to address the door’s rot on multiple occasions. Those costs would disappear. Having the door removed would not increase
the association’s power-washing or painting expenses (the association used to
paint and power-wash the door). Also, no
evidence at trial supported the board’s contention that the work proposed by
Ms. Feldman would raise any structural concerns whatsoever. The subject work involved simple carpentry.
Discretionary decisions of a
condominium board are subjected to scrutiny under one of two standards of
review: (1) the business judgment rule, or (2) the reasonableness standard.
Under the business
judgment rule, the board and its individual members are not liable for actions
taken in good faith and in the exercise of honest judgment in the lawful and
legitimate furtherance of the interests of the unit owners. Levandusky v.
One Fifth Ave. Apartment Corp., 553 N.E.2d 1317, 1321-23 (N.Y.
1990). The standard has its
origins in claims against board members in their individual capacities but has
been applied in the Commonwealth to claims against the board. E.g., Pompei v.
Fincham, No. 07-4743-BLS2, 2007 WL 4626915, at *2 (Mass. Super.
Ct. Nov. 16, 2007) (Fabricant, J.); Pederzani v.
Guerriere, No. 930502A, 1995 WL 1146832, at *1 (Mass. Super. Ct.
Aug. 11, 1995) (Hely, J.). There
are also trial court cases refusing to apply the business judgment rule in this
circumstance. E.g., Trs. of
Muzzey High Condo. Trust v. Lexington, 15 Mass. L. Rptr. 91, 2002 WL
1799736, at *12 (Mass. Super. Ct. June 7, 2002) (Neel, J.). An application of the business judgment rule
creates a much higher burden on a complaining party and typically gives the
board the necessary discretion to make what are often difficult decisions
capable of resolution in numerous different ways.
In
the alternative, an application of a reasonableness standard, which also gives
deference to the board’s decision, may be applied by the court. The desired review is akin to the review of a
municipal zoning board. The board has
broad discretion in its decision making, but the discretion is not unlimited. The trial court should not substitute its
judgment for the judgment of the board; so long as the board’s exercise of
discretion was reasonable, it is sustainable even if a unit owner or reviewing
court may have decided otherwise. Association
counsel will find substantial support for this standard of review in appellate
decisions of other jurisdictions. See, e.g., Bolandz v.
1230-1250 Twenty-Third St. Condo. Unit Owners Ass’n, Inc., 849 A.2d
1010, 1014-15 (D.C. 2004).
Judge Vhay determined that –
regardless of the standard applied – the court could not uphold the board’s
decision to deny Ms. Feldman permission to perform the subject work to her
kitchen door, writing as follows:
The Court needn’t decide which standard controls board
decisions pertaining exclusively to condominium common areas. That’s because the Board’s 2022 denial fails
every test described above. The
decision’s not reasonable under the facts proven at trial: the Work will cost
the association nothing; it will save the Association future maintenance and
repair costs; and it will reduce the Association’s liability for future
interior damage to 13 Aurora as well as rot and mold infestation. But the denial’s also not worthy of deference
under the business judgment doctrine.
The denial’s arbitrary: the Board allowed more structurally intrusive
alterations to Common Elements at 17 Aurora.
The denial’s not credible: the Board’s August 22 denial letter gives
only one (factually unsupported) reason for denial, and by the time of trial,
the Board offered four new (likewise unsupported) excuses. The denial reflects no care in its
consideration of the facts, despite the Board’s going through the motions of
asking Feldman for construction details.
And the Board ultimately failed at trial to articulate even a single
substantiated reason why, for the good of the Association, the Board denied the
Work.
After admonishing the board for its
failure to act reasonably or to utilize sound business judgment, Judge Vhay
entered judgment in Ms. Feldman’s favor and remanded the case to the board with
instructions that it allow Ms. Feldman to have her kitchen door removed and
walled up.
The
Sanctuary Condominium case serves as a reminder that condominium boards cannot
rule with impunity. While boards are
afforded substantial discretion, that discretion is not limitless. As Judge Vhay determined, the decisions of a
board must be in good faith and in the exercise of its honest judgment in the
lawful and legitimate furtherance of the condominium’s purposes. A board’s decision should be based on sound
reasoning and its decisions over time should be consistent. When faced with requests from a challenging
unit owner, a board should consult with counsel in order to help assist with
reaching well-reasoned decisions. It is
far better practice to try to address these issues as they initially arise,
rather than waiting to be sued by a pro se unit owner.
Dave is a
principal in the firm of Moriarty, Bielan & Gamache LLC, headquartered in
Quincy. He specializes in complex civil litigation at both the trial, and
appellate levels. Dave’s practice is focused on construction, real estate, and
condominium matters. His clients include condominium associations, real estate
developers, general contractors, subcontractors, and individuals. Dave can be contacted at drogers@mbgllc.com.
