A recent decision by the
Massachusetts Appeals Court concerning a unit owner’s right to unilaterally
expand her unit into exclusive use common area previously granted by virtue of
the master deed has
raised some uncertainty as to how condominium boards effectuate
grants of limited common area, and more specifically, what rights unit owners
have to alter existing exclusive use area.
In Cavalo v.
Raspallo, 92 Mass.App.Ct. 350 (2017), the Appeals Court concluded that a
unit owner may not “annex” exclusive use common area to her unit without the
unanimous consent of the other unit owners holding a legal interest in that
common area, despite the fact the area is for the exclusive use of the
expanding unit owner. Cavalo involved a two-unit condominium in Dennis,
Massachusetts where most of the common area was designated in the master deed
as “exclusive use” for one unit or the other. In 2011, one-unit owner, Cavalo,
constructed a 111 square-foot enclosed addition to her home which was situated
entirely on her exclusive use area. The Raspallos challenged her ability to
construct the addition and filed suit seeking injunctive relief both on their
own behalf and derivatively on behalf of the association. After affording the
parties an opportunity to resolve the matter privately, the trial court
ultimately determined that the addition was not properly authorized, ordered
its removal and required the Raspallos to pay attorneys’ fees to the association
in connection with the derivative aspect of the claim.
The Appeals Court agreed with the
trial court and appears to articulate a new standard requiring consent from
100% of all condominium unit owners when a unit owner seeks to expand their
unit into previously granted exclusive use common area. The reasoning for the
Court’s conclusion, however, is largely pinned on two cases from the 1990’s
with substantially different factual scenarios, as well as certain amendments
to M.G.L.
c. 183A, s. 5 which govern the grants of exclusive use areas in a manner
different than what underpins the Court’s concerns.
The Court initially relies upon Strauss v. Oyster
River Condominium Trust, 417 Mass. 442 (1994) which involved a similar
expansion of a unit into exclusive use common area, however in that
circumstance the master deed purported to allow unit owners to expand their
units into common area needing only the consent of the trustees. In Strauss,
the area into which the owners expanding their units was not originally
exclusive use area, which resulted in the need to recalculate percentage
interest in the common areas for all other owners, which constituted a
deprivation of property interests in violation of the master deed and c. 183A.
In Kaplan v. Boudreaux,
410 Mass. 435 (1991), the Court was confronted with similar circumstances
in which the trustees attempted to implement an amendment to the condominium’s
bylaws granting a single unit owner exclusive use over a portion of common area
that was not originally granted in the master deed. As a result, other unit
owners lost their right to use that portion of the common property, the
deprivation of which created a need to recalculate the relative interest of all
unit owners in the common area, something which would have required consent of
100% of the percentage interest.
Distinguishing
Cavalo
Both Kaplan and Strauss involve
instances where the common area over which the unit owner expanded their unit
was not exclusive use area prior to the expansion, which ultimately deprived
other owners of their interest in that portion of the common areas. In Cavalo,
the unit owner already possessed the exclusive use area so it presents a
legitimate question as to whether the other unit owner(s) are actually deprived
of any property right, as they were not previously permitted to utilize that
portion of the common area in the first instance. Further, as no unit owner was
deprived of such a right to enjoy that portion of the common to which they
previous possessed, the need to recalculate the percentage interests of all
owners was not triggered. Nevertheless, the Court relied upon the reasoning in
Strauss and Kaplan in concluding Cavalo’s actions were not permitted.
The Cavalo Court expressed
concern that if it adopted Raspallo’s position then “condominium trustees could
unilaterally assign common area to the exclusive use of a unit owner and then
allow that unit owner to take fee simple possession of that former common area
by building on it.” That concern, however, is belied by the specific statutory
framework regarding grants of exclusive use area, which was modified in 1994,
partially in response to Kaplan and Strauss. M.G.L.
c. 183A, s. 5(b)(ii) requires that when a board desires to grant limited
common area to a unit owner which was not otherwise granted in the original
master deed it must obtain the consent of all unit owners abutting the area
which will become exclusive use as well as 51% of all first mortgagees; such a
grant cannot be made by the trustees acting alone, which effectively eliminates
the concerns raised by the Cavalo Court. In fact, the 1994 amendments to
Section 5(b), and the assumed underlying motivation for the changes, are
irrelevant to the circumstances present in Cavalo because there was no grant of
limited common area by the trustees.
Raspallo has filed an Application
for Further Appellate Review (FAR) asking the SJC to consider whether the
expansion of a unit occurring entirely within an existing exclusive use area
appurtenant to that unit materially affects the ownership interests of other
unit owners. If the SJC accepts the case for further review its decision may
ultimately rest on grounds other than those articulated by the Appeals Court,
as the issue may in fact turn on whether certain types of expansion are
permitted over existing exclusive use areas (e.g. patios, decks, etc.), versus
whether the ruling addresses only those enclosed expansions that are considered
annexations of the exclusive use area, which would require consent from 100% of
the unit owners, despite the fact no new limited common area is being created
and no recalculation of percentage interests is required.
Practical
Considerations
If you are a developer or
represent a developer it is important to make your intention with regard to the
creation of the limited common area manifest in the master deed. If the grant
of exclusive use common area is to include the right to fully enclose the
space, state it clearly in the master deed. If the intention is not to allow
enclosure, but to allow something more than the maintenance of unimproved open
space, identify in the master deed with as much precision as possible the
unilateral rights possessed by the unit owner in such regard;
If you are a condominium board or
a manager advising a board that is considering granting a unit owner exclusive
rights to occupy the common area, but without the addition of elements which
enclose otherwise open common area land, whether it simply be to pass and
re-pass through an opening in a common area wall for the purposes of joining
two units or to allow unenclosed construction on a deck constructed on
exclusive use common area, consider granting both an easement and creating
limited common area under 183A Section 5(b)(2)(i)&(ii) and be specific in regard
to what the unit owner can and cannot do with and on the exclusive use area. In
such cases, the circumstances can be very different, and the board should
include, with the advice of counsel, such conditions as are appropriate
(including conditions identified below when advisable); and
If the intention is to allow a
unit owner the right to fully enclose and effectively incorporate a portion of
unimproved exclusive use common area as part of an owner's unit, the safest
approach is to get 100% of the unit owners to approve along with consent from
the requisite percentage of first mortgagees.
If, on the other hand, the
decision is made to rely on the power granted to the organization of unit
owners in the statute, without 100% of the unit owners, then the board should:
a. Review the master deed to
determine if such grant is inconsistent with other provisions in the governing
documents;
b. Check with its insurance agent
to ensure that the elements of the structure can be, and are insured and
include in the grant an obligation on the part of the unit owner to reimburse
the board for any costs associated with same;
c. Include in the grant a signed
acknowledgement that the board is not guaranteeing the efficacy of any such
grant and that the unit owner does not rely on the board and accepts fully the
risk associated with the contemplated construction and agrees to pay to remove
same and restore the common area should a court determine the construction
violates the law; and
d. include in the grant an
acknowledgement by the unit owner of its responsibility to pay any costs
incurred by the association in connection with the improvement
There are many other issues of
concern associated with a unit owner performing construction on the common area
including the need to ensure the construction is good and workmanlike, insuring
the structure during building operations, liability and workers' compensation
insurance, architectural integrity, etc. which go beyond the simple exercise of
the power to grant the easement or create the limited common area-and go beyond
the subject matter of this article-which should be reviewed in detail with
counsel in connection with any such undertaking.
Originally posted December 5, 2017 on tlawmtm.com:
Chris is a founding member of Moriarty Troyer & Malloy LLC and brings nearly fifteen years of litigation and trial experience in the areas of community association, real estate and complex construction law. Chris’s practice also focuses on condominium construction defect and transitional litigation at the trial and appellate level of the state and federal courts as well as in various alternative dispute resolution forums.
In his condominium and real estate practice Chris represents residential and mixed-use condominiums, homeowner associations and property management companies in a broad range of matters and provides advice on operational and governance issues, interpretation and amendment of governing documents, rules and bylaw enforcement, developer transition issues and common area disputes. Chris also manages the firm’s common area lien enforcement practice.
Chris represents a wide variety of clients including condominium and homeowner associations, building owners, developers, general contractors, construction managers, subcontractors and suppliers in all aspects of construction transactions, disputes and litigation including defective work claims, breach of contract, and violations of M.G.L. c. 93A. Chris has expertise with disputes involving both public and private construction projects and has extensive experience with complex multi-party construction defect litigation.
