The relationship between
condominium unit owners and the condominium trust (or association) is often
misunderstood. The
1. The problem – A
condominium trust is assessed with sewer fees because unit owners are tied into
town sewer.
In the matter of Sturbridge
Hills Condominium Trust v. Board of Selectmen of Sturbridge, the issue
was whether the Town of Sturbridge had the right to assess a condominium trust
with sewer fees. Like many municipalities, the Town of Sturbridge charges sewer
fees to the users of town water who are also tied into the town’s sewer system.
Accordingly, a homeowner who uses both town water and town sewer receives a
quarterly bill that includes a fee for metered water use and an additional fee
for sewer use. The sewer fee is calculated based on the volume of water used,
the idea being that water use is a fair measure of sewer use. Homeowners who
use town water but not town sewer—for example, homeowners who use a private
septic system—are not charged an additional sewer fee.
The confusion can be costly when
a municipality fails to appreciate the difference between unit owners and the
condominium trust when it assesses water and sewer fees.
For years, the Town of Sturbridge
assessed the Sturbridge Hills Condominium Trust with water and sewer
fees. The Trust owns an automatic sprinkler system used to water lawns located
throughout the condominium grounds. The sprinklers use Sturbridge water, and
each sprinkler is metered. The Trust’s sprinklers have no connection to the
Sturbridge sewer system. The Town issued quarterly bills to the Trust that
included a water fee but also a sewer fee, based on the volume of water used by
the Trust’s sprinklers. The Trust complained to the Town about the sewer fees,
but the Town took the position that the sewer fees were appropriate because the
Sturbridge Hills Condominium unit owners are tied into Sturbridge sewer (each
unit owner receives a quarterly bill with both water and sewer charges). The
sewer fees charged to the Trust were substantial and amounted to tens of
thousands of dollars annually.
2.
The solution – a court rules that a condominium trust is a separate legal
entity.
Ultimately, the Trust submitted a
petition requesting that the Sturbridge Board of Selectmen, in its capacity as
the Water and Sewer Commission, stop assessing sewer fees to the Trust. The
petition was denied, and the Trust filed a lawsuit in the Massachusetts
Superior Court. In the lawsuit, the Town advanced a “property-based” approach,
arguing that that the condominium property is connected to the Sturbridge s
sewer system, and therefore all metered water use on the property—including
meters for the Trust’s sprinklers—must be assessed with both water and sewer
fees. The Court disagreed and ruled in favor of the Trust. The Court noted that
under the local regulations, water and sewer fees must be assessed to a “water
user,” not to a property.
Furthermore, the Court noted that
the state statute governing municipal sewer assessments, Massachusetts
General Laws Chapter 83, Section 16, provides that fees must be “just and
equitable” and “paid by every person who enter his particular sewer
therein.” (Emphasis added). The Court held that the Massachusetts Condominium
Act establishes a condominium trust as a legal entity that is separate and
distinct from the unit owners, and thus it is a separate and distinct water
user. Therefore, the fact that unit owners were tied into the Sturbridge sewer
system was not a legitimate reason to assess the Trust with sewer fees.
The Sturbridge Hills Condominium
Trust case is a good example of a condominium trust being proactive to overcome
a municipality’s unlawful and unjust assessment of fees. Fighting city hall can
be a daunting challenge, but there are circumstances where a condominium trust
should take on that challenge to protect the condominium’s rights.
Originally posted March 28, 2018
on tlawmtm.com:
Thom
has over twenty years of experience as a practicing attorney in Massachusetts
and New Hampshire. He represents condominiums, corporations, and individuals in
a wide range of matters with a primary focus on complex real estate litigation.
His specific areas of practice include construction defects, condominium
enforcement, zoning and land use litigation, beach rights, and other property
disputes. He has tried and litigated cases in the Massachusetts and New
Hampshire state and federal courts and has successfully argued appeals in both
states. He has also handled matters in various administrative agencies and
served as an administrative law judge. Since 2008, Martindale-Hubbell has
recognized Thom with an AV-Preeminent® rating, the highest such rating
available to an individual attorney.
