Year: 2012

December 18, 2012

The Appeals Court has issued a pivotal decision that has effectively carved out an exception to the “economic loss rule” for condominium associations seeking to recover against developers for defective construction.  In Wyman v. Ayer Properties, LLC, the Appeals Court reversed the Superior Court’s dismissal of a condominium association’s claims associated with negligently constructed masonry – allowing the association to recover more than $375,000 from the developer of a Lowell condominium. The Appeals Court (Sikora, [Read More...]

December 6, 2012

Most community associations and their attorneys would probably agree that mediation can be a desirable alternative to litigation for resolving some disputes. But should associations be required to arbitrate disputes with condominium developers, even if neither the association’s board nor its owners explicitly agree to that requirement? The California Supreme Court answered that question affirmatively in a recent decision, ruling (in Pinnacle Museum Tower Association v. Pinnacle Market Development) that mandatory arbitration provisions are enforceable [Read More...]

November 28, 2012

On November 6, 2012 Massachusetts voters overwhelmingly voted in favor of ballot question 3. The approval of Petition Number 11-11, “An Initiative Petition for a Law for the Humanitarian Use of Marijuana,” legalizes the medical use of marijuana in the Commonwealth.  With almost all precincts reporting, 63% of voters registered their approval for the measure. In so doing, Massachusetts joins 17 other states and Washington D.C., including nearby Connecticut, Maine, Rhode Island and Vermont, in [Read More...]

October 27, 2012

“Don’t try this at home!” This warning, which scrolls under some television ads and programs, would be equally appropriate advice for the way one community association board managed a major construction project. (This is not actually one specific board but a composite, reflecting the experiences of several different boards.) The trustees obviously didn’t set out to provide a case study in how not to manage a construction project, but on the list of “things not [Read More...]

October 17, 2012

As of October 16, 2012, sixteen municipalities in California have banned smoking in condominiums and apartment complexes.  Most trends seem to work from west to east so you can expect to see this in the east in years to come. SAN RAFAEL, Calif., Oct 15 (Reuters) – A San Francisco suburb on Monday banned smoking in duplexes, condominiums and other multi-family homes, with city leaders saying they hoped to lead a wave of such regulations [Read More...]

October 16, 2012

California Supreme Court upholds Arbitration Provision On August 16, 2012, California Supreme Court in the case of Pinnacle Museum Tower Association v. Pinnacle Market Development held that a covenant to arbitrate with the developer in homeowner association documents is properly enforceable against the association, and is not void as against public policy.  In so deciding, the Supreme Court reversed an earlier decision of the California Court of Appeals the arbitration provision unenforceable. This issue has [Read More...]

October 16, 2012

In a long-anticipated case of first impression, the U.S. Court of Appeals for the 9th Circuit held that medical marijuana use is not protected by the Americans with Disabilities Act in James v. Costa Mesa. The plaintiffs were ill individuals who lawfully used medical marijuana under the state laws of California. They acquired their marijuana from dispensaries located in Costa Mesa and Lake Forest. These cities took steps to close the dispensary facilities within their [Read More...]

September 27, 2012

The Federal Housing Administration released a long-awaited revision of its condominium project approval guidelines on September 13th. The revisions to FHA condominium guidelines are contained in Mortgagee Letter 2012-18 and expire on August 31, 2014. FHA states it is making temporary adjustments to its condominium standards in response to market conditions. CAI has the new guidelines, Mortgagee Letter 2012-18, under review. FHA appears to have been responsive to several key CAI concerns including delinquency rates, [Read More...]

September 27, 2012

 Massachusetts has recently passed a law that provides cities and towns may no longer enact ordinances or by-laws that treat pit bulls as dangerous breeds (See Section 31 of Bill S02192). While it may be confusing to some condominium associations, condominiums still have the right to amend the Master Deed and to ban pit bulls within their private communities. However, Condominiums should be aware of this law as many of them have relied upon city ordinances [Read More...]

September 27, 2012

State Fire Marshal Stephen Coan says that, starting September 1, 2012, there is a ban on wood landscaping mulch within 18 inches of the base of wood- or vinyl-sided buildings.  Small residential buildings with fewer than six units are exempt.  But Coan says all property manager and homeowners should consider following the safety rule.  He says crushed rock is safer close to outside walls, and safe containers for discarded smoking materials outside will discourage careless [Read More...]

September 5, 2012

In condominiums as in society generally, laws and legal theories change over time as technologies, economies and stoical structures evolve. The changes are usually slow, often (though not always) welcome, and occasionally jarring. An apparent change in condominium law falls into the latter (largely unsettling) category. The change, reflected in a series of recent court cases, is “apparent,” because a handful of cases hardly constitute a judicial trend. But the common theme reflected in these [Read More...]

August 17, 2012

Attorneys and judges have always recognized that community associations are, for all practical purposes, quasi-governmental in nature.  They are empowered by statute to levy “taxes” (in the form of assessments) and enact and enforce their own “laws” (being their restrictions, rules and regulations).  When those powers have been legally challenged, courts all over the country have, by and in large, upheld them, as long as they have been applied in a reasonable manner.  However, the [Read More...]

August 17, 2012

In a long-anticipated case of first impression, the U.S. Court of Appeals for the 9th Circuit held that medical marijuana use is not protected by the Americans with Disabilities Act in James v. Costa Mesa. The plaintiffs were ill individuals who lawfully used medical marijuana under the state laws of California. They acquired their marijuana from dispensaries located in Costa Mesa and Lake Forest. These cities took steps to close the dispensary facilities within their [Read More...]

August 15, 2012

A decade ago, most condominium associations would not have considered applying for a bank loan, and a good thing – because they would have been hard-pressed to find a bank willing to make one. Today, associations will find that banks are not only willing to lend them money, but often enthusiastic about doing so. “In 30 years of originating these loans,” an area banker once told me, “I’ve never had to write one off.” He [Read More...]

July 31, 2012

“The New York Yankees beat the Boston Red Sox 7-3 to head into the three-day All-Star break with the best record in major league baseball.”   How much worse could it get? Quite a bit worse, actually. Since the All Star Break, the Sox have sunk below .500 and into last place in their division, 10-1/2 games behind the Yankees, as of this writing. For Sox fans, still reeling from last season’s appalling end-of-season collapse, [Read More...]

July 23, 2012

On June 22, 2012, the Massachusetts Supreme Judicial Court (SJC) issued a highly anticipated decision in the case of Eaton v. Federal National Mortgage Association.  The decision resolves a number of inconsistent and contrary decisions amongst Massachusetts Superior courts, the Land Court and U.S. District Court on the issue of whether there must be “unity” of the note and mortgage for a mortgagee to be legally entitled to foreclose on a defaulted borrower.  Said differently, [Read More...]

June 16, 2012

Ask condominium managers and trustees about the major headaches in their communities, and pets will invariably be at or near the top of the lists they create. Many issues engender strong feelings in the condominium world, but few equal the passions unleashed when pets are involved, as anyone who has tried to enact pet restrictions or enforce them can attest. Developing pet policies that are acceptable both to owners who love pets and those who [Read More...]

May 22, 2012

The killing of Trayvon Martin, an unarmed black teenager, by the head of a neighborhood watch group, has focused a harsh spotlight on these increasingly popular community-based crime prevention organizations. The incident, which has attracted national attention, has also raised questions about whether community associations should sponsor watch groups directly and whether, in fact, they should encourage these groups to operate in their communities at all. The details of this incident are well known. While [Read More...]

April 20, 2012

Hoarding is in the news again. A Tennessee Appeals court recently upheld a lower court ruling evicting a condominium owner from her unit and terminating her ownership rights. Agreeing that the owner’s hoarding, and the nuisance and health threat it created for other owners, violated the association’s covenants, the court approved the board’s request that the unit be sold and the proceeds used to repay the more than $100,000 in legal costs the association had [Read More...]

April 12, 2012

Massachusetts condominium jurisprudence typically reflects the guiding principle that the condominium statute is essentially an enabling statute, setting out a framework for the development of condominiums in the Commonwealth, while providing developers and unit owners with planning flexibility.  It is widely known that the Massachusetts Condominium Act, G. L. c. 183A, sets forth certain minimum requirements for the establishment of condominiums, but those matters that are not specifically addressed in the statute are to be [Read More...]

April 12, 2012

Massachusetts Condominium Associations continue to struggle with the ongoing ripple effects of foreclosures and high delinquency rates.  When fewer Owners are footing the bill the burden on those who are paying of course increases.   Unfortunately, even with recent government and banking industry plans to stem the tide of mortgage delinquencies, it appears that, at least for the immediate future, lost revenues and unpaid common area fees will continue to be a major issue for many [Read More...]

April 5, 2012

The battle between smokers and non-smokers may be reaching a tipping point in community associations. More boards are introducing master deed or by-law amendments prohibiting smoking completely – in individual units as well as in the common areas of their communities. And those proposals are attracting considerably more support and considerably less opposition than they have in the past. This is largely a reflection of changing attitudes toward smoking. Only 20 percent of the population [Read More...]

March 26, 2012

Condominium associations have dodged another bullet fired in their direction by federal regulators. This one, from the Federal Housing Finance Agency (FHFA), would have prohibited Fannie Mae, Freddie Mac and the Federal Home Loan Banks from purchasing mortgages on properties encumbered by “deed transfer fees” charged every time the properties are sold. The FHFA’s primary target was fees charged by private developers, but as proposed initially, the regulation would have barred all deed transfer fees, [Read More...]

March 19, 2012

Last week, the Federal Housing Finance Agency (FHFA) published a Final Rule restricting the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Banks from dealing in mortgages on properties encumbered by certain types of private transfer fee covenants. The Rule bears an effective date of July 16, 2012. The FHFA is an independent agency of the federal government which was established by the Housing [Read More...]

March 8, 2012

The courts in Massachusetts and most states typically defer as much as possible to the judgment of administrative boards responsible for enforcing local ordinances and codes. When a court finds that a municipal agency has erred, it will usually remand the case for further review, either by a lower court or by the agency, giving the local officials another bite of the enforcement apple – another opportunity to achieve the result they desire. So it [Read More...]

February 14, 2012

On November 23, 2011, the Governor signed into law Chapter 199 of the Acts of 2011, adding “gender identity” as a protected class under the Commonwealth’s non-discrimination laws.  Gender identity is defined as “a person’s gender-related identity, appearance or behavior, whether or not that gender-related identity, appearance or behavior is different from that traditionally associated with the person’s physiology or assigned sex at birth.” Under the law, gender-related identity may be shown by providing evidence including, [Read More...]

February 14, 2012

In August 2010, Massachusetts enacted a statute that set in motion two waves of reform in the state’s Criminal Offender Record Information (“CORI”) system. Employers already have had at least fifteen months to adjust to the “ban the box” reform that became effective in November 2010. See M.G.L. c. 151B, §4(9½) (amending the Massachusetts Fair Employment Practices Act to bar requests for criminal offender information on initial written employment applications, unless a statutory exception applies). [Read More...]

January 24, 2012

The law of unintended consequences is playing out big time for Massachusetts condominiums. Much has been written here and elsewhere about the unintended — and certainly unanticipated ― consequences of the Federal Housing Administration’s new underwriting requirements for condominium loans, which have made it considerably more difficult to buy, sell or refinance condominiums. Less widely recognized, but equally dramatic in their impact, is a trio of Massachusetts court decisions that have tied an already badly [Read More...]

January 18, 2012

On December 20, 2011, the Appeals Court ruled in an unpublished decision brought by a contractor against a condominium trust that mechanics liens imposed by contractors are inapplicable in the condominium context and cannot be utilized to attach common areas and/or secure contractor claims for non-payment. The case involves a subcontractor who was not paid by a general contractor hired by the condominium trust to perform work at a condominium.  The general contractor went bankrupt [Read More...]