MASSACHUSETTS APPEALS COURT UPHOLDS 1978 SHARED PARKING AGREEMENT BETWEEN TWO CONDOMINIUMS

Parking is always tight in urban condominiums, especially in Boston, Brookline and Cambridge.  It is also expensive.  Parking spaces can sell for six figures.  As such, condominium parking is often the subject of controversy and sometimes litigation as the following case illustrates.In the case of Sewall-Marshal Condominium Assoc. v. 131 Sewall Ave. Condominium Assoc., one condominium challenged the validity of a 1978 agreement dividing parking spaces with a neighboring condominium association on the grounds that the Agreement violated the Massachusetts Condominium Act, M.G.L. c. 183A.  One Condominium contended that 100% unit owner consent was required for the parking agreement and/or that it was unconscionable.  The Land court disagreed keeping the 1978 agreement in place.  The Massachusetts Appeals Court affirmed the Land Court’s Decision on March 1, 2016.  A copy of the Decision can be obtained by clicking the link.The parties were neighboring condominium associations in the Coolidge Corner area of Brookline, where parking is at a premium. In 1978, when both condominiums were controlled by the same developers, they entered into a written agreement concerning the shared use and allocation of parking spots on their respective properties. Summarized in broad strokes, they agreed that twenty percent of the spots would be reserved for residents of the plaintiff, the smaller of the two condominium associations (Sewall-Marshal), and eighty percent would be reserved for residents of the defendant, the larger one (131 Sewall), at no cost to either side. This arrangement continued for some twenty-eight years until 131 Sewall notified Sewall-Marshal that it would no longer abide by the agreement. Litigation followed, with the larger condominium seeking a declaration concerning the rights of the parties under the agreement. In essence, 131 Sewall contended that the agreement is unenforceable because it fails to comply with various provisions of G.L.c. 183A, the statute that enables the creation of condominiums, and because it is otherwise an unconscionable contract.Specifically, 131 Sewall contended that the parking agreement was an unrecorded easement and, therefore, void ab initio, and, further, pointing to §5(b) of the Act, that the parking agreement altered the undivided interests of the unit owners without their consent. Section 5(b), as in effect when the condominiums were formed, see St. 1963, c. 493, §1, provides, in part, that ‘[t]he percentage of the undivided interest of each unit owner in the common areas … as expressed in the master deed shall not be altered without the consent of all unit owners, expressed in an amended master deed duly recorded.  [The Act was amended in 1994 to allow for the grant of easements without 100% unit owner consent, and that act has some limited retroactivity, however, since the agreement was executed in 1978, the Court applied law in effect at that time, also the limited retroactivity provisions of the legislative amendment did not apply].The Appeals Court held that both arguments failed because they rested on incorrect premises: namely, that the parking agreement created an easement and that it affected the interests of the unit owners in the common areas.   The Appeals court held that the parking agreement did not create an easement because it did not create a property interest appurtenant to land. Although the agreement sets the percentage of parking spaces each condominium has the right to use, it does not assign any particular space to one or the other condominium, or to any specific unit owner. There is no specific property benefited or burdened by the agreement; accordingly, the parking agreement did not create an easement and hence the Condominium Acts provisions relative to granting of easements was not implicated.The Appeals Court also went on to note that the parking agreement did not alter 131 Sewall’s unit owners’ percentage interest in the condominium’s common areas such that unanimous consent was required under G.L.c. 183A, §5(b).  The Appeals court stated that “[T]he parking agreement does not grant exclusive use of the condominium’s common areas to any unit owner. Indeed, the agreement created a procedure whereby parking space assignments could be changed each year. No unit owner’s interest in the common area diminished”.The Appeals Court stated that “Rather than creating an easement or altering interests in the condominiums’ common areas, the parking agreement was instead simply an exercise of the boards’ powers under G.L.c. 183A, § 10(b)(1), inserted by St. 1963, c. 93, §1, ‘[t]o lease, manage, and otherwise deal with … [the] common areas.’ … Because the Massachusetts condominium statute does not circumscribe the means by which a board can exercise this power, the boards here were allowed to exercise it in whatever lawful way they saw fit. In this case, the developers did so by including in the by-laws the power to enter into a parking agreement with the abutting condominium, and then signing a contract that pooled and allocated parking spaces located on the common areas.”  The Appeals court held that the parking agreement is a valid contract, that is, a bargained-for exchange supported by consideration. “Each side gave and received the opportunity to park in the other’s parking spots. This opportunity was not a chimera; at least one unit in 131 Sewall has been assigned a parking spot at Sewall-Marshal for at least twenty years. … It does not matter that the benefit may have been greater to the residents of Sewall-Marshal than to those of 131 Sewall.Finally, the Court rejected the claim that the contract was unconscionable, by stating: “131 Sewall argues that the parking agreement, if a contract, is an unconscionable one. … As the same three people constituted the boards of both condominiums when the contract was entered into, the parking agreement could hardly result in unfair surprise to either side. That the agreement was adhered to for over twenty years without incident underscores the lack of surprise. …”The above case illustrates that Courts are going to be reluctant to undo a contract and a course of dealing that has been in existence for a number of years.  That being said, parking agreements and easements contain numerous traps for the unwary, as the above case illustrates, there are numerous statutory arguments that can be made when it comes to control and legality of condominium parking spaces. Parking and easement issues in condominiums are extremely complex and should be carefully reviewed for statutory and legal compliance.  They can be a hidden asset or a burden when it comes to maintenance and litigation, which should not be ignored.For a copy of the decision [click here].