Published on: June 14, 2001
It seems that whenever a condominium association is sued these days, a claim for violation of the Massachusetts General Laws c.93A can be expected. Chapter 93A, the so-called “Consumer Protection Statute,” prohibits entities involved in “trade or commerce” from committing any “unfair and deceptive trade practices. Recently, Massachusetts Courts have adopted the position that condominium associations, acting through their Boards of Trustees, are not considered to be involved in trade or commerce as defined by the Act. Notwithstanding the fact that in many cases condominium associations operated in a similar manner to businesses (e.g. sign contracts, hire and fire employees, collect debts, pay bills, etc.), Courts have considered that Trustees who are unit owners themselves, are elected by their fellow units owners, are volunteers and serve without compensation. As a result, Courts have consistently found that condominium associations are, under most circumstances, not involved in trade or commerce and are therefore not subject to Chapter 93A.
There are, however, circumstances where a condominium association could be found to be involved in trade or commerce. Theoretically, if a condominium undertakes a course of action which is beyond the normal scope of the association’s obligations, liability could be found. For example, where an association buys a unit at foreclosure and then leases same to tenants, they may have crossed the line. Likewise, were an association to begin to lease parking spaces to the public, their actions could be considered as trade or commerce. Trustees should carefully consider the consequences of such commercial ventures.