CHANGE TO CONDOMINIUM LAW WILL MAKE IT EASIER FOR ASSOCIATIONS TO OBTAIN MORTGAGEE CONSENT WHEN AMENDING DOCUMENTS

Published on: January 22, 2015

As one of his last acts in office, Governor Patrick signed into law a bill that adds a new section to the Massachusetts Condominium Act that will make it easier for associations to obtain mortgagee consents when amending condominium documents.  The bill, which was proposed by Community Associations Institute Massachusetts Legislative Action Committee, chaired by MEEB’s Matthew W. Gaines, will greatly benefit many condominium associations in Massachusetts that for years have been faced with an almost insurmountable hurdle when it comes to amending condominium documents.  The bill will take effect in 90 days.

In order to amend the Master Deed, Declaration of Trust or By-Laws of a condominium it is necessary to obtain the consent of a certain percentage of unit owners (usually either 67% or 75%).  Many condominium documents also require the association to obtain the consent of a certain number of the holders of mortgages on units in the condominium.  Condominium documents drafted over the past ten years, usually state that if the holder of the mortgage does not respond to a request for a consent on an amendment within 60 days, consent of the mortgage holder may be deemed given.  Unfortunately, condominium documents that were drafted before 2000, typically do not contain such a provision.

Back in the 1970s obtaining the consent of the holder of a mortgage was not as difficult as it is today.  Banks back then were much smaller, and it is entirely possible that you could find the president of the bank (or at least someone with the authority to sign an amendment) sitting in the back office of the bank.  With the consolidation and mergers of banks of the past 20 years, finding someone at a large national bank who has the authority to consent to an amendment to the condominium documents (nonetheless respond in a timely manner) is almost impossible.  This presents a serious disadvantage to many associations when it comes to amending condominium documents.

However, the hurdle of obtaining mortgagee consents just became much easier to jump over.  Pursuant to a new Section added to the Massachusetts Condominium Act, if the condominium law documents require the consent of mortgagees, the association must send written notice of the amendment to the mortgagee by certified mail, return receipt requested and first class mail, and if the mortgagee does not object to the amendment within 60 days of the date of the mailing, consent of the mortgagee shall be deemed given.  This is a huge victory for many condominium associations in Massachusetts that have for years avoided amending their documents due to what has been perceived as an insurmountable hurdle.

In addition to the foregoing, the new law also eliminates conflicting language in the Massachusetts Condominium Act pertaining to the granting of easements and limited common area.  Prior to 1998, in order for a unit owner to obtain a grant of limited common area it was necessary to amend the condominium’s master deed.  In 1998, the legislature amended Section 5 of the Act to give authority to the Board of the association to grant LCAs and easement without having to amend the Master Deed.  However, when this change was made in 1998, the old language requiring an amendment was not deleted.  Thus, there has been conflicting language in the Act for the past several years.  The bill signed by the Governor this week removes this conflict by finally deleting the amendment requirement in Section 5(c) of the Act.

We would like to thank Senator Brian A. Joyce and Representative Claire Cronin for their efforts in championing this bill through the legislative process.

If you have any questions regarding how these changes impact your association please do not hesitate to contact our office.

A copy of the legislation can be found by [clicking here].