Published on: July 1, 2009
On June 22, 2009, MEEB Attorneys Thomas Moriarty and Katherine Brady scored a major victory for Lobisser Building Corp. and Crystal Springs Condominium Association at the Massachusetts Supreme Judicial Court in a case of first impression regarding the interrelation of phased condominium projects and local zoning concerns. In its decision, the Supreme Judicial Court reversed a decision of the Land Court, and held that, in the context of the phased development of a condominium project pursuant to a special permit, a developer does not need to commence construction or make substantial use as to each phase of the project within two years to prevent lapse under G.L. c. 40A, § 9. The Supreme Judicial Court’s decision in Lobisser Building Corp. v. Town of Bellingham recognizes the value and viability of phasing in condominium development, particularly in light of economic and market concerns.
In 1985, the original developer and declarant of the Crystal Springs Condominium in Bellingham, Massachusetts obtained a special permit to develop the Condominium in four phases. The original developer timely commenced and completed the construction of two of the four phases. After the passage of nearly two decades, the Association voted to revive the development rights and, together with a prospective developer, Lobisser Building Corp., filed an application with the Town of Bellingham Planning Board to modify the original special permit to construct additional units. The Town denied the modification arguing, inter alia, that the rights under the special permit had lapsed as to the final two phases where the original developer had not made substantial use of those phases. MEEB, on behalf of Lobisser and the Association, appealed the Town’s decision to the Land Court on the basis that G.L. c. 40A, §9 does not require that construction or substantial use occur as to each individual phase to prevent lapse of the special permit – it only requires either that the developer commence construction or make substantial use of the special permit as to the project as a whole. The Land Court, however, sided with the Town holding that where the special permit contemplates separate phases, “substantial use” of the rights under a special permit “must be directly related to that phase for its development rights to be preserved.”
Recognizing the import of the Land Court’s decision on phasing rights in the Commonwealth and on the validity of units created under phased developments that have, in recent years, been subject to the economic decline, MEEB filed an application for direct appellate review of the Land Court’s decision with the Supreme Judicial Court. The Supreme Judicial Court agreed with MEEB that the issues raised by the Land Court’s decision presented matters of significant public interest and took the matter up for final determination by the full panel.
Attorney Thomas Moriarty argued the matter on behalf of Lobisser and the Association before the Supreme Judicial Court in March of 2009. The Real Estate Bar Association and Community Association Institute provided amicus briefs in support of the prospective developer and association’s position and interpretation of the relevant zoning statutes.
Upon review and as set forth in its decision of June 22, 2009, the Supreme Judicial Court reversed the decision of the Land Court. The Supreme Judicial Court recognized first that G.L. c. 40A, § 9 does not require that a developer both commence construction and make substantial use of a special permit to prevent its lapse. More particularly, with regard to a phased project, the Supreme Judicial Court agreed with MEEB that a developer need only commence construction or use with respect to the project as a whole commenting, “nothing in §9 indicates that each phase of the project is subject to its own lapse period.” The Supreme Judicial Court specifically rejected the Land Court’s holding and the Town’s position that, in order to preserve development rights pursuant to a special permit of a phased condominium, infrastructure related to later phases of the Condominium must be constructed. Where the Land Court and Town also made an issue of the passage of time between the development the initial two phases and the application for a modification of the special permit to build additional units, the Supreme Judicial Court agreed with MEEB that it is incumbent upon the municipality to establish an express time limitation as a condition of approval of a special permit.
MEEB is pleased that the Supreme Judicial Court’s ruling in Lobisser Building Corp. v. Town of Bellingham acknowledges the imporatance of flexibility in condominium development and facilitates condominium development that is responsive to market conditions. A copy of the decision is available by clicking on the link below.