Page 6 - New England Condominium June 2019

6 NEW ENGLAND CONDOMINIUM -JUNE 2019 NEWENGLANDCONDO.COM L aws, and the legal decisions that sup- port and enforce them, are constant- ly evolving and can affect every facet of community life in HOAs, condomini- ums and co-ops. While law and legal cases can emanate from any of our three levels of government – federal, state or local – most of the developments that affect hous- ing come from the bottom up, with local and state law often defining or redefining what co-op, condo, HOA, and even own- ers of rental housing may and may not do within the law. Much of the legislation and case law pertaining to housing derives from the federal Fair Housing Act, which was signed into law by President Lyndon Johnson in 1968 around the time of the civil rights movement. The law exists pri- marily to protect against race-based dis- crimination in housing, but it has gone on to represent and promote a much broader range of principles. Aside from non-discrimination, hous- ing law and legislation also deal with safety, equity, and the ability of local gov- ernments to tax real estate owners. This type of legislation and specific case law more than likely originates at the local and state level. Often as a result, indi- vidual statutes and cases apply to specific localities. A decision handed down in a New York court may not affect commu- nities in Massachusetts, though a similar case could result in a similar decision in more than one locale. Similarly, a statute may apply to a co-op or condo in one city and not in the neighboring one, resulting in different requirements literally a few miles apart. Two Cases From New England Howard Goldman, a partner at the law firm of Goldman & Pease in Needham, Massachusetts, points out two recent cases that demonstrate the ability of the courts to define protections and rights under current law. In the first case, Trust- ees of Cambridge Point vs. Cambridge Point, the Supreme Judicial Court in Mas- sachusetts ruled against so-called ‘poison pill’ clauses in condominium governing documents that may have been placed there to prevent a condo association from successfully suing its developer. Goldman explains that in the Cambridge Point case, this particular condominium association was left with over $2,000,000 worth of construction defects, but the association’s governing documents re- quired approval from fully 80 percent of the ownership in order to sue for damag- es. The developer still owned 20 percent of the units, which meant 100 percent of individual unit owners would have to ap- prove the suit in order to move forward. In addition, the suit had to be brought within 60 days and the association board had to produce an estimate of what the legal process might cost the association to conduct. The feeling was that owners might be alarmed if the cost to bring the proceeding appeared more costly than the cost to cure the construction defects. The court ultimately ruled that poison pill clauses were not in the public inter- est. “The court looked at gross negligence and warranty of habitability to make its judgment,” says Goldman. “The decision may be appropriate for the legislature to amend the condo statute to avoid these poison pill clauses.” He advises condo as- sociations that if they have this type of clause in their documents, they should amend the documents to remove them. A second case outlined by Goldman is Rauseo vs. Board of Assessors , which looked at the taxation of parking ease- ments. “In Boston, the state began to assess unit owners for their ownership of parking spaces,” explains Goldman. “Purchasing indoor parking in Boston is quite expensive – often $40,000 to $100,000 per space – and the city thought they could make some money from this. The defense has always been that the user isn’t really the owner; it’s an ease- ment. And often the entire parking area is what’s called an easement in gross. The second defense is that the space is part of the common area of the condomini- um. What the court response said was that easements in gross are not actually part of the common area. The court also made the distinction that often these are easements in gross that the developer re- serves for itself – not the condominium.” The lower court found for the city, and the appellate court affirmed the city’s right to tax ownership of parking. Meanwhile, in New York... According to Mark Hakim, a com- munity law attorney with the New York- based firm Schwartz Sladkus Reich Greenberg Atlas: “Co-ops and condo- miniums are subject to more and more legislation affecting how they govern. But in a cooperative, where the apart- ment corporation owns the building and each shareholder lives in an apartment via a proprietary lease, many laws are ap- plicable that do not affect condominium buildings. For example, Local Law 55 of 2018, \\\[which addresses\\\] indoor asthma and allergen hazards in residential dwell- ings, as well as pest management, went into effect as of January 19, 2019. It ap- plies to all multiple dwelling property owners, which includes co-ops. This law requires the owners to investigate and remediate indoor allergen hazards such as mold, mice and rats, and cockroaches. When it comes to mold, the new law re- Legal & Legislative Update 2019 How Will Your Community Be Affected? BY A J SIDRANSKY ISTOCKPHOTO.COM LAW & LEGISLATION continued on page 18