Being a homeowner can get complicated — especially when you’re in it together with your neighbors.
Condominium owners are likely well accustomed to the specific laws and regulations in Massachusetts that manage everything from ownership percentages to collective liability, many of them summarized in state General Law Chapter 183A.
“There are so many issues that can arise, and the most important one will always be the one that addresses the … existing concern,” Tom Moriarty, a real estate attorney who has expertise in community association law at Moriarty Troyer & Malloy LLC, recently wrote in an e-mail to Boston.com.
Whether you’re a longtime owner or considering purchasing a condo, here are a few key points of the law, from ones that are called on regularly to less frequent issues that are very important, according to Moriarty:
Under Section 2 of Chapter 183A, condominiums can be established on leased land.
Moriarty, who is also president of the Community Associations Institute‘s New England Chapter, said this may not be an issue for owners whose property leases have decades left before they expire, but there are undoubtedly associations facing far less time than that.
“When they’re first created, you know, usually it’s a 99-year lease, and sometimes it’s a 99-year lease that can be extended to two 99-year periods, so you know nobody’s worried about that now,” Moriarty said in an interview. “But if it’s just a 99-year lease, let’s say it was created in 1973: You’re kind of looking like, ‘Huh, Well, it might not (expire in) my lifetime, but maybe my kids’ — what’s going to happen, how’s this going to shake out?’ It’s just something that I think people should be aware of.”
As far as ownership goes, the law makes quite clear that every unit owner exclusively owns their unit, but they must comply with the homeowner association’s governing rules and related regulations, according to Moriarty.
That said, a common misconception is that the association owns all of the common areas in a building, Moriarty wrote in an e-mail. In reality, all unit owners “own an undivided interest in the common areas” under Section 5(a) of the law.
“Also of significance, this section establishes that the percent interest of each unit should be in the approximate relation that the unit has to the value of all the units combined,” he wrote.
Can the percent of ownership interest be changed?
Yes, but only with the owner’s consent and with few exceptions, according to Moriarty.
“That is an important protection for a unit owner as it prevents the governing documents from being amended to change percentage interests (which controls most voting and usually fixes the amount of an owner’s monthly common expense fee),” Moriarty wrote. “The prohibition has been recognized by the courts as prohibiting both a numeric alteration to percentage interest (literally changing the percentage number in the master deed) and an alteration to percentage interest by means of some occupation of the common area that deprives a unit owner of use or access.”
Under Section 6 of 183A, those common expense assessments must be charged based on percentage interest or square footage, Moriarty wrote. Should a unit owner fail to pay his or her share, the association can place a lien against the condominium, which can be foreclosed on.
“As interpreted by the appellate courts, a unit owner cannot contest the legitimacy of a common expense assessment by refusing to pay it, and except for narrow exceptions that a court must endorse, a unit owner must first pay an assessment in order to challenge it,” Moriarty wrote.
Section 10 of 183A outlines the authority of condo associations.
But Moriarty notes there’s an important right for unit owners embedded in it: All unit owners have the right to inspect and copy the books and records of the association under the law, he wrote.
It’s obviously important for an association to be in good standing. If not, it could cost unit owners — literally.
Under Section 13, owners are liable for the balance due should an association exhaust its funds and must address a claim against it, contractually to a third party or even through a lawsuit, according to Moriarty.
The law is rarely employed, however, he said: In his three decades of experience, he has encountered only one incident.
“When [owners are] hemming and hawing about the cost of insurance and not wanting to pay a little more to have coverage, they always need to be thinking: ‘I own this. I’m on the hook for this. If there’s a deficiency, it’s coming out of my pocket,’ “ Moriarty said. “It’s something every owner should be aware of even though” it rarely happens.
In order to upgrade a common area of the condominium building, at least 50 percent of the unit owners must vote in support, as per the law, according to Moriarty.
However, if more than 50 percent but less than 75 percent of owners support the improvement, those who voted in favor would have to pay for the improvement themselves, he wrote. If at least 75 percent vote in support, the improvement is treated as a common expense.
The law, in Section 19, also provides for 75 percent of the unit owners to vote to remove all or a portion of the building or property from condominium status, Moriarty said. The portions that lose status would then be owned by all unit owners.
While these outlined provisions of the law are noteworthy, there is still much more to the statute that owners, prospective buyers, and associations should know and research.
You can look at these as the most commonly used sections and/or the ones in which the consequences are significant, Moriarty said. “So, really, people should be aware of it, but by no means would this give a board or an owner a complete understanding of the nuances” of the law.