Condominium Insider ✴ Free Seminar

 

– TIP OF THE MONTH –

When residents complain of a rules violation by another resident, the key to enforcement is documentation.  Managers and board members should take care to document every instance of complaints about Mr. Smith playing loud music at 2AM or of the noxious odors emanating Ms. Jones’ unit.  Having a documented history of each and every rules violation makes enforcement in court—if necessary—far easier.  Make note of the person making the complaint, the date and time of the violation and a brief description of what is being reported.

FREE MEEB SEMINAR
FRIDAY, SEPTEMBER 22, 2017
9:30 AM – 11:30 AM

RUNNING A SUCCESSFUL OWNERS MEETING

This program will focus on effective steps and methods that are involved in running a successful owners meeting.  Review the process and procedures for conducting an owners meeting, including the requirements for meeting notices, agendas, use of proxies, establishment of quorum, elections, tabulation of votes and more.  Learn tips and strategies to accomplish a successful meeting.

This free Seminar will be conducted by MEEB’s Pat Brady and Matt Gaines.

               

This free seminar is being held on
Friday, September 22, 2017
9:30 AM – 11:30 AM
(Registration at 9:00 AM)
at the offices of
Marcus, Errico, Emmer & Brooks, P.C.
45 Braintree Hill Office Park, Suite 107
Braintree, MA  02184

Refreshments will be served.
Space is limited.
To reserve your seat [
click here].

                                            

MA, RI AND NH CONDOMINIUM ACTS CONTAIN DIFFERENT PROVISIONS RELATIVE TO DEVELOPER PROTECTIONS AFFORDED TO OWNERS

Representing condominium associations in three different states can be daunting.  MA, RI and NH have three very different condominium acts.  This document compares and contrasts the differences in the developer related provisions in the 3 acts.

This comparison chart refers to pure statutory provisions themselves and does not include case law interpreting the same, I will leave that for another day.

I hope you will find this reference chart helpful.

Differing Statutory Levels of Developer Protection

  1. Basic Introduction of MA, NH and RI Condominium Acts.

The Massachusetts Condominium Act has been described by the Massachusetts Supreme Judicial Court as a primitive First Generation Condominium Act.  It has been coined an “enabling act” in which the Developer is free to be creative with little statutory control and even in some circumstances to avoid or alter statutory provisions.  Interestingly, while Massachusetts is among the most primitive acts, it probably has the strongest super lien or priority lien for collection of common expenses in the Country.

The New Hampshire Condominium Act is based loosely on the 1977 version of the Uniform Condominium Act.  It is considered a consumer protection act and has rigid developer guidelines.

The Rhode Island Condominium is the most modern of the 3 acts and is based on the 1980 Version of the Uniform Condominium and has been amended to contain additional protections.

Both the RI and NH Condominium Acts have prior acts that can apply.  In RI condominiums created before July 1, 1982 will be governed in part by the R.I. Condominium Ownership Act (which is a primitive first generation act) and in part by the R.I. Condominium Act.  In New Hampshire Condominiums created before September 10, 1977 will be governed in part by the New Hampshire Unit Owner Real Property Act and in part by the New Hampshire Condominium Act.  In both R.I. and New Hampshire, condominiums that are created under the older acts can opt in to the newer acts.  The older acts are not summarized or included herein.

The purpose of this chart is to examine how each act addresses or deals with developer issues.

[READ MORE].

GOBSMACKED, BY A MENSCH, VEL NON!

Condominium Attorney extraordinaire, Marv Nodiff from St. Louis, Missouri, who is a Member of the College of Community Association lawyers and a tireless advocate for CAI in its ongoing battle in Nevada with the Federal Housing Finance Agency over the priority lien has recently written and published his fifth novel.  This novel, like his four previous novels, is based on life in the community association world.  The title to his fifth novel struck me.  It’s called HOA Gobsmack.

I never heard the word gobsmack before.  I am reminded of the word every day I walk by Stephen Marcus’s office because he has a copy sitting on the shelf near his office.  Incidentally there is a character in the book named Stephen “Scooter” Marcus, based loosely on our Stephen Marcus.  I was gobsmacked to learn that his character is a high octane litigation associate who wears $3000 dollar suits.

But what the hell does gobsmack mean.  I asked around and people were gobsmacked to learn that I did not know what gobsmack meant.  I was gobsmacked that others had actually heard the word before.

So I googled it.  Apparently, it is a British slang, it combines the British or Scottish slang “gob”, which means mouth, together with the verb “smack”.  It means that the speaker is astonished or utterly astounded.  Urban dictionary says it means dumbfounded or shocked!  I guess Marv, like the rest of us, has been gobsmacked by HOA life before.

This is not the first time I have been gobsmacked by a word or phrase before.  A few years ago, a lawyer wrote a letter to me using the meaningless Latin phrase vel non, which means “or not”.  He kept asking me if I was going to produce documents that he wanted, vel non.  So I responded to him “vel non” 5 times, went on my merry way, wrote an article making fun of the use of vel non and tortured everyone I knew with the phrase vel non.  I even went so far to refer to a particular condominium as the Hills at Vel Non.

That was not the first time I was gobsmacked by the use of a word in the legal context.  As a young lawyer working at a small law firm in Boston, I represented a colorful Jewish developer.  He was involved in a legal battle with another Jewish real estate developer.  I was tasked with filing a lawsuit on his behalf.  In doing so I reviewed what I believed to be some nasty correspondence between the two.  My client’s adversary wrote a letter to my client in which he called him a mensch.  I was flabbergasted.  I had found my smoking gun.  How dare he call my client a mensch.  Business is business but you can’t call my client a name!  So I drafted a masterful complaint of course highlighting this offensive letter and this offensive word and left it on the chair of the partner I worked for, who of course happened to be Jewish.  I figured he would be proud of my work.

Now, before I go any further, I should explain that I am a Catholic boy from Pawtucket, Rhode Island and not terribly worldly.  I have travelled out of the country 4 times all in my youth (yes Montreal had culture and a drinking age of 18).   I should also mention that this was prior to Google and our office Internet was spotty and I think had a dial up connection.  We also did not have a Yiddish dictionary in the office.  Ok, so I was young and unsophisticated.  Since then I have gotten older.

The letter was otherwise nasty (and knowing my client), I assumed mensch was a Yiddish swear word.  Looking back I am gobsmacked that I did not do my due diligence and figure out what the word meant before I drafted the complaint, vel non!

The next morning I was met by the smiling face of the lawyer in my office who read it.  I was gobsmacked to learn that mensch was a Yiddish term that meant a good person or a person of integrity.  I was so gobsmacked that I didn’t believe him.  He laughed and laughed but I was not amused, my smoking gun was lost.  My adversary was calling my client a person of integrity and suggesting that he should do the right thing.  I was so gobsmacked that I went down to the nearby bookstore (remember those?) and found a Yiddish dictionary to check for myself.  I was gobsmacked to learn that he was right.  This changed everything, now I had to re-draft my complaint, which was now boring without that Yiddish swear word.  The second draft came out fine, vel non.  The case turned out fine, vel non.

What is amazing is that I continue to be gobsmacked by my discovery of new words in the practice of condominium law.  In a profession where every word or omitted word can be of critical importance, where a single word uttered or written can be defamatory, libelous, discriminatory and cause pain, it is nice to be gobsmacked every once in a while by the discovery of a new or different usage, vel non.  I am even more gobsmacked by the many people that I have met in the practice of condominium law, whom I would would refer to as mensch.  Now I guess I have to finish Marv’s book to find out what HOA Gobsmack is really all about, vel non.  Either way I know that the author is a mensch.

Written by Ed Allcock (eallcock@meeb.com).

Copyright © 2017 Marcus, Errico, Emmer & Brooks, All rights reserved.

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Condominium Insider ✴ Free Seminar

– TIP OF THE MONTH –

Condominium boards should update the identity of their directors, trustees or officers whenever there is a change and at least annually.  This is usually accomplished by the recording of a Trustee’s Certificate with the Registry of Deeds or updating corporate records at the Secretary of State.  MEEB prepares and records these forms regularly on behalf of its condominium clients.    

FREE MEEB SEMINAR

Thursday, August 24, 2017 at 9:30 AM

HOW TO TRANSITION A CONDOMINIUM FROM DEVELOPER CONTROL SUCCESSFULLY, EFFICIENTLY AND ECONOMICALLY IN MA, RI & NH

The program will take you through the transition process from start to finish and how to manage the same.  The focus of the program will be to teach managers and board members how to spot issues during the transition process, including: (1) expiration of or improperly exercised development rights, (2) construction defects, (3) unpaid developer common expenses, (4) unfavorable contracts or agreements or provisions, and (5) other developer issues which can be used as leverage or sources of recovery for condominium associations, as well as traps and pitfalls.  Ed Allcock brings a unique perspective as he has briefed and argued developer transition cases at the MA, RI and NH Supreme Courts, which allows him to address developer/transition nuances, differences and requirements in all 3 states for those that live and/or manage in multiple jurisdictions.  Jen and Ed have worked together on numerous transition cases and will reveal their proven strategy for resolving and settling developer transition issues quickly, efficiently and economically, which is the real hidden challenge for some boards, managers and law firms.  The program will include two handouts: (1) a developer transition issue checklist that Jen and Ed have developed and refined during their last 12 years working together and (2) Ed’s state specific transition comparison chart.  The program, materials and economic/settlement strategies will give all managers, board members and unit owners the information they need to successfully guide condominiums in MA, RI and NH through the transition process.

This Free Seminar will be conducted by MEEB’s Ed Allcock and Jennifer Barnett.

This Free Seminar is being held on

Thursday, August 24, 2017 at 9:30 AM

(Registration at 9:00 AM)

at the offices of

Marcus, Errico, Emmer & Brooks, P.C.

45 Braintree Hill Office Park, Suite 107

Braintree, MA  02184

Refreshments will be served.

Space is limited.  To reserve your seat [click here].

PAMELA JONAH JOINING MEEB

MEEB would like to welcome Pamela Jonah who will be joining the firm as a partner on August 1st.  Pam has extensive experience representing condominium associations in all aspects of condominium law.  Pam has experience with general condominium matters, condominium lien enforcement and condominium loans.  Pam was admitted to pratice law in Massachusetts in 1994 and most recently worked with the law firm of Goodman, Shapiro & Lombardi, LLC.  You can reach Pam Jonah by emailing her at pjonah@meeb.com.

IS YOUR CONDOMINIUM ASSOCIATION ADEQUATELY INSURED?  AN OUNCE OF STEPHEN MARCUS IS THE PREVENTION TO THE LITIGATION CURE
By Ed Allcock

With all of this talk in the news about healthcare and insurance, I am reminded that prevention is always better than the cure.   As a condominium litigator, I am often seeking a “cure” for our clients of something that could have been prevented.  Condominium insurance can be just as tricky and controversial as health insurance.

Insurance is typically one of the highest budgeted item for condominium associations.  Because of this, condominium boards are often looking for a way to cut that cost in order to keep monthly expenses down.  Unlike the current healthcare proposal, condominium board’s cannot eliminate insurance entirely, but they can do damage.  Condominium boards need to be careful what they cut you cut or don’t have in the first place.

I have been involved in two lawsuits where substantial portions of the condominium have burned down.   In both cases the condominium had insurance to reconstruct the building in a stated dollar amount.  In both cases, the condominiums had a significant shortfall because neither condominium had adequate demolition coverage or ordinance of law coverage.  In one of the two cases, the board was significantly underinsured because an agent had typed the wrong square footage into the insurance valuation program, which in turn spit out the wrong replacement cost value.  Making matters worse, that agent happened to be a board member, to whom the issue of procuring adequate insurance had been delegated.

While the ensuing litigation by those two condominium associations was painful and expensive for those two boards, all those associated with it learned a great deal.  What I learned is knowledge of insurance is worth a pound of litigation.

You would think that the cost to demolish a burned down and water logged (from the fire department) building would be included in the cost of rebuilding a condominium.  No so.  Demolition coverage is an extra policy endorsement.  It can be very expensive to demolish a building or a portion thereof.  Recently a brand new 83 unit condominium complex in Dorchester was gutted by fire and smoke and then doused with water and foam from the fire department.   The cost to demolish that building is astronomical.  Demolition does not just involve tearing down the building and removal of materials but also things like protective fencing and police details.  It costs money to throw stuff away now, especially if its contaminated, which is often the case after a fire.

In both of my cases, the fire and subsequent rebuild implicated certain code upgrades when the condominium decided to reconstruct their building.  In one case the Condominium was required to install elevators, which did not previously exist.  The other involved the installation of a sprinkler system.  Both very large expenses.  These expenses are also not covered by the property and casualty coverage, but are also a separate endorsement known as law and ordinance coverage, which pay for upgrades required by subsequent enactments or law or zoning and building codes.

My takeaway from this litigation is that both of these condominiums could have been served by my Partner and noted condominium insurance guru Stephen Marcus.  These extra coverages are not that expensive but the average person does not know about them, unless they learn about them somehow like I did.  I tell condominium boards and homeowners all the time, for the most part they don’t want to deal with me, because usually when they are dealing with me, it involves a lawsuit.

Much of my education in condominium law and practice comes from lawsuits, after the fact.  Stephen Marcus on the other hand has spent 40 plus years learning, living and building much of this stuff from the ground up.  I like to call him the “insurance whisperer”.  Stephen is a firm believer that every condominium’s current insurance policies and coverages should be reviewed annually.  In fact, many condominium documents require that the property be appraised annually to ensure the property and casualty insurance is sufficient, however very few condominiums actually do this.

The obvious items to check for are: (1) is the policy adequate to pay for a rebuild in the event of a total loss, (2) does the condominium have demolition coverage, (3) does the condominium have ordinance of law coverage.  Sometimes you can eyeball and just tell its not enough or not there.  Other times its more subtle.  Less obvious items are fidelity coverage, directors and officer’s coverage and flood insurance.  Taking those in turn regarding the policy amounts, Stephen will review whether your policy is guaranteed replacement cost or a set figure and whether you have the additional coverages (demolition and ordinance of law) discussed above and whether your coverages actually comport with the insurance provisions of your condominium documents.

The condominium documents are an important part of this process, as most condominium documents require the procurement of certain minimum coverages and coverage of certain portions of the property.  Most of these documents are outdated and do not recognize some of the special policy endorsements outlined above.  Many documents do not require unit owners to carry their own H-06 policies.  Some documents might not even require 100% or guaranteed replacement cost.  Steve would even tell you that statutory minimums (for example fidelity policies by statute only require a limit of one fourth of the total budget, G.L. c. 183A § 10(h), yet sometimes board members and managers are dealing with and have access to 10 times that amount of money (if for example there is a loan or legal settlement or high reserves).  The insurance should be comport with the risk not just meet an arbitrary statutory minimum.

Now you might ask who cares what the documents say?  I am just going to go to my insurance agent and get what I need.  Well first of all, insurance agents often look at your condominium documents to tell you what you need.  Secondly, board members often follow the same path.  You can have the smartest and best board that goes above and beyond and makes sure that the condominium is adequately insured over and above what is provided in the documents.  But the next board comes along and is looking to lower condominium fees (remember how this article started), so they look to save on insurance premiums and eliminate coverages.  Condominium boards are like Presidents some are good, some are bad and regardless they all have different agendas, hence the checks and balances in our government.  So how do condominium’s make sure they are protected from the changing tides of political whims going forward?  An ounce of prevention.  That is where Stephen Marcus comes in.

Send your insurance declaration page to Stephen Marcus and have him review it and compare it with your condominium documents.  Stephen understands insurance coverages and beyond.  He has spent hours with insurance professionals discussing things like bare walls coverage and obscure exclusions contained in directors and officer’s policies, he knows the insurance industry, how they view certain condominium claims and how certain insurance companies treat certain claims.  Its sensible preventative maintenance.

Stephen will review and compare your coverages with the insurance provisions in your condominium documents.  He might recommend additional coverages.  He might have your consult with an agent regarding dollar amounts of coverages and/or even shop policies to compare exclusions if your community is at a higher risk for a particular kind of loss.  He might recommend changes in your documents to protect the community going forward.  An ounce of Steve’s years of experience in the condominium arena is far better than the pound of cure, which like most “cures” is uncertain and costly especially when it takes the form of litigation to recover insurance shortfalls.  While I love being in the courtroom and advocating for condominium boards, I know that spending a few hundred dollars on an annual insurance checkup is much better than spending thousands of dollars on insurance shortfall recovery litigation.  A checkup is better than surgery any day of the week.  Come on in and see Steve Marcus for your annual insurance checkup today.

If you want MEEB to review your insurance declaration page and insurance provisions of your condominium documents please contact Stephen M. Marcus at smarcus@meeb.com.

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Condominium Insider –

MASSACHUSETTS SUPREME JUDICIAL COURT RULES THAT INSURER HAS NO OBLIGATION TO PAY LEGAL FEES ASSOCIATED WITH COUNTERCLAIMS

The Massachusetts Supreme Judicial Court ruled that “Where an insurance policy required the insurer to defend any claim initiated against the insured, the insurer’s duty to defend did not require it to prosecute affirmative counterclaims on behalf of its insured.”

Insurance defense is often sought in condominium litigation.  When an insurer defends the lawsuit, it is obligated to pay counsel fees to defend the lawsuit.

However, until now, it has not been clear whether the insurer was also required to pay for the attorney to prosecute a counterclaim.

It is not uncommon that a condominium that gets sued might have a countersuit against the party that brought the lawsuit.  The Massachusetts Rules of Civil Procedure require that any countersuit that arises from the same operative facts must be brought in response to the lawsuit or be forever lost.  This is known or referred to as a compulsory counterclaim.

Some lawyers have taken the position that if the countersuit is compulsory, then the insurer should have to pay for the countersuit if it is defending the original lawsuit.

In the case of Mount Vernon Fire Insurance Company v. Visionaid, Inc., SJC-12142 (June 22, 2017), the insurer balked at that proposition.  The case was being litigated in Federal Court and the First Circuit Court of Appeals referred the question to the Massachusetts Supreme Judicial Court.

The Court ruled 5-2 that the insurer does not have to pay for the prosecution of the counterclaim.

The Court’s holding was:

“We conclude that (1) an insurer with a contractual duty to defend an insured is not required to prosecute an affirmative counterclaim on the insured’s behalf, pursuant either to the contractual language in the policy at issue or the common-law ‘in for one, in for all’ doctrine; (2) the duty to pay defense costs has the same scope as the duty to defend, and thus does not require an insurer to pay the costs of prosecuting a counterclaim on behalf of the insured; and (3) because of our answers to the first two questions, we do not reach the third question.”

However, Justice Gants and Justice Lenk dissented.

Gants, C.J., with whom Lenk, J., joins. “… Where the insured’s defense is intertwined with a compulsory counterclaim, where any reasonable attorney defending that proceeding would bring such a compulsory counterclaim, and where the insured agrees that any damages awarded to the insured on that counterclaim will offset any award of damages against the insured that the insurer is required to indemnify, I conclude that an insurer’s duty to defend the insured in ‘any proceeding’ includes the duty to prosecute such a compulsory counterclaim. …

“We have held under our so-called ‘in for one, in for all’ rule that, where a proceeding includes one cause of action alleging a wrongful act covered under a general liability policy, an insurer’s duty is not limited to defending that specific cause of action but encompasses the duty to defend the insured against all the causes of action in that proceeding. …

“The same reasoning that yielded the ‘in for one, in for all’ rule compels the conclusion that the insurer’s duty to defend a proceeding includes an obligation to prosecute compulsory counterclaims that are intertwined with the insured’s defense, where any reasonable attorney defending that proceeding would bring such a compulsory counterclaim, and where the insured agrees that any damages awarded to the insured on that counterclaim will offset any award of damages against the insured that the insurer is required to indemnify. …”

While the dissent was persuasive, it is not the law, though it could signal a change in this holding in the future depending on the composition of the court.

The case is important to condominiums, condominium litigators and their insurers.

Going forward this case will play a strategic role on whether or not condominiums want to or decide to pursue counterclaims in condominium lawsuits.  If they decide to pursue counterclaims, the condominiums and their counsel will need to separate and designate their billing between the lawsuit and counterclaims.

For a copy of the Opinion [click here].

Any questions regarding this article please contact Ed Allcock at eallcock@meeb.com.

THE RHODE ISLAND CONDOMINIUM ACT HAS BEEN AMENDED AGAIN!

The amendment which was signed by the governor on June 29, 2017 takes effect immediately.  The new legislation allows a unit owner to obtain a written copy of any insurance company damage appraisal or any damage appraisal (regardless of who prepares it) in regard to a casualty loss/damage to a unit.  The legislation requires a condominium board to provide this information/documentation within 14 days of the request.  The legislation also entitles a unit owner to any determination by the board or the insurer that the damage is not covered by insurance or is below the deductible of the condominium’s master policy. The legislation was supported by the CAI Rhode Island Legislative Action Committee.

The legislation has been codified at Section 34-36.1-3.13(2)(d)(i) of the Rhode Island Condominium Act.

All Rhode Island condominium board and managers should be aware of this new law and the affirmative obligation to provide information upon request.

For a copy of the changes [click here].

Any questions regarding this article please contact Ed Allcock at eallcock@meeb.com.

NEW HAMPSHIRE AMENDS CONDOMINIUM ACT

The NH legislature’s tweaks and additions to the NH Condominium statute have continued in 2017 with the passage of House Bills 501 and 502.  Both bills go into effect on August 15, 2017.  What follows is a brief summary of the new legislation.

HB 501:  Section 37(VI) of the NH Condominium Statute (RSA 356-B) was amended to require that an “electronic or paper copy of all meeting minutes” be made available to all owners for at least 3 years from the date of such meeting.  Additionally, the Board is required to respond to an owner’s request for a copy of the minutes (paper or electronic) within 15 days of the request.

Note that the statute already requires that meeting minutes be available to owners within 60 days of the meeting or 15 days of the date such minutes are approved by the Board, whichever occurs first.  Therefore, if an owner requests a copy of the minutes only 5 days after the meeting, they need not be provided to that owner until approved or within 60 days of the meeting, whichever occurs first.

HB 502: This bill creates a brand-new section 37-e to the NH Condominium Statute concerning the disclosure of financial information and meeting minutes to unit owners.  Again we see efforts by the legislature to make Board business more transparent and to empower owners through the flow of information from the Board.  The unfortunate by-product of that legislative effort, however, is even more requirements and burdens upon board and management.

In particular, this new law requires Boards to do the following:

  1. Create a profit and loss statement that must be available to unit owners 30 days prior to the annual meeting.  The format of such profit and loss statement must remain constant from year to year (I suggest sending a copy with the annual meeting notice assuming you can send it 30 days in advance of the meeting)
  2. Provide access to unit owners to “all financial information” within 15 days of the owner’s request regarding any “contracts, mortgages, loans, and the terms of such loans, and any outstanding debts and balances of all accounts held by the Association”.  The Association need not provide information on the individual unit owners’ accounts—i.e., which owners are delinquent—unless a lien has been recorded against that owner.  The Association is thus required to disclose, upon request, owners who have had a lien recorded against their unit.  The statute does not specify how one discloses this unit owner’s account to a requesting unit owner so I suggest that a copy of the lien be provided.
  3. Provide access to the “names of all employees of the associations and the salaries paid to employees with association funds, including any third party arrangements for services”
  4. Disclose if any employee is related to a board member.  Disclosure to occur at the next annual meeting.

The association or management may charge a fee to owners who request such information beyond the last 3 fiscal years.  It is therefore of the utmost importance to keep 3 years’ worth of financial information readily available so that such requests can be responded to with a minimal amount of man hours devoted to the task.

If there is one benefit to Associations via HB 502, it is that meeting minutes may be emailed or published on the association’s website as a means of compliance.  Meeting minutes may further be approved by Board members through electronic means such as email or video chat.

For a copy of House Bill 501 [click here].
For a copy of House Bill 502 [click here].

For any questions regarding this article, please contact Dean Lennon at dlennon@meeb.com.

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There is still time to sign up for our free Seminar

UNDERSTANDING CONDOMINIUM MASTER INSURANCE POLICIES: YOUR ASSETS MAY BE ON THE LINE

This 90-minute Free Seminar is being held on

Wednesday, June 14, 2017, at 9:30 AM

(Registration at 9:00 AM)

 50 Braintree Hill Office Park

2nd Floor Conference Room

Braintree, MA  02184

Refreshments will be served.  Space is limited.

To reserve your seat for the Seminar [click here].

______________________________________

Condominium Insurance is the least understood issue about condominiums for all but the one with the greatest chance of a catastrophic loss.  Managers and boards must learn how to effectively use the insurance professionals and condominium attorneys to participate in the selection of a superior policy both in terms of types of insurance and amounts of insurance.

Not all condominium master insurance programs or agents are created equal.  Learn the key components of a professional master insurance program and how to coordinate the master policy with the unit owner policy.

This free seminar will be conducted by MEEB’s Stephen Marcus and Robert Masse of WTPhelan Insurance Agency.

TIP OF THE MONTH

When a casualty loss occurs the managing board should work to ensure that the insurance carrier properly adjusts the loss.  A good practice of avoiding further disputes about the loss proceeds and adjustment is for the Association to require that a release be signed before it releases proceeds for the loss.  Requiring a release is not only lawful, but is one of the best ways to help protect the Association from further liability following a loss.

SJC REDEFINES THE LEGAL TEST FOR ANTI-SLAPP SUITS

SLAPP stands for strategic lawsuit against public participation and the Anti-SLAPP law is codified under M.G.L. c. 231, s.59H. The purpose of the law is to prevent a person or business from suing someone for the sole reason of trying to silence that person’s petitioning activity.  For example, a group of protestors consistently rail against the local Board of Selectman as the protestors believe the Board is corrupt and engaged in self-dealing.  In response, the Board of Selectman brings a frivolous lawsuit against the protestors making meritless allegations and claims.  Here, the lawsuit is clearly a means to try to silence the protestors and shut down their public outcry against the Board members.  In such a case, the protestors would file an Anti-SLAPP special motion to dismiss in Court in order to get the Selectmen’s suit dismissed. The Supreme Judicial Court (“SJC”) has just issued a decision changing the legal test of review of special motions to dismiss under the Anti-SLAPP statute.  But first, some important background.

For many years, the legal standard for Anti-SLAPP cases was set forth in the case of Duracraft v. Holmes Prods. Corp., 427 Mass. 156 (1998).  The Duracraft test worked as follows:

  1. The moving party (typically the Defendant) must make a threshold showing that the claims against it are based-on the petitioning activities alone and have no substantial basis other than the petitioning activities. Essentially this means that the Plaintiff’s case was filed solely in response to, or aimed at, the petitioning activity.
  2. If the moving party can make that showing, the non-moving party (typically the Plaintiff) must then establish “by a preponderance of evidence that the Defendant lacked any reasonable factual support or any arguable basis in law for its petitioning activity” and that the petitioning activity caused them harm.

[READ MORE]

CONDOMINIUM ASSOCIATIONS AND DEVELOPERS OFTEN GET INTO ZONING DISPUTES AND ZONING RELATED LITIGATION

Recently, the Massachusetts Legislature enacted and Gov. Baker signed into law several important changes to the Massachusetts Zoning Act, General Laws chapter 40A, and the Smart Growth Zoning and Housing Production Act, General Laws chapter 40R.

Summaries of these amendments are as follows:

  • New Starter Home Initiative. Sections 37 through 54 of Chapter 219 of the Acts of 2016, St. 2016, Ch. 219, amend General Laws chapter 40R, Smart Growth Zoning and Housing Production, by creating a new “Starter Home” program. Municipalities can now create Starter Home Districts on land areas greater than three (3) acres with a minimum density of 4 units per acre and dimensional zoning requirements that may differ from the underlying zoning which emphasize cluster development, common open space and low-impact development techniques. Homes may be no larger than 1850 SF and at least 50 percent of the units must have three (3) bedrooms. Communities establishing a Starter Home district will be eligible for incentive payments from the state for the creation of the district and housing within the district. At least 20 percent of the homes in the district must be affordable and occupied by households with incomes at or below 100% of Area Median Income. The new Starter Home law provides developers and communities with a much needed tool to provide desperately needed workforce housing. Under Section 140 of Chapter 219 the Starter Home law takes on January 1, 2017. Efforts are underway to create implementing regulations.
  • Lengthened Building and Special Permit Immunity to Zoning Change. Prior to the recent approval of Section 29 of Chapter 219 of the Acts of 2016, St. 2016, Ch. 219 , General Laws chapter 40A, § 6, provided that the recipient of a Building or Special Permit who failed to begin construction or use within six (6) months must conform to subsequent zoning amendments. Typically, such zoning changes are aimed at undermining the proposed project which is the subject of the permit. The Act doubles the time within which the permittee can commence construction or operations under the Building or Special Permit from six (6) months to twelve (12) months. This lengthier period provides developers with additional time to obtain financing or secure other necessary approvals and begin construction or use without fear of a zoning change that might otherwise nullify the project. Since the Act was approved by the Governor with an Emergency Preamble, this law immediately took effect on August 11, 2016.

[READ MORE]

MEEB IS PLEASED TO ANNOUNCE 3 NEW ATTORNEYS HAVE JOINED THE FIRM

Amie is an associate in the firm’s litigation department. She focuses her practice on condominium and real estate litigation. Prior to joining the firm, Amie worked at a Newton law firm for over 10 years where she represented lending institutions in a variety of litigation matters in Massachusetts and New Hampshire. Amie has considerable experience in real estate titles, foreclosures, summary process eviction actions, and lien enforcement matters.

NORMAN ORBAN

Norman is an associate in the firm’s Litigation Department. He joined the firm in 2017 and focuses his practices on condominium, real estate and construction litigation. Prior to joining the firm Norm worked in a Braintree law office focusing on contract disputes, business litigation and construction litigation.

WILLIAM GOSZ

Bill has over 15 years of experience as real estate attorney concentrating in all aspects of real estate conveyancing, development, and acquisition matters, including title insurance and the identification, evaluation and resolution of title issues. Bill has extensive experience drafting and reviewing commercial leases for landlords and tenants, drafting and reviewing commercial loan documents, negotiating commercial purchase and sale agreements, property management agreements, service contracts and other diligence items.

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FREE MEEB SEMINAR

FREE MEEB SEMINAR
______________________________________


UNDERSTANDING CONDOMINIUM MASTER INSURANCE POLICIES: YOUR ASSETS MAY BE ON THE LINE

Condominium Insurance is the least understood issue about condominiums for all but the one with the greatest chance of a catastrophic loss.  Managers and boards must learn how to effectively use the insurance professionals and condominium attorneys to participate in the selection of a superior policy both in terms of types of insurance and amounts of insurance.

Not all condominium master insurance programs or agents are created equal.  Learn the key components of a professional master insurance program and how to coordinate the master policy with the unit owner policy.

This free seminar will be conducted by MEEB’s Stephen Marcus and Robert Masse of WTPhelan Insurance Agency.

This 90-minute Free Seminar is being held on
Wednesday, June 14, 2017, at 9:30 AM
(Registration at 9:00 AM)

 50 Braintree Hill Office Park
2nd Floor Conference Room
Braintree, MA  02184

Refreshments will be served.
Space is limited.  To reserve your seat for the Seminar
[click here].

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CALL TO ACTION: RI LEGISLATION

CALL TO ACTION:  RHODE ISLAND LEGISLATION

Dear CAI members:

The Rhode Island House will consider a bill next week that may lead to significant increases in your assessments, weaken your association’s ability to enforce its rules, all while possibly gratifying those in your community that fail to abide by your governing documents. HB 5097 will have no positive effect on Rhode Island condominium associations. The CAI Rhode Island LAC and New England Chapter respectfully ask that you contact your Representative and ask them to VOTE NO on HB 5097.

CAI supports of effective, efficient and economical ways of resolving disputes within condominiums. Unfortunately, HB 5097 will force ALL associations and unit owners to use arbitration to decide disputes. Further, as drafted the legislation allows the losing party to opt out of the arbitration following a decision by filing a jury claim with the court.

While many associations chose to adopt arbitration provisions. This legislation will unconstitutionally (state and possibly U.S.) deny owners and associations the fundamental right to the Court system and force your association to rewrite private contracts.

The bottom line is:

  • HB 5097 may increase your assessments: Arbitrators in the states range between $200-400 an hour per party, and involve several stages taking at least 15 hours. That means even the garden-variety dispute may cost upwards of $5,000, not including legal expenses, for an arbitrator to render a non-binding decision. Fees in your association’s budget will increase and the cost will be borne by all assessment-paying owners. Mandatory non-binding arbitration will only impose another (costly) step in the process of resolving a dispute.
  • HB 5097 will weaken your association’s ability to enforce its governing documents: The bill restricts the term “dispute” to include, among other provisions, the authority of the board to require any owner to act or not act involving the owner’s unit. The potentially lengthy and costly proceedings will deter your board from enforcing the association’s rules.
  • HB 5097 provides the opportunity for disgruntled owners to engage the association in a “gotcha” game: The bill could be used as a delay tactic by parties to stall judicial resolution of disputes. The mandatory non-binding process in this bill would force associations that currently require binding arbitration to go through the non-binding process. The additional process will not only delay enforcement, but cause additional legal fees and drain association funds.

Please email or call your local Representative and tell them you are opposed to HB 5097.

Sincerely,

CAI Rhode Island Legislation Action Committee

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Condominium Insider –

– TIP OF THE MONTH –

The common areas and facilities, including land, buildings and recreational facilities,  of a condominium are not taxable parcels of property, so Condominium Associations should not be receiving  or paying real estate tax bills for  common areas and facilities of a condominium.  If for some reason a bill is received, you should contact the municipality and your lawyer immediately so you can proceed with an abatement application.

MEEB’S ED ALLCOCK ARGUES CONDOMINIUM CASE AT NEW HAMPSHIRE SUPREME COURT

On March 30, 2017, MEEB’s Ed Allcock argued a case involving development rights and how they are interpreted under the New Hampshire Condominium Act at the New Hampshire Supreme Court.  The case involves the time to complete phased property in New Hampshire as well as the meaning of the term “substantial completion” under the Act.  The Community Association Institute of New England decided the case presented such significant legal issues that it submitted an Amicus (friend of court) Brief which was prepared by Rob Anctil and Scott Eriksen of Perkins & Anctil.  We expect a decision sometime in the next 90 days and we will keep you updated.

To view Ed’s oral argument please [click here]. 

MEEB’S RICHARD BROOKS APPEARS ON NESN’S DINING PLAYBOOK WITH HIS DAUGHTER AND KISS 108’S BILLY COSTA

A serious meal is sometimes better than a serious legal issue.  MEEB attorneys don’t just argue cases at the Supreme Court.  They need to eat too.  Richard Brooks and his beautiful daughter, Samantha Brooks, who is enrolled at Boston University, did just that and were recently featured on a segment with Billy Costa for NESN’s popular Dining Playbook series.  Richard and Samantha are naturals on the camera, as they visit three different restaurants on Boylston Street.  Richard of course promoted his burgeoning social media presence on the show.  You can follow Richard on Instagram @richardbrooks59.

To view the video [click here].

CYBER – EQUIVALENT TO LEAVING A CLAIM FILE ON A BENCH IN A PUBLIC SQUARE

The U.S. District Court Western District of Virginia Abingdon Division recently decided that an insurance company had waived attorney client privilege when an investigation placed materials on a public drop box type of site, that was not password protected.  An excerpt from the case follows:


Excerpt

In an effort to share information electronically, Thomas Cesario, a Senior Investigator for Nationwide Insurance Company, (“Nationwide”), which owns Harleysville, uploaded video surveillance footage of the fire loss scene, (“Video”), onto an internet-based electronic file sharing service operated by Box, Inc. Cesario then sent an email containing a hyperlink to the Box, Inc., internet site, (“Box Site”), by which Wes Rowe of the National Insurance Crime Bureau, (“NICB”), could access the file containing the Video using the internet and download the Video. The Video was placed on the Box Site, and the hyperlink to the Box Site sent by email to Rowe on September 22, 2015. The email to Rowe stated: “Here is the link to access the video” and provided the hyperlink. The email also contained the following statement:

Harleysville concedes that any person who used the hyperlink to access the Box Site had access to the electronic information stored there. The information was not password protected. Harleysville also concedes that any person who had access to the internet could have accessed the Box Site by simply typing in the url address in a web browser.

Based on these facts, I find that Harleysville has waived any claim of attorney-client privilege with regard to the information posted to the Box Site. It has conceded that the Box Site was not password protected and that the information uploaded to this site was available for viewing by anyone, anywhere who was connected to the internet and happened upon the site by use of the hyperlink or otherwise. In essence, Harleysville has conceded that its actions were the cyber world equivalent of leaving its claims file on a bench in the public square and telling its counsel where they could find it. It is hard to image an act that would be more contrary to protecting the confidentiality of information than to post that information to the world wide web.


The moral of this story for Condominiums?  Protect attorney-client communications.  While Boards, managers and attorneys now use Dropbox type sites in connection with large cases and discovery requests, the parties need to ensure that these exchanges and sites are password protected in order to prevent loss of attorney-client privilege.  If a Board loses its attorney-client privilege, it might as well deliver the privileged documents and information to the other side.

To read the Memorandum Opinion on Harleysville Insurance v. Holding Funeral Home, Inc. [click here].

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