88 N.E.3d 1142
Mass.2018Background
- Cambridge Point Condominium Trust (trustees) sued the condominium developers for widespread construction and design defects in common areas after discovering leaks and mold and estimating >$2M in repairs.
- The condominium bylaws (§1(o)) give the board power to conduct litigation involving common areas but condition initiation of any suit against non–unit owners on written consent of at least 80% of all unit owners within 60 days, delivery of the proposed complaint to owners, and immediate special assessment of estimated legal fees.
- The developers and affiliates retained more than 20% of unit ownership, meaning they could block an 80% consent requirement and thus prevent the trustees from suing them; prolonged retention could run statutes of repose/limitations.
- Trustees filed suit without obtaining 80% consent and sought a declaratory judgment that §1(o) is void; lower courts denied declaratory relief and dismissed the complaint for failure to obtain the 80% consent.
- The Supreme Judicial Court granted direct review and considered (1) whether the Condominium Act forbids bylaws requiring owner consent to litigation and (2) whether §1(o) is void as contrary to public policy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Condominium Act prohibits bylaws requiring unit‑owner consent before trustees may initiate litigation | The Act vests exclusive authority to litigate common‑area claims in the trustees, so any bylaw requiring owner consent to sue conflicts with the Act | The Act is enabling and permits bylaws governing management; nothing in the Act expressly forbids owner‑consent requirements for litigation | Not per se prohibited: the Act does not automatically invalidate every owner‑consent bylaw; bylaws not inconsistent with the Act may be valid |
| Whether §1(o) is void as contravening public policy because it effectively prevents litigation against developers | §1(o) effectively shields developers (who retained >20% interest) from suit, denying redress for habitability and safety defects and undermining public policy protecting housing safety | §1(o) was disclosed in recorded condominium documents; purchasers should know/manage their expectations; consenting governance provisions are permissible | Void for public policy: because §1(o) makes litigation extraordinarily difficult or impossible and hides that practical effect from purchasers, it contravenes public policy favoring safety, habitability, and nonwaivable remedies |
Key Cases Cited
- Berish v. Bornstein, 437 Mass. 252 (condominium trust has exclusive authority to sue regarding common areas; implied warranty of habitability attaches to sale of new condo units)
- Strauss v. Oyster River Condominium Trust, 417 Mass. 442 (only trustees may conduct litigation concerning common areas)
- Albrecht v. Clifford, 436 Mass. 706 (implied warranty of habitability applies to sale of new homes by builder‑vendors and cannot be waived)
- Beacon Hill Civic Ass'n v. Ristorante Toscano, Inc., 422 Mass. 318 (contracts/clauses may be unenforceable if they contravene clear public policy)
- Miller v. Cotter, 448 Mass. 671 (public‑policy exception requires clear legislative or judicial grounding)
- Barclay v. DeVeau, 384 Mass. 676 (absent overreaching or fraud, developer and owners may agree on condominium administration; overreaching invalidates such agreements)