By Howard Goldman –
With the rising cost of real estate and lack of affordable housing in many communities, people are searching for ways to maximize their investment through shared living. Whether it be by including an in-law suite for an aging parent, a basement apartment for a long-term tenant or sprucing up a guest room to rent via AirBnB, many homeowners are embracing shared living as the way of the future.
Shared living arrangements provide many benefits to individual homeowners but may be bothersome to neighbors who are worried about health and safety, parking, and security risks. These concerns are compounded in the condominium setting where there are so many people living in a condensed area.
Recently, Goldman & Pease has handled a number of disputes arising out of shared living arrangements in smaller condominiums that are self-managed. This article will discuss issues related to shared living arrangements in the condominium context and the rights and obligations of unit owners and trustees with respect to striking a balance between allowing unit owners freedom to use their homes as they see fit and protecting the condominium community from the risks associated with certain shared living arrangements.
Issues Related to Shared Living Arrangements in Condominium
In one recent case, we represented a unit owner in a two-unit condominium who was seeking to prevent the other unit owner from renting out a portion of his unit to a tenant. Specifically, the other owner’s unit was comprised of the basement and first-floor of a four-story Condominium building and he proposed to rent the basement to a tenant. The basement did not contain a bathroom or kitchen and the unit owner suggested that the tenant could share the bathroom and kitchen on the first floor of the unit.
This scenario is problematic for a number of reasons. First, there are obvious health and safety issues that arise from renting an “illegal” basement apartment, including but not limited to, health concerns related to the lack of running water and a bathroom in the basement and safety concerns associated with ensuring that the basement is properly heated and includes working fire and carbon monoxide detectors. Second, our client was concerned that parking would become more challenging at the Condominium with an extra tenant residing in the building. Finally, and most importantly, our client had serious concerns regarding the insurance implications of allowing the shared living arrangement at the Condominium.
Fortunately, the Condominium’s Master Deed prohibited more than two unrelated individuals from residing in a Unit and the Declaration of Trust prohibited unit owners from renting only a portion of their units. Additionally, this particular basement apartment was prohibited by state and local zoning, sanitary and building codes. Consequently, our client opposing the shared living arrangement had a solid argument to prevent the other unit owner from renting out the basement level of his unit.
However, this is not always the case. Next, we will address the rights and obligations of the unit owners and Trustees with respect to disputes that arise over shared living arrangements.
Rights and Obligations of Unit Owners and Trustees
Unit owners are generally allowed to use their individual units and any exclusive use common areas of the Condominium as they see fit, provided that there are not rules in the Condominium’s governing documents prohibiting such use. With respect to shared living arrangements, many Condominiums have governing documents that prohibit short term rentals or renting a room in a unit.
When a unit owner violates one of these provisions, it is the responsibility of the Trustees to enforce the rules governing the Condominium. In fact, the Condominium statute, M.G.L. c. 183A, specifically states that enforcement of the Condominium’s By-laws, rules or restrictions in the Master Deed is the exclusive obligation of the Trustees and not the individual unit owners. Depending on how the Condominium documents are written, the Trustees typically have the authority to assess fines for non-compliance and ultimately to assess enforcement costs against the delinquent unit owner.
Sometimes, however, the Trustees fail to enforce the rules for one reason or another. In that case, an aggrieved unit owner is not without recourse. Instead, the aggrieved unit owner may proceed with a derivative action against the Trustees pursuant to Mass. R. Civ. P. 23.1. The purpose of a derivative action is to seek an order from the Court that the Trustees be required to enforce the Condominium’s rules and regulations.
In a recent derivative action case, the Massachusetts Appeals Court awarded attorney’s fees to the aggrieved unit owner that initiated the derivative action because the unit owner “vindicated the condominium board’s rights and the statute allows the assessment of attorney’s fees in such matters.” See Calvao v. Raspallo, 92 Mass. App. Ct. 350, 354 (2017). This recent ruling provides incentive for unit owners to seek enforcement of the Condominium’s rules and regulations when the Trustees fail to enforce the rules themselves.
Striking a Balance
Whenever possible, the Trustees and unit owners should come together in an effort to strike a balance to reflect the will of the homeowners. A small condominium owned by three investors may seek to remove the standard provision banning short term rentals, given the option of maximizing his investment through AirBnB. However, that same condominium should be careful to require that any revisions require unit owners to comply with all local zoning laws and regulations applicable to short term rentals, as many communities have recently implemented legislation limited short term rentals or requiring homeowners to obtain licensure prior to renting their home to a short term renter.
Alternatively, owner-occupied condominiums may want to strengthen their Condominium documents with respect to short and long-term rentals, in order to effectively prohibit all short-term rental arrangements or renting out a portion of a unit to a third-party tenant. It is important that any policy be voted on at a duly noticed unit owner meeting in order to provide a basis for future enforcement of violation of the policy.
About the Author
Attorney Howard S. Goldman is the founding partner of the law firm of Goldman & Pease LLC, 160 Gould Street, Needham, Massachusetts 02494 (781) 292-1080. Mr. Goldman concentrates his practice in the areas of real estate, finance, and civil litigation, where he represents property managers, lending institutions, developers, and contractors for more than thirty years. He is an active member of the Massachusetts, Norfolk, and Rhode Island Bar Associations in his field and is also an active member of CAI and IREM, where he frequently lectures and writes columns affecting the real estate and finance industries. Mr. Goldman serves as a member of the Zoning Board of Appeals for the Town of Needham and as a court appointed mediator at the Boston Municipal Court and as a pro bono advocate at Federal District Court mediations.
