JOAN C. BANNERMAN, TRUSTEE OF SPRUCE REALTY TRUST v. TOWN OF ROWLEY.

This case raises, apparently for the first time in Massachusetts, the validity of a zoning by-law designed through indirection to bar condominiums throughout the town. I hold such a prohibition to be invalid and without the Enabling Act, General Laws, c. 40A, inserted by St. 1975, c. 808 §3. A serious question also exists as to whether such a prohibition would not likewise be invalid as an unreasonable exercise of the police power, but I do not find it necessary to reach this question in the view which I have taken of the case.

The complaint was filed on April 17, 1979 by the plaintiff, Joan C. Bannerman, Trustee of Spruce Realty Trust (the "Trust") against the defendant, Town of Rowley (the "Town"), alleging that the Town's zoning by-law restricts the ownership and not the use of real estate within the Town and accordingly exceeds the authority conferred by G. L. c. 40A and also is an illegal restraint on alienation. While the complaint does not spell out the statutory provisions pursuant to which it was filed, jurisdiction of this Court is grounded on G. L. c. 185 §1 (j 1/2) and c. 240 §14A. The defendant admits in its answer that the Rowley zoning by-law prohibits condominiums within the Town and claims that such prohibition is a proper exercise of the zoning power. The Town further alleges that the plaintiff's predecessor agreed not to convert his apartment units to condominiums.

A trial was held at the Land Court on December 9, 1980 at which a stenographer was appointed to record the testimony. All exhibits introduced into evidence are incorporated herein for the purpose of any appeal. After the pleadings were completed, the plaintiff filed a Motion for Summary Judgment which was denied on September 2, 1980 on the grounds that there are issues of material fact first to be determined.

On all the evidence I find as follows:

1. Sidney J. Rosenthal ("Rosenthal"), a predecessor in title of the plaintiff and a beneficiary of Spruce Realty Trust, had made a mortgage loan to the original developer, and in the course of the salvage operation found it necessary to foreclose the mortgage which he held on the premises.

2. The Planning Board raised a question at this time, 1973-1974, as to whether the building under construction on Lot B with an "L" shape configuration constituted one building or two. Lot B is shown on Exhibit No. 9, Lot A thereon not having been built upon as yet.

3. Rosenthal was under pressure at this time to move forward with the project since he faced a potential loss of his insurance coverage and other problems with the cessation of construction.

4. Rosenthal and the Planning Board executed an agreement dated March 21, 1974 (Exhibit No. 8) which is silent on the subject of condominiums. A prior draft was introduced as Exhibit No. 15. The later agreement relating to the subdivision shown on said plan and to Lot A was finalized in January of 1975. The Town contends that prior to the issuance of the necessary permits Rosenthal agreed not to build condominiums nor to convert the town houses [Note 1] he was constructing to condominiums. Rosenthal insists that he agreed only to construct the town houses at the time in question, not to bar a future conversion.

5. After overcoming the objections of the Planning Board, Rosenthal met with the Selectmen. It is his contention that they, as well as the Planning Board, expressed their personal objections to condominiums. The Town contends that the two boards merely were reflecting the provisions of the zoning by-law. Representatives of the boards contend, and Rosenthal denies, that he was told that condominiums were prohibited by the Rowley zoning. In any event approval was given for the project to proceed, and occupancy permits were issued to Rosenthal describing the units as "Apartment #1 single family unit-#2LK 74." There were like permits for each apartment to number 16 inclusive (Exhibit No. 1). Sixteen apartment units or town houses were constructed, each with vertical fire walls between the next unit and consisting of two and one-half stories (i.e. including a basement) with front and back doors.

6. Once completed the apartments enjoyed a high occupancy rate at a substantial rental.The owner then elected to convert them to condominiums and engaged in newspaper advertising and the posting of a sign on the property. The result was a demand from the Selectmen to terminate further promotion of the sale of condominiums and to remove the sign.

7. The plaintiff and Rosenthal appealed from the decision of the Selectmen to the Board of Appeals by instrument dated September 29, 1978 (Exhibit No. 4). A confirmatory appeal on a standard form was dated November 10, 1978 (Exhibit No. 5). The Board of Appeals affirmed the decision of the Selectmen in a decision of December 12, 1978. It gave the following reasons for its decision:

A single ownership as described in the Rowley Protective Zoning By-Law Section IV-B-14-a is not the same as condominium ownership as defined in Chapter 183A. In condominium ownership the interior of each unit is owned by separate owners with common ownership of common areas only.

The single ownership concept requires that the interior of each unit as well as common areas be held by single ownership.

8. The plaintiff's land is located within the "Outlying District" as defined in the zoning by-law of the Town (Exhibit No. 7). The only other districts are the Central District and the Flood Plain and Water Protection District. In the Outlying District Section 11 B provides

For any lawful trade or purpose not noxious or hazardous to the community except that it cannot be used for the operation of a commercial piggery or mink farm.

No contention is made that the present town houses either owned as they now are (by a trust) or after conversion to the condominium form of ownership constitute a noxious or hazardous trade or purpose nor a commercial piggery or mink farm. Rather the prohibition against condominiums is found by the Board of Selectmen in Section IV B [Note 2] 14 (a) which reads

All structures containing more than one (1) unit shall be constructed and retained under a single ownership, which is defined as a group or association of individuals, or two (2) or more individuals or a partnership or a corporation having common individual interests in a tract of land, and all structures located thereon. [Note 3]

It is on this provision that the Town relies to prohibit the conversion of the plaintiff's building to a condominium form of ownership. It has taken the position that the owner of each condominium owns the interior of his unit and only the common areas are owned in common. It is thus a construction of the language of the section and not its plain words on which Rowley relies. Based on this construction the Board of Appeals held a single ownership as described in the by-law is not the same as a Chapter 183A condominium.

9. The Town seeks to uphold the validity of the relevant by-law section on the ground that it is easier to enforce the maintenance provisions of subparagraph b [Note 4] against the entities mentioned in subparagraph a.

On all the evidence I am constrained to find and rule that a complete prohibition of condominiums in Rowley [Note 5] is without the authority conferred by Chapter 40A and has no rational relationship to the health, safety and welfare of the inhabitants of the Town. The pertinent provisions of the zoning by-law, i.e. Section IV B 14 (a) in which the prohibition is found is invalid and cannot be enforced.

General Laws, c. 183A provides the mechanics for the creation of a condominium and the legal framework for its existence. It is a neutral provision which neither approves nor disapproves the concept, but recognizes the existence of this form of ownership. Grace v. Town of Brookline, Mass. (1979). [Note 6] Most of the Massachusetts litigation in this field relates to the accommodation of the Rent Control Acts with a homeowner's desire to purchase a condominium unit. In Zussman v. Rent Control Board of Brookline, 367 Mass. 561 (1975), a piecemeal conversion of controlled housing units to condominiums and the eviction of tenants therefrom was upheld. Zussman was followed by Grace, supra, where the Supreme Judicial Court sustained a withholding of possession from a condominium owner for a limited period of time in view of the emergency housing situation in Brookline and the special rent control act applicable to it. [Note 7] So far as Rowley is concerned, condominium conversions depriving low or fixed income families of a place to live are not a problem (or would not be if they had been permitted). The root of the prohibition which in itself is derived from a sophisticated wording not readily apparent to the unwary as a ban on condominiums is said to be the difficulty in dealing with multiple owners on problems related to sewage and other common services, but this rationale loses its surface persuasiveness when one realizes that condominiums customarily have an organization designed to deal with common area problems. Problems related to the individual unit where the town would be faced with several owners are no different than those it might meet in a subdivision of detached single family homes. In short, there appears to be no rational basis for the ban on condominium ownership in Rowley. We need not explore the applicable case law as to this principle, however, for clearly there is nothing in Chapter 40A which authorizes such a limitation on the form of property ownership, and without sanction from the General Court the ban cannot stand. Indeed while it is presented to us in the form of a conversion, the by-law has been interpreted by the Town as a complete prohibition ab initio.

Goldman v. Town of Dennis, Mass. (1978), [Note 8] ... is distinguishable since in that case the cottage colony which the owner wished to convert to condominiums was a non-conforming use. In the present case the present apartments or town houses, however they may have been denominated, comply in all respects with the Rowley zoning by-laws, and it is only the form of ownership to which the Town objects.

The Town also contends that the predecessor in title of the plaintiff agreed that he would not convert the apartments to condominiums. Even if we assume that such an oral agreement is not unenforceable under the Statute of Frauds in view of part performance, I find no basis for ruling that such agreement ever was made. If the developer had so agreed, I can only believe that such a provision would have been included in the agreement with the Planning Board (Exhibit No. 8). In any event, even if it were the understanding of the Town that there would be no conversion and the permits for the apartment were issued on that basis, such an agreement would be unenforceable. The by-law itself violates the General Laws by making a distinction between types of ownership which has no rational basis and which is without the authority of the Enabling Act. Accordingly, the Town cannot require an owner to agree to abide by an invalid zoning by-law provision as a condition for the issuance of a building permit. The present case is entirely different from Sylvania Electric Products, Inc. v. Newton, 344 Mass. 428 (1962) where the Supreme Judicial Court upheld Sylvania's imposition of restrictions on a portion of the land which the city of Newton had rezoned to meet Sylvania's plans. In the Sylvania case the rezoning could have stood alone without the additional limitations which were imposed on the fringe areas of the premises. This is not so in the present case.

On all the evidence I find and rule that Section IV B 14 (a) is an invalid exercise of the zoning power of the Town of Rowley; that said provision makes an illogical distinction between forms of ownership of properties which is not authorized by G. L. c. 40A; that the distinction also is arbitrary and unreasonable and rests on the type of ownership rather than on use of the property; that the use of the property complies with the Rowley zoning by-law; and that any agreement made by the developer not to convert the apartments to condominiums is void and unenforceable.

Judgment accordingly.