This action concerns an unusual controversy arising out of the applicability of the rules and regulations of a fire district relating to water service to an existing apartment complex converted to a condominium after the promulgation of the rules and regulations. The plaintiffs contend that by their very terms the Fire District's enactments apply only to new developments, that to the extent they do apply to existing developments they are not authorized either by the enabling act or by the Massachusetts Water Resources Authority Act, St. 1984, c. 372, §§1-36, or by any other legislation, that the provisions of G.L. c. 183A , §14 have preempted the field and finally that the application of the rules and regulations to the plaintiffs' premises and not to apartments violate the equal protection provisions of the federal and state constitutions. The defendants conversely argue that they have full statutory authority to promulgate rules and regulations, that the 1986 rules and regulations apply to existing as well as future developments, that the provisions of G.L. c. 183A, §14 are permissive and have not preempted the field, that the standard of review of administrative regulations is such that the Court must uphold the position of the defendants and that to do so will violate no constitutional mandates. The crux of the matter is the defendants' insistence that a pre-existing apartment complex with 180 dwelling units must install individual units for each apartment after the conversion of the complex to the condominium form of ownership and perhaps to retrofit the project to provide for separate pipes to each unit. The latter requirement appears to have been waived in the present case although the complaint assumes it is still being pressed by the defendants.
A trial was held at the Land Court on August 22, 1988 at which a stenographer was appointed to record and transcribe the evidence. The plaintiffs called as witnesses Michael J. Cohen, one of the trustees of the plaintiff Condominium Association, and Gregory Jordan, president of Hunneman Investment Management Company, an expert in property management and development; the defendants' witnesses were Arthur Freniere, a former member of the Board of Water Commissioners, George McDonnell, a resident of South Hadley and a Board Consultant, and John W. Waller, Superintendent of Water Supply, Fire District No. 1, South Hadley. There were six exhibits introduced by the plaintiffs and eight by the defendants, all of which are incorporated herein for the purpose of any appeal.
The parties entered into the following stipulation of facts:
"The parties to the above-referenced action hereby stipulate, by their respective attorneys, to the following facts without admitting their relevance:
1. Plaintiffs are Michael J. Cohen, Andrew L. Ross and Ira B. Sutton, as they are the Trustees of the Hadley Village Condominium Trust ('Trust'), pursuant to a Declaration of Trust, dated February 5, 1987, registered at the Hampshire County Registry District of the Land Court on February 24, 1987, as Document No. 6061.
2. The Trust is presently the governing body for the Hadley Village Condominium ('Hadley Village'), a condominium created pursuant to G.L. c. 183A ('Chapter 183A') by Master Deed, dated February 5, 1987, registered at the Hampshire County Registry District of the Land Court on February 24, 1987, as Document No. 6060.
3. Defendant, Sidney A. Crossland and defendant William L. Schenker, along with John A. Mikuszewski, are the present members of the Board of Water Commissioners, Fire District No. 1, South Hadley, Hampshire County, Massachusetts ('Water Commissioners'). At the time the 1986 Rules and Regulations for Housing Developments were adopted, defendant Arthur E. Freniere was a member of the Board of Water Commissioners. The Water Commissioners govern the water supply and distributing system within the boundaries of Fire District No. 1 of South Hadley ('District') in which Hadley Village is located.
4. Defendant, Water Department - Fire District No. 1, South Hadley, Hampshire County, Massachusetts ('Water Department') is a statutorily created body corporate. The Water Department manages and operates the water supply and distributing system in the District.
5. The Rules and Regulations for Housing Developments ('Rules') were adopted in final written form by the Water Department on January 28, 1986.
6. The buildings comprising Hadley Village were built prior to 1974.
7. The Water Commissioners have not required any apartment buildings which were constructed prior to the issuance of the Rules, but which have not been converted to condominiums, to install separate water meters or pipelines for each apartment.
8. There were no multifamily buildings or dwellings in South Hadley, Fire District No. 1, converted to the condominium form of ownership prior to the date the Rules were promulgated.
9. Prior to the formation of the Hadley Village condominium, the developers of Hadley Village knew of the existence of the Rules and were aware that the Water Commissioners had determined on or about November 12, 1986 that the Rules would apply to Hadley Village in the event the buildings were converted to the condominium form of ownership."
I hereby adopt the facts to which the parties have agreed. In addition, I further find and rule on all the evidence as follows:
10. At least as early as 1954 the Board had adopted certain rules and regulations. So far as here material (see Plaintiffs' Exhibit No. 3 and Defendants' Exhibit No. 9) they read as follows:
The owner of property supplied will be charged for all water furnished the premises during his ownership. When ownership changes, the name and address of new owner should be given to water office, at once, so that bills may be properly rendered.
House Service connections from the street line to the meter are the property of the owner, and must be maintained by him.
Failure of owner or consumer to receive bill does not relieve them from obligation of payment, nor from consequences of its nonpayment.
The water meter is the property of the Water Dept. The property owner must keep meter on his premises easily accessible for reading and servicing at all times. The Water Department reserves the right to read, inspect or service the meter at any time.
These rules and regulations also reserved the right of the Board of Water Commissioners of the Fire District to shut off water for non-payment of bills or for neglect or refusal to comply with the rules and regulations of the Board.
11. The 1986 Rules and Regulations were adopted because an increase in development in South Hadley raised concerns as to the adequacy of the water supply. The defendant district in 1951 entered into a favorable forty-five year contract with the Metropolitan District Commission by which it is furnished with a certain number of gallons of water per day. With increased demand the needs of the district frequently were exceeding its daily allotment, and its Commissioners accordingly attempted to increase conservation measures. They were concerned also for the future in view of the increase in rates instituted by the MWRA to other non-contract customers. The present district contract expires in 1996, and the Commissioners anticipate a substantial price increase. They believe conservation of water use is crucial in view of these two considerations: increased demand and cost.
12. The Commissioners also are of the opinion that an owner of property will more quickly and effectively institute conservation measures if his water bill increases than will an occupant who is unaware of the water used in his apartment. This is one of the reasons given for requiring a separate meter for each condominium unit even though many of them continue to be rented. The defendants believed that each unit owner would conserve water if his individual bill increased significantly whereas the incentive would be lost if the plaintiff were billed. The defendants apparently did not address the question as to whether in the apartment complex the landlord has the right to enter to affix water conservation devices to the fixtures which it is assumed by the defendants that as owner he will do.
13. The Master Deed establishing the condominium pursuant to the provisions of G.L. c. 183A (Exhibit No. 4A) was approved for registration by a Justice of the Land Court on February 11, 1987. It requires the consent of at least seventy-five percent of the total undivided beneficial interest in the condominium trust for any amendment thereto, with exceptions not here material other than the provisions in Section 14(d) that proscribe amendments which would render the Master Deed contrary to or inconsistent with any requirements or provisions of c. 183A. The Declaration of the Hadley Village Condominium Trust (Exhibit No. 48) provides similarly for the consent in writing of the owners of units holding at least seventy-five percent of the total voting power. It further provides in Section 5.25 as follows in regard to water and sewer use services:
5.25 Water and Sewer Use Charges. Water charges for water supplied to Units in the Condominium are commonly metered and shall be paid by the Trustees to the billing authority as a common expense; provided, however, that if the Trustees determine, in the exercise of reasonable discretion after investigating the situation, that one or more Units are using disproportionate amounts of water, the Trustees may allocate the water charges on a basis which more fairly reflects such disproportionality of use. Sewer use charges which are based upon water usage shall be assessed and paid for in the same manner as herein provided for water charges.
14. There are thirteen buildings which comprise the Hadley Village Condominium with 180 units, some of which are one bedroom, and others contain two bedrooms. There is a brief description of each of the buildings in the Master Deed.
15. The defendant was established by a special act of the legislature, St. 1872, c. 114. The first section of the legislative enactment reads as follows:
SECTION 1. Fire district number one of the town of South Hadley is hereby authorized to supply itself and its inhabitants with pure water to extinguish fires, generate steam and for domestic and other purposes; and may establish public fountains and hydrants, and regulate their use and may discontinue the same and may fix and collect rents for the use of such water.
Section 9 thereof further provides as follows:
SECTION 9. Said fire district may elect or employ such officers or agents as it may see necessary to effect the purposes of this act, subject to such rules and regulations as it may adopt at a meeting called for that purpose.
The other sections in the special act are not relevant to the decision of this dispute.
16. The water department through its superintendent (Defendants' Exhibit No. 2) advised the plaintiffs by letter dated September 29, 1986 of problems with the contemplated condominium conversion and suggested a meeting with the Board of Water Commissioners to discuss the district's concerns (Defendants' Exhibit No. 2). The matter was considered at three meetings of the Board of Water Commissioners held in the fall of 1986 prior to the consummation of the conversion (Defendants Exhibits Nos. 6, 7 and 8) and the Board ultimately voted to require individual water meters for each of the 180 condominium units. They earlier had offered to waive the requirement of service to each unit by an individual pipe which would have required extensive retrofitting. Apparently, the Board is still agreeable to this waiver. The letter of February 24, 1987 (Defendants' Exhibit No. 3) by the Chairman of the Board of Water Commissioners states that "[t]he Water Department will not supply water to any condominium unit which is not serviced exclusively by a single water meter and bill to the record owner of such condominium."
The Board's position goes beyond the language of its rules and regulations and as applied to an existing development cannot be upheld. A careful reading of the rules and regulations adopted in 1986 makes it clear that they apply to future developments, not existing buildings, and indeed the testimony at the trial confirmed that there was extensive development in the area with resultant drain on facilities which led to the adoption of the new rules. The fair import from a reading of the rules and regulations clearly is that they are intended to apply to projects on the drawing board, not those already constructed and occupied. See, for example, the reference in paragraph 1 and its subdivisions to a water assessment study before any work is done and to a preliminary location site plan, and in paragraph 2 to a preliminary development plan. The defendants point to the earlier 1954 rules and regulations which require service separately to each owner of a property, but it is clear to me that these rules and regulations were not prepared and adopted with a condominium form of ownership in mind since this method of holding title was little known in Massachusetts in 1954 and the Enabling Act, chapter 183A of the General Laws, was not adopted until 1963.
This view that I take of the case effectively disposes of the controversy, but there are other questions raised by the litigation on which it seems appropriate to comment. The parties have assumed that the Fire Department No. 1 is authorized to adopt rules and regulations. The statute which created the entity is unclear on this, and if read strictly, it would appear that the phrase "subject to such rules and regulations as it may adopt at a meeting called for that purpose" modifies the election or employment of officers or agents and not the language immediately thereafter relative to effecting the purposes of the act. Nonetheless, the practices of the defendant in adopting rules and regulations from time to time and indeed the necessity of any organization formalizing the method of its operation is certainly implied, if not expressed.
I, therefore, find and rule that the district was authorized to adopt reasonable rules and regulations for the operation of the water department even though the statutory language appears to be limited. The rules and regulations adopted by administrative agencies are entitled to the same deference by the Courts as those adopted by the legislature. American Family Life Assurance Co. v. Commissioner of Insurance, 388 Mass. 468 , 477-478 (1983). Simon v. State Examiners of Electricians, 395 Mass. 238 , 249 (1985). It is usual, however, that such regulations as well as statutes generally operate prospectively. See Boston Gas Co. v. Department of Public Utilities, 387 Mass. 531 (1982). American Manufacturers Mutual Ins. Co. v. Commissioner of Insurance, 374 Mass. 181 , 189-190 (1978). In special circumstances, however, the Courts have held that for safety or other reasons improvements must be made to existing buildings even though the requirements were imposed long after the property was built. Church v. Boston, 370 Mass. 598 , 601 (1976). In the present controversy I find and rule that in addition to the clear intent of the draftsman of the 1986 rules and regulations that they apply to developments thereafter constructed, the rule as to prospective applications would require such a result, not merely to the conversion to a condominium form of ownership thereafter, but to future construction.
Massachusetts Courts have long recognized that a change in the form of ownership does not by itself affect a change of use. Sullivan v. Board of Appeals of Harwich, 15 Mass. App. Ct. 286 , 290 (1983). There are circumstances, of course, when condominiums may be treated in a different legislative manner than apartments. Associated Industries of Massachusetts, Inc. v. Commissioner of Revenue, 378 Mass. 657 , 668-670 (1979). The Water Commissioners contend that there is sufficient reason to treat condominiums differently from apartment units since it may be that an owner with an increased water bill may be impelled to take conservation steps whereas an individual renter, if billed, would not do so. They ignored in their formulation of policies the wording of §14 of c. 183A which reads as follows:
§14. Taxes, Assessments, Charges, etc.
Each unit and its interest in the common areas and facilities shall be considered an individual parcel of real estate for the assessment and collection of real estate taxes, but the common areas and facilities, the building and the condominium shall not be deemed to be a taxable parcel. Betterment assessments or portions thereof, annual sewer use charges, water rates and charges, and all other assessments or portions thereof, rates and charges of every nature, due to a city, town or district with respect to the condominium or any part thereof, other than real estate taxes, may be charged or assessed to the organization of unit owners; but any lien of the city, town or district provided by law therefor shall attach to the units in proportion to the percentages, set forth in the master deed on record, of the undivided interests of the respective units in the common areas and facilities. (1963, 493, §1.)
The parties disagree as to whether §14 constitutes a preemption by the Commonwealth so that local inconsistent enactments must fall as in Wendell v. Attorney General, 394 Mass. 518 (1985). See Bloom v. Worcester, 363 Mass. 136 , 155 (1973). Compare Amherst v. Attorney General, 398 Mass. 793 , 797 (1986). Section 14 in reference to water rates and services uses the word "may" in relationship to the organization to which they may be charged or assessed and follows with the words "shall attach" in reference to the lien for such monies. Customarily, the word "may" is a word of permission and not command, but there are decisions where it has been held to be mandatory. Brennan v. Election Commissioners of Boston, 310 Mass. 784 (1942). O'Connell v. Cambridge, 258 Mass. 203 , 205 (1927). A difference in the language used between that relative to the assessment of real estate taxes and the water bill suggests that in the present instance the General Court used "may" in its normal sense and that it intended to afford local authorities discretion in how they billed these various expenses. However, the general practice in the case of conversions has been to bill complexes in the same way that they previously had as apartments, and the policy adopted by the defendants is unique and outside the mainstream. Since I read the statute to be permissive and not mandatory in this regard, however, I find and rule that the Commonwealth has not preempted the field and that the local bodies may adopt a different policy if they so elect, and if it can be supported as rational.
A more difficult question to decide is whether it is open to local authorities to distinguish in the imposition of burdens by reason of the form of ownership. Under the Home Rule Amendment, Article 89 of the Amendments to the Constitution of the Commonwealth, it is a violation of Section VII (5) if the local ordinance or by-law is a private or civil law governing a civil relationship. The proscription does not apply, however, if it constitutes the exercise of an independent municipal power. The Supreme Judicial Court has been slow to find the regulation of types of property ownerships by cities or towns to fall within the exception. In CHR General, Inc. v. Newton, 387 Mass. 351 (1982) the Court held that a city ordinance restricting the conversion of rental units to a condominium or cooperative form of ownership was a private or civil law which was beyond the power of the city to enact. A similar result is reached in Bannerman v. Fall River, 391 Mass. 328 (1984). The Appeals Court reached a like conclusion in Altschuler v. Boston Rent Board, 12 Mass. App. Ct. 452 , 461 (1981). See also Church v. Boston, 370 Mass. 598 , 601 (1976). The most recent pronouncement in this area is found in Greater Boston Real Estate Board v. Boston, 397 Mass. 870 (1986) where the Supreme Judicial Court held that the city was not authorized to adopt new controls on condominium conversions by requiring a permit from the Boston Rent Equity Board.
If the rules and regulations adopted by the defendants applied to the existing complex, which I find and rule they do not, then the proscriptions of Section VII (5) of the HRA would interdict the policy adopted by the defendants. It follows that the plaintiffs are entitled to the declaratory judgment which they sought. The plaintiffs in the usual case would be entitled to a permanent injunction restraining the defendants from enforcing Section 2-B-2 of the rules and regulations against the plaintiffs. The governmental status of the defendants, however, entitles them to the benefit of the assumption that they will accord by the decision of this Court. Therefore, at this time, I find it unnecessary to make permanent the preliminary injunction.