THE BOARD OF TRUSTEES OF THE OLD STONE BRIDGE ACRES CONDOMINIUM TRUST v. RICHARD E. TERRILL in his capacity as sole trustee of the LONGVIEW REALTY TRUST and BELLINGHAM CONDO II, LLC.

This is an action for declaratory relief brought pursuant G. L. c. 231A, by the governing board of a residential condominium in Bellingham against the declarant of the condominium and a purported ground lessee of the declarant. Plaintiff Board of Trustees of the Old Stone Bridge Acres Condominium Trust filed its complaint on June 8, 2010, which was amended July 2, 2010. On August 2, 2010, Defendant Richard E. Terrill, in his capacity as sole trustee of the Longview Realty Trust, and Defendant Bellingham Condo II, LLC, filed their joint answer which included one counterclaim.

On February 8, 2011, the parties filed cross-motions for summary judgment. Plaintiff moved for summary judgment on Counts I through VIII of its Amended Complaint and on Defendants’ Counterclaim, requesting this court declare, inter alia, that: 1) all phasing rights reserved to Longview Realty Trust under the Master Deed at issue expired on December 13, 2009; 2) that neither Defendant has any right to construct a separate twenty unit condominium within the common area of Old Stone Bridge Acres Condominium (OSB Condominium); and 3) that neither Defendant has any right to connect any units or other improvements to the sewage treatment plant located on property leased by the OSB Condominium, or to sewer lines of the OSB Condominium which are connected to the sewage treatment plant. Plaintiff also moved for summary judgment on Count I of the Counterclaim. In that count, Defendants seek a declaration that Longview had the right and authority to enter into a 99-year ground lease with Bellingham II for the purpose of constructing a twenty unit multifamily residential condominium, separate and apart from the OSB Condominium regime on the “Phase VI, Part 6 land.” [Note 1] The count includes a request for a further declaration that Bellingham II has the right and authority to exercise certain rights and easements pursuant to the ground lease, including, but not limited to, the right use the sewage treatment plant at issue, or the right to connect to sewer lines which are connected to the sewage treatment plant. With respect to relief, Plaintiffs seek a permanent injunction prohibiting Longview, its successors, lessees, and assigns from entering upon the common areas of OSB Condominium for the purpose of undertaking any construction or connecting to the sewage treatment plant. [Note 2]

A hearing was held on March 2, 2011, after which the cross-motions were taken under advisement. On June 24, 2011, the parties filed a Stipulation of Dismissal as to Count IX of the Amended Complaint, and subsequently this court issued a “stay” in this matter based on the parties’ anticipation of a resolution in a related superior court case (No. 2006-0378 (Middlesex County)). Counsel has informed the court that despite their efforts, settlement negotiations were not fruitful, and have asked the court to decide the cross-motions.

In addition to the parties’ briefs and submissions filed in compliance with Land Court Rule 4, the summary judgment record includes the following, all of which are incorporated in this decision for the purposes of appeal: Stipulations of Plaintiffs and Defendants [as to accuracy of facts], a Joint Appendix consisting of nineteen Exhibits and an enlarged version of the Easement Plan included in the Joint Appendix as Exhibit 9. [Note 3] The following material facts are not in dispute:

1. Plaintiff is the Board of Trustees of the Old Stone Bridge Acres Condominium Trust under a Declaration of Trust dated December 2, 2002, recorded with the Norfolk County Registry of Deeds in Book 17826, at Page 345. [Note 4] The Declaration of Trust established the Condominium Trust as the organization of unit owners of the OSB Condominium within the meaning of G. L. c. 183A (OSB Trust). The OSB Condominium was established by the Master Deed dated December 2, 2002, recorded in Book 17826, at Page 307.

2. Defendant Richard E. Terrill is the Trustee of Longview Realty Trust (Longview), a Massachusetts Nominee Trust having its principal place of business at 120 Quary Drive, Milford.

3. Defendant, Bellingham Condo II, LLC (Bellingham II), is a Massachusetts limited liability company having its principal place of business at 120 Quary Drive, Milford.

4. The area of land on which the OSB Condominium is now located was originally developed pursuant to a special permit issued by the Town of Bellingham Planning Board in 1984, and subsequently amended. As issued, the special permit provided for the construction of 250 two-bedroom townhouse units on the 84.4 acres of land in Bellingham. Development under the special permit commenced in 1989.

5. On or about April 26, 2001, the Planning Board endorsed an ANR plan entitled: “Plan of Land in Bellingham, MA” dated March 14, 2001, recorded as Plan 303 of 2002 in Plan Book 496 (ANR Plan). The plan divided the development under the special permit into Parcel A and Parcel B. As shown on the ANR Plan, Parcel B is the land on which the OSB Condominium was developed. Also according to the ANR Plan, Parcel B contains approximately 53.10 acres, a portion of which abuts Blackstone Street, a public way in Bellingham (Parcel B). As of the date of endorsement of the ANR Plan in April 2001, both Parcel A and Parcel B were parts of the common land of Maplebrook Commons Condominium.

6. On or about May 31, 2002, Longview purchased Parcel B from the Trustees of the Maplebrook Commons Condominium Trust by a deed recorded June 4, 2002, in Book 16697, at Page 535 (Parcel B Deed).

7. On December 13, 2002, Longview, as the owner of Parcel B and declarant of the OSB Condominium, created the OSB Condominium and the OSB Trust by and through the Master Deed and the Declaration of Trust, recorded in Book 17826, at Pages 307 and Page 345, respectively.

8. The OSB Condominium was developed as a so-called phased condominium. The Master Deed reserved rights to Longview for the phased development of the OSB Condominium and Section 2 of the Master Deed identified Parcel B as the land which could be submitted as common land of the OSB Condominium. As provided in Section 19A of the Master Deed, the proposed additional phases, if added to the Condominium, were to be added within seven (7) years of the date of recording the Master Deed, unless that period of time was extended further by the Federal National Mortgage Association, or its successors.

9. Also on December 13, 2002, Longview recorded the Old Stone Bridge Acres Condominium Declaration of Easements, in Book 17826, at Page 404 (Second Declaration of Easements). Section 2 of the Master Deed provides that the Master Deed is subject to the Second Declaration of Easements, as it pertains to Parcel B. The Second Declaration of Easements contained a recitation of Longview’s intent to develop one or more condominiums on Parcel B, and granted or reserved to Longview and its successors and assigns certain rights of way in Maplebrook Road. These rights included the right to repair and maintain the road and reserved or granted Longview certain rights to connect with, make use of, and repair, replace and relocate underground utility lines, pipes, conduits and sewer and drainage lines which may from time to time be located in or upon the ways, driveways or walkways or other areas created as utility easements on Parcel B.

10. On or about June 4, 2002, several months prior to the recording of the Master Deed of the OSB Condominium, the Trustees of the Maplebrook Commons Condominium Trust recorded a “Declaration of Easements, Covenants and Restrictions” in Book 16697, at Page 524, together with a plan entitled: “MAPLEBROOK COMMON ASBUILT & EASEMENT,” recorded as Plan 302 of 2002, in Plan Book 496 (First Declaration of Easements). The OSB Condominium’s Master Deed, at paragraph twenty-two subjected the OSB Condominium to the provisions of the First Declaration of Easements.

11. On or about April 6, 2004, Maplebrook Commons Condominium Trust, as landlord, and the OSB Condominium, as tenant, entered into a 99-year ground lease for a portion of Maplebrook Commons’ common land (STP Ground Lease), pursuant to which the area could be used for construction and operation of a sewage treatment plant (STP). A notice of lease pertaining to the STP Ground Lease was executed by Maplebrook Commons Condominium Trust, as lessor, and the OSB Condominium, as lessee, and was recorded on June 4, 2004, in Book 21119, at Page 569.

12. The STP is currently located on land that is part of the common area and facilities of Birchwood Grove Condominium, formerly known as Maplebrook Commons Condominium. The units of the OSB Condominium have received service from the STP since its completion in or around December 2003, under the rights granted to them in the STP Ground Lease.

13. Between December 2, 2002, and September 18, 2008, Longview recorded fourteen amendments to the OSB Condominium Master Deed. The first thirteen amendments, together with the Master Deed, created a total of ninety-two dwelling units located within twenty-three buildings of the OSB Condominium. [Note 5]

14. By November 24, 2009, ninety-two units had been included in the OSB Condominium by the Master Deed and amendments thereto, and ninety of those units had been conveyed by Longview to purchasers.

15. On November 24, 2009, Longview recorded the Fifteenth Amendment to the Master Deed in Book 27245, at Page 242. On its face, the Fifteenth Amendment submitted 2.01 acres of land within Parcel B – being the land comprising Maplebrook Road and Old Stone Bridge Lane – as common area of the OSB Condominium. Section 5 of the Fifteenth Amendment subjects the 2.01 acres of land to reservations by Longview granting it the right to connect to underground and above ground utility lines, “including the private sewer plan off Maplebrook Road . . . to serve Developer’s remaining land on Old Stone Bridge Lane and Maplebrook Road… .” The Fifteenth Amendment was executed only by Longview; not by The OSB Condominium Trust nor any of the ninety OSB Condominium units owners.

16. Also on November 24, 2009, a notice of lease by and between Longview, as lessor, and Bellingham II, as lessee, was recorded in Book 27245, at Page 249 (2009 Notice of Lease). The 2009 Notice of Lease pertained to a ground lease entered into by Longview and Bellingham II (2009 Ground Lease), with respect to a portion of Parcel B containing approximately nine acres of land (“Phase VI, Part 6 Land” or “Locus”). As stated in Section 1.4 of the 2009 Ground Lease, the “permitted use” to which Bellingham II could put Locus was “solely for the erection and operation of a twenty (20) unit residential condominium and related amenities and appurtenances related thereto.”

17. Both the 2009 Ground Lease and the 2009 Notice of Lease recite a term of 99 years commencing on November 20, 2009, with the right on the part of Bellingham II, as lessee, to extend the term for an additional term of 99 years. The stated rent is $10.00 plus $1.00 per year. The 2009 Ground Lease and the 2009 Notice of Lease were signed solely by Defendants, with Richard E. Terrill signing for Longview, as lessor, and for Bellingham II, as lessee. At the time the 2009 Notice of Lease was executed, Defendants were affiliated or related entities.

18. Also on November 24, 2009, the Sixteenth Amendment to the Master Deed was recorded in Book 27245, at Page 253. The Sixteenth Amendment submits Locus as common area of the OSB Condominium subject to the 2009 Ground Lease declaring, inter alia, that Bellingham II had the right to construct 20 dwelling units and connect to the STP located off Maplebrook Road on Parcel A.

A. More specifically, Section 5 states:

[Locus] . . . is declared specifically subject to the reservation of the Developer . . . under a Ground Lease dated November 20, 2009, . . . to construct up to twenty (20) residential condominium units and all amenities, infrastructure, access ways and utilities on [Locus] which land is hereby declared as part of the Old Stone Bridge Acres Condominium, but being first subject to the terms of said Ground Lease, as well as the right of the Ground Lessee to utilize Maplebrook Road and Old Stone Bridge Lane, as well as the right to utilize all underground and above ground utility lines and all infrastructure related thereto… .

B. Also, Schedule A of the Sixteenth Amendment stated:

Locus is subject to the right of the Ground Lessee under the 2009 Ground Lease to use the private sewer plant off Maplebrook Road developed by Developer.

19. Locus is shown as a part of Parcel B on a site plan recorded with the Sixteenth Amendment, entitled: “Phase 6 Part 6, The Village at Old Stone Bridge Condominium,” recorded on November 24, 2009, as Plan 72 of 2009 in Plan Book 596. The Sixteenth Amendment was executed by Longview and not by The OSB Condominium Trust or any of the ninety OSB Condominium unit owners.

20. One or both of the Defendants intend to proceed with construction activity on Locus with respect to the construction of the twenty dwelling units, which led to the initiation of this action.

* * * * *

This case is before the court pursuant to the parties’ cross-motions for summary judgment. “Rule 56(c) of the Massachusetts Rules of Civil Procedure . . . provides that a judge shall grant a motion for summary judgment if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Attorney General v. Bailey, 386 Mass. 367 , 370-71 (1982) (internal citations omitted). This matter is ripe for summary judgment because the material facts are not in dispute and the case may be decided based on the applicable law.

The OSB Condominium Master Deed reserved to Longview certain rights and easements, including the right to add additional land, buildings, and units, in one or more phases, by means of one or more phasing amendments to the Master Deed. Pursuant to Section 19A of the Master Deed, the phasing rights were reserved to Longview for a period of seven years (7) years. “In a phased condominium development, groups or stages of units are completed over a period of several years and become part of the condominium by successive amendments to the master deed. Phasing is not a statutory term, but is a usage that has grown out of the general enabling provisions of G. L. c. 183A.” Queler v. Skowron, 438 Mass. 304 , n.15 (2001) (internal citations omitted). It is undisputed that under the phasing rights set forth in the OSB Condominium Master Deed, Longview could, but was not required to, submit all of Parcel B to the OSB Condominium as common area and to construct as many as 112 units on the parcel.

As an initial matter, Defendants conceded at the summary judgment hearing that all phasing rights of Longview under the Master Deed expired on December 13, 2009. By then, 92 of the possible 112 units had been included in the OSB Condominium by the original Master Deed and the subsequently-recorded amendments. However, Defendants do not argue that their right to build the twenty dwelling units arises from their phasing rights under the OSB Condominium Master Deed. Instead, their position is that they complied with the phasing right termination date by adding the Sixteenth Amendment prior to December 13, 2009, and that their right to build the second twenty-unit condominium regime derives from the valid 2009 Ground Lease executed by and between the Defendants. Accordingly, insofar as Plaintiff insists on a declaration that that all phasing rights of Longview under the Master Deed expired on December 13, 2009, that point is not in dispute.

With respect to Plaintiff’s Motion for Summary Judgment, Plaintiff proffers several alternative theories and raises a variety of issues while challenging the validity of Defendants’ development scheme. [Note 6] Notwithstanding their alternative positions for the moment, this court will first address the contention that Longview’s development scheme violated G. L. c. 183A, § 5(b)(1). With respect to this issue, the court must first address whether Locus was submitted to the OSB Condominium as common area and if so, whether the submission of Locus to the common area, encumbered by the 2009 Ground Lease between the Defendants, affected the existing unit holders’ percentage interest without their prior notice or consent.

General Laws chapter 183A is essentially an enabling statute, setting out a framework for the development of condominiums in the Commonwealth, while providing developer and unit owners with planning flexibility. Queler, 438 Mass. at 312 (2001), citing Barclay v. DeVeau, 384 Mass. 676 , 682 (1981). The ownership of a condominium unit constitutes an interest in land. Franklin v. Spadafora, 388 Mass. 764 , 767 (1983); G. L. c. 183A, § 4 (“Each unit together with its undivided interest in the common areas and facilities . . . shall constitute real estate…”). Because each unit purchaser acquires an undivided interest in the condominium common area, the common area is owned by the unit owners as tenants-in-common in proportion to their respective undivided interests. DiBiase Corp. v. Jacobowitz, 43 Mass. App. Ct. 361 , 366 (1998), aff’d, 427 Mass. 1004 (1998).

General Laws c. 183A mandates that certain minimum requirements for establishing condominiums be met, and those matters not specifically addressed in the statute are to be resolved by the involved parties. Queler, 438 Mass. at 312-13, citing Tosney v. Chelmsford Village Condo. Ass’n., 397 Mass. 683 , 686 (1986). Among the minimum requirements that must be satisfied under G. L. c. 183A are provisions governing how the undivided interest of a unit may be altered. Under G. L. c. 183A, § 5(b)(1), the “percentage of the undivided interest of each unit owner in the common areas and facilities as expressed in the master deed shall not be altered without the consent of all unit owners whose percentage of undivided interested is materially affected… ” (emphasis added). An exception to this general rule, as set forth in § 5(b)(1), is that “acceptance and recording of the unit deed shall constitute consent by the grantee to the addition of subsequent units or land or both to the condominium and consent to the reduction of the undivided interest of the unit owner if the master deed at the time of the recording of the unit deed provided for the addition of units or land and made possible an accurate determination of the alteration of each unit’s undivided interested that would result therefrom” (emphasis added).

Plaintiff maintains that Longview submitted Locus to the OSB Condominium pursuant to the Sixteenth Amendment, which established Locus as common area subject to the 2009 Ground Lease between Defendants (an improper lease in Plaintiff’s view.) Under the terms of the 2009 Ground Lease, Bellingham enjoyed, inter alia, the right to construct a separate twenty-unit condominium on Locus. Plaintiff therefore argues that Longview’s development scheme ran afoul of G. L. c. 183A, § 5(b)(1) because the submission of Locus to the common area of the OSB Condominium, encumbered by the 2009 Ground Lease, materially affected the ninety extant unit owners’ percentage interests in the common areas of the OSB Condominium. In addition, Plaintiff asserts that their consents were required under G. L. c. 183A, §§ 5(b)(1), and 5(b)(2)(iii) because the Master Deed and other instruments recorded before the ninety unit deeds did not put the OSB Condominium unit owners on notice that their percentage interests could be affected by the construction of a separate condominium regime on the common area of the OSB Condominium, and the phasing rights had expired and would have to have been revived to build out any phase.

This court agrees with Plaintiff that Longview submitted Locus to the OSB Condominium pursuant to the Sixteenth Amendment, which effectively established Locus as common area subject to the 2009 Ground Lease between Defendants. It is undisputed that Longview was under no obligation to submit Locus to the OSB Condominium, and under the terms of the Master Deed it could have built a second condominium regime on the land as of right. But, under the plain terms of the Sixteenth Amendment, Longview submitted Locus to the OSB Condominium as common area and, upon recording the Amendment, subjected Locus to the terms of Defendant’s 2009 Ground Lease. [Note 7]

Accordingly, the issue becomes whether the submission of Locus to the common area of the OSB Condominium, encumbered by the 2009 Ground Lease, affected the ninety extant unit owners’ respective undivided percentage interests in the common area of the OSB Condominium. As stated above, G. L. c. 183A, § 5(b)(1), provides, in relevant part:

[A]cceptance and recording of the unit deed shall constitute consent by the grantee to the addition of subsequent units or land or both to the condominium and consent to the reduction of the undivided interest of the unit owner if the master deed at the time of the recording of the unit deed provided for the addition of units or land and made possible an accurate determination of the alteration of each unit’s undivided interested that would result therefrom (emphasis added).

The language of § 5(b)(1) has been applied not only when the proportional percentage interest of a unit owner was reduced, but also where there has been a reduction to the common area as a whole.

In Kaplan v. Boudreaux, 410 Mass. 435 (1991), the Supreme Judicial Court noted that the term “interest” as used in G. L c. 183A is undefined. The Court rejected the argument that only a transfer of an “ownership” interest in a common area would alter a unit owner’s percentage interest and held that, where the governing board, without the consent of all of the unit owners, amended the by-laws at issue to grant one unit owner the exclusive use of a portion of the condominium common area, the by-law amendment “properly [was] treated as transferring an interest in land.” Id. at 442. The Court continued to state that such a transfer was sufficient to “change the relative interest of the unit owners in the common areas.” Id. at 444. Additionally, in Strauss v. Oyster River Condo. Trust, 417 Mass. 442 , 445 (1994), the Court held that where certain units of a condominium were expanded into the common area, those expansions altered the percentage of undivided interest which each owner had in the common area and were unlawful because they were not approved unanimously by all of the unit owners. [Note 8]

Here, the 2009 Ground Lease would encumber the entire nine acres of common area comprising Locus and would remain in effect for 99 years, or potentially double that period. During the lease term, the ninety OSB Condominium unit owners would have no right to use Locus because the twenty proposed dwelling units would no longer be common area of the OSB Condominium. Therefore, not only would the existing unit owners’ percentage interests in the common area be changed, the terms of the 2009 Ground Lease would prevent them from accessing, using or occupying any portion of Locus. Therefore, consistent with Strauss, this court is persuaded that if Defendants exercised their rights purportedly granted under the 2009 Ground Lease, i.e. to construct the twenty dwelling units of a separate condominium on Locus, the existing unit owners’ respective undivided percentage interests in the common area of the OSB Condominium would be affected.

This finding is not changed by Beaconsfield v. Zussman, 416 Mass. 505 (1993), as argued by Defendant. In Beaconsfield, the Court held that a 155-year lease of a twelve parking spaces located within the common area did not divide the condominium common areas and facilities in violation of G. L. c. 183A, § 5(c). In that case, the property was subject to a lease when the condominium trust was created and when the property initially was submitted to the provisions of General Laws chapter 183A. This point was emphasized by the Beaconsfield Court, which stated that “the lease was entered into and recorded before the property was submitted to the provisions of G. L. c. 183A and before the declaration of trust was executed and recorded.” Id. at 507. The Court also attributed particular significance to the fact that “the lease and its terms were fully disclosed of record, so that every unit purchaser had notice of the burden imposed by the long-term, cost-free use of the twelve leased parking spaces in the garage.” Id. Consequently, the Beaconsfield Court held that the leased area was never part of the condominium’s common areas and facilities, and “[s]ince the interest retained by the developer never became part of the condominium common area, its retention [did] not constitute a division of the common area.” Beaconsfield, 416 Mass. at 508, citing Comm. Wharf E. Condominium Ass'n v. Waterfront Parking Corp., 407 Mass. 123 (1990).

Thus, a condition precedent to the holding in Beaconsfield was that the leasehold interest was recorded prior to the Master Deed, which is inapposite to the facts of this case. Here, in the first instance, the possibility that a separate condominium could be constructed on the common area of the OSB Condominium was not disclosed in or authorized by the Master Deed or by any other instrument or amendment recorded before the conveyance of ninety unit deeds. In the absence of such disclosure or authorization, Longview could not first reserve rights to build a second condominium on the OSB common area in 2009, by entering into the 2009 Ground Lease with Bellingham II and then purporting to submit Locus to the OSB Condominium subject to the terms of that lease.

In this case, when each of the ninety units was conveyed, the unit purchaser would have been able to determine that Longview had reserved certain development rights with respect to Parcel B. Those rights would have included: the right to submit land and buildings thereon as Phases of the OSB Condominium; the right to submit the land portion of a Phase without any buildings units thereon; the right to submit the land portion of a Phase without any buildings thereon and subsequently construct and submit to the OSB Condominium the building and units of that Phase by separate amendment; or to not submit land as a Phase of the OSB Condominium and build one or more condominium regimes on the parcel. What the unit owners could not have determined at the time their respective units were conveyed was that Longview could submit land to a Phase, and, subsequently could construct a building and units of a wholly separate condominium on that common land of the OSB Condominium. Accordingly, they could not have anticipated the situation that has arisen here.

Finding as this court does that the existing unit owners’ undivided percentage interests in the common areas of the OSB Condominium were altered without their consent, this court concludes that the construction of the twenty units comprising a separate condominium regime on Locus, which had previously been made part of the common area of the OSB Condominium, is an impermissible deviation from the covenants and restrictions of the phasing scheme set forth in the OSB Master Deed and the Second Declaration. Therefore, the construction would violate G. L. c. 183A because it was not possible at the time unit deeds for the ninety unit owners were recorded to determine that the unit owners’ percentage interests in Locus would be altered in such a manner. See G. L. c. 183A § 5(b)(1).

In addition, given that the phasing rights under the Master Deed had expired, any development of a phase would have required the requisite unit owners consent as provided by G. L. c. 183A, § 5(b)(2)(iii), which was not obtained. [Note 9]

Judgment to issue accordingly.