Boston Condo Unit Owner Didn’t Violate Affordable Housing Restrictions by Having Roommates
The Boston Redevelopment Authority (“BRA”) has created an affordable housing program that is intended to help create and maintain affordable housing opportunities for middle-income residents of the city. The affordable condominium units sold under this program are subject to restrictions that require owners to maintain the unit as their primary residence and prevent them from leasing out the unit.
The Massachusetts Appeals Court recently considered whether a unit owner violated these restrictions by having roommates and spending a significant amount of time traveling as part of his job in Boston Redevelopment Authority v. Pham.
When the unit owner originally applied to purchase the unit, his application indicated his sister would live with him. He signed several documents, including the deed, the deed rider covenant for affordable housing, a note, a mortgage, and an affirmation stating he agreed to the provisions of the unit deed, the master deed, the declaration of trust, the by-laws, and the condominium rules and regulations. He also signed an affidavit with his application and again each year, stating that the unit was his principal residence.
The deed rider covenant for affordable housing requires the owner to occupy the residence as his principal residence. It allows the owner to lease the unit only with prior written approval from the BRA and only if the rent is no more than 115% of the owner’s monthly housing cost.
The master deed states that it is intended that the units be owner-occupied. It prohibits “the leasing of Units to others as a regular practice for business, speculative, investment or other similar purpose….” It further states that an affordable unit may not be occupied by anyone other than the owner or leased without the express consent of the city.
The by-laws state that any lease must be in writing “and apply to the entire Unit and not merely a portion thereof.”
The defendant’s sister eventually moved out of the unit, and he had a succession of roommates with no formal lease or contract. The defendant would use one bedroom and the roommate the other, and they would share the rest of the unit. The highest amount paid by any of the roommates was half of the defendant’s approximate monthly housing costs.
The defendant traveled quite a bit for work, sometimes being gone for weeks at a time. He also spent time in New Jersey with the woman who would later become his wife. The unit remained his home base, and he kept his furniture and most of his valuable possessions there. He kept the utilities in his name and considered it his address for tax purposes. He did not rent or buy a home elsewhere.
The BRA received a complaint from a trustee of the condominium that the defendant had been renting his unit. The BRA notified the defendant he was in violation and sought a meeting. The BRA subsequently sent another letter, stating it had found that the defendant was in violation of the covenant by not occupying the unit and by leasing it without prior written approval. The letter also indicated that the BRA would bring legal action if the defendant did not provide proof that the current roommate no longer lived in the unit, present a plan to pay any money received from the roommates to the BRA, and arrange to sell the unit to a qualified buyer within six months. The BRA filed suit when the defendant did not comply.
The BRA requested an accounting and an order requiring the defendant to sell the unit. The trial judge found that the defendant had been occupying the unit as his principal residence and that the documents did not clearly prohibit his having a roomate. The BRA appealed.
The appeals court noted that Massachusetts law requires it to construe deed restrictions against the party seeking enforcement. The covenant did not define “principal residence.” The court pointed out that the BRA could have required the owner to be present in the unit for a minimum number of days within a specified period, but it had not done so. The BRA representative even testified that there was no minimum number of days that the unit owner had to be present. The appeals court pointed out that a restriction that prevented an owner from having a job requiring frequent travel would seem inconsistent with the goals of assisting those with moderate and middle incomes. The trial court had properly considered multiple factors and made a careful inquiry into the facts regarding the defendant’s frequent absences. The appeals court found no error in the trial court’s determination that the defendant had occupied the unit as his principal residence.
The appeals court found that the restrictions on leasing the unit were directed at leasing the whole unit. The defendant had not leased the entire unit for business, speculative, or investment purposes, but instead he had roommates to help him carry costs. The documents did not prohibit roommates, lodgers, or boarders. The BRA representative testified that roommates who were family or close friends were not prohibited and did not even require prior approval. The BRA argued that having roommates who were not family or close friends meant the use of the unit was for “business.” The appeals court found that neither the master deed nor the covenant prohibited unrelated people from living together in the unit, nor did they require approval of household members.
The appeals court rejected the BRA’s argument. It noted that the fact the roommates paid rent was a factor that had to be considered, but the defendant would have had difficulty maintaining his costs without roommates. The appeals court pointed out that the BRA could have explicitly prohibited roommate arrangements, but it had to do so unambiguously. The appeals court found that the documents were at least ambiguous as to whether the defendant was allowed to have a roommate without approval and affirmed the trial court’s judgment and orders.
Condominiums come with some restrictions, but those sold under the BRA program have not only those restrictions imposed by the association but also those imposed by the BRA. Attorney Richard Mucci was previously a trustee of a large condominium association and has a thorough understanding of Massachusetts condominium law. If you have a legal issue involving condominium restrictions, call (781) 729-3999 to schedule a meeting with a Massachusetts real estate attorney.