New ruling states that condominium developers cannot restrict owners
construction defect lawsuits.
Community Associations Institute (CAI) announced today that the Massachusetts Supreme Judicial Court (SJC) has ruled in favor of Cambridge Point Condominium homeowners in the case of Trustees of the Cambridge Point Condominium Trust vs. Cambridge Point, LLC, the community's developer.
According to a statement from the court, condominium developers cannot unreasonably restrict the ability of homeowners to file suits against them. The court rejected the “poison-pill" provisions developers often use to insulate themselves from liability for construction defects, design flaws, and other claims condominium owners might pursue against the developers of their communities.
Closely watched by real estate developers and the condominium industry, the litigation attracted amicus curiae briefs from the Real Estate Bar Association and the Community Associations Institute of New England, both of which support the condominium trustees.
“Although the SJC decision applies only in Massachusetts, we believe that the theory on which it is based—that owners must have the ability to pursue legal remedies against developers—should apply to condominiums everywhere," said Ellen Shapiro, a partner in Goodman, Shapiro, and Lombardi, LLC. Shapiro and her partner, Henry Goodman, co-authored the CAI ̶ New England amicus brief. “Developers in many states, not just in Massachusetts, are inserting poison-pill provisions in condominium documents," she noted. “We hope courts in other jurisdictions will follow the SJC's lead and reject them."
“The court's ruling protects the more than 2 million Massachusetts residents living in community associations that are private entities," says Dawn Bauman, CAE, CAI's senior vice president of government and public affairs. “CAI and its international members applaud Edmund A. Allcock, a partner in Marcus, Errico, Emmer, & Brooks, P.C., who represented the trustees of Cambridge Point Condominium, the plaintiffs in this suit. Homes in Massachusetts community associations are generally valued at least 5 to 6 percent more than other homes. It is consequential that the court acknowledged homeowners' rights to protect their property and seek retribution from developers involving a construction deficiency."
CAI released a survey report in 2017 that indicated nearly 50 percent of construction deficiencies became evident after the statute of limitations had expired, and more than 44 percent of construction defect cases were settled out of court.
View the Massachusetts Ruling here: https://www.mass.gov/files/documents/2018/01/19/12327.pdf
Access the CAI Construction Deficiencies Survey here: https://www.caionline.org/Advocacy/StateAdvocacy/PriorityIssues/ConstructionDeficiencies/Documents/CAI%20Construction%20Deficiency%20Survey%20Report%202017.pdf
About Community Associations Institute Since 1973, Community Associations Institute (CAI) has been the leading provider of resources and information for homeowners, volunteer board leaders, professional managers, and business professionals in 342,000 community associations, condominiums, and co-ops in the United States and millions of communities worldwide. With more than 36,000 members, CAI works in partnership with 63 affiliated chapters within the U.S., Canada, United Arab Emirates, and South Africa, as well as with housing leaders in several other countries including Australia, Spain, Saudi Arabia, and the United Kingdom.
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