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Massachusetts Court Holds That Strict Condominium Bylaws Preclude Lawsuit Against Trustees

By on February 13, 2017

Massachusetts Court of Appeals recently affirmed the legal validity of a condo’s bylaws requiring the consent of eighty percent (80%) of unit owners as a prerequisite for owner standing in lawsuits against the trustees of the condominium’s board. The bylaw in question made it functionally impossible for unit owners to sue the trustees as, by virtue of the number of units and number of trustees, it necessitated at least partial trustee-owner consent to reach the eighty percent (80%) threshold. Bettencourt v. Trustees of Sassaquin Village Condo Trust, 59 N.E.3d 455 (Mass. App. 2016).

The Court held that the bylaw was neither unconscionable nor against public policy and thus concluded, “that the consent requirement is valid and the plaintiffs’ failure to comply with it mandates dismissal of their derivative claims.”  The Court reasoned that as the plaintiffs, “knowingly and voluntarily agreed to the consent requirement when they purchased their units,” and were not precluded from, “persuading other unit owners and one or more of the trustees to consent to a lawsuit,” that the bylaw was not unconscionable as the, “plaintiffs [had] not identified any aspect of the consent requirement that is substantively or procedurally unfair.”  Additionally, the Court noted the bylaw was not “one-sided” as the provision applied to all owners, included potentially aggrieved trustee-owners. The Court also held that  condominium trustees do not owe a fiduciary duty to individual condominiums owners, but rather that duty is limited to the board of trustees itself.

Functionally this ruling implies that even the most stringent of condominium bylaws may be read as valid so long as owners were aware of the bylaws at the time of purchase and the bylaws treat all owners the same (including trustee-owners). This ruling should serve as a reminder to current and potential Massachusetts condominium owners that heightened vigilance with regard to the contents of condominium bylaws and other condominium related documents is necessary and advantageous.

Andrea Jacobs
Ms. Jacobs’ practice focuses on civil litigation and transactional law in a variety of business areas.
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