The Massachusetts legislature faced a dilemma during the 1990s real estate recession. Defaulting condominium owners stopped paying monthly assessments, and projects fell into disrepair. First mortgages held priority over condominium liens, so mortgage lenders had little incentive to see that condominium assessments were paid. Neighborhoods became blighted and unsafe.
In response, the legislature amended the Condominium Act to give condominium liens “super-priority” over first mortgages for assessments coming due within sixth months before condominium associations file suit to enforce their liens. The priority status also covers condominium associations’ costs of collection and reasonable attorneys’ fees. The amendment brought the desired result. Mortgage holders usually pay condominium fees owed by their borrowers when notified of delinquencies. A question remained, however, as to whether condominium associations could obtain super-priority liens for more than six months of assessments by filing multiple lawsuits creating “rolling liens.”
The Supreme Judicial Court answered this question last month, in Drummer Boy Homes Association Inc. v. Britton.
Some background information on the defendants in this case, Randy and Carolyn Britton, is noteworthy. Randy Britton graduated from law school, then passed the Massachusetts bar exam in 2006. When the Board of Bar Examiners considered Randy’s application for bar admission, it learned that he had filed multiple lawsuits against former employers, attorneys, police officers and media outlets for wrongful termination, civil rights violations, defamation and malicious prosecution. His application failed to disclose criminal complaints against him (which had not resulted in convictions) and a civil complaint involving his application for an assault weapon license. The board noted Randy’s history of initiating unsuccessful pro se legal actions, some of which had resulted in sanctions and an order to pay restitution.
A Connecticut grievance committee in 2007 found that Randy had engaged in the unauthorized practice of law. The board determined that Randy was not qualified for admission to the bar. This setback did not keep Randy away from courtrooms. His wife Carolyn and he often represent themselves in lawsuits. Carolyn’s courtroom appearances are memorable, as she haltingly delivers legal arguments while Randy, seated nearby but forbidden from speaking on her behalf, coaches her with gestures and sighs.
Parking Dispute Escalates
Drummer Boy was among the sundry lawsuits involving the Brittons. Because of a parking dispute with their condominium association, the Brittons withheld condominium fee payments. Massachusetts courts frown upon this tactic, because allowing dissatisfied unit owners to withhold payments would threaten the financial viability of condominium projects and, in effect, force other unit owners to make up for the shortfall. Aggrieved owners are instead expected to pay disputed assessments under protest, then seek judicial rulings on their disputes.
The association sued the Brittons in district court to enforce its priority lien, then six months later filed a second suit to enforce another lien, and then six months later filed a third suit, claiming that each lawsuit gave priority lien status for six more months of condominium fees. After consolidating the three lawsuits into a single action, the court entered judgment against the Brittons for $22,742.08, including attorney’s fees and costs. However, the judge limited the priority lien treatment to only one six-month period of unpaid assessments plus attorney’s fees and costs. The parties appealed to the appellate division of the district court, then to the Appeals Court. Both courts upheld the district court’s decision limiting lien priority to one six-month period. The Supreme Judicial Court granted further appellate review.
Two groups of financial institutions filed amicus briefs with the SJC. The first group, which included Bank of America, Fannie Mae and Freddie Mac, encouraged the SJC to uphold the lower court’s decision as more favorable to first mortgage holders. The second group, which included banks that make loans secured by unpaid assessments to condominium associations, sought to overturn the lower court’s decision and establish priority for “rolling liens” over first mortgages. After discussing the purpose of amendments to the Condominium Act in the 1990s, the SJC observed that condominiums could still face financial hardship if associations were limited to one six-month period of lien priority. The SJC overruled the lower courts, and held that condominium associations can file successive lien enforcement actions, with each action having a six-month lien priority over first mortgages. The SJC recommended that mortgage holders protect themselves from lost priority by paying the delinquent assessments.
The Brittons’ parking dispute resulted in a landmark SJC decision under Massachusetts condominium law. Considering the Brittons’ affinity for controversies and courtrooms, they will likely be involved in other precedent-setting litigation in years to come.
Christopher R. Vaccaro is a partner at Dalton & Finegold LLP. in Andover. His email address is cvaccaro@dfllp.com.
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