Condo Unit Owner Takes It On The Chin

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Another Massachusetts court case decided 1/7/2016 reveals just how difficult it is for unit owners to take action against a condominium trust / condominium association.

This unit owner won an arbitration and was awarded attorneys’ fees and costs by an arbitrator. But the Massachusetts Superior Court gave that award the boot, and this past week the Supreme Judicial Court upheld that decision.

At some point, the pendulum must swing back to give condo unit owners greater ability to resolve the injustices imposed on them by often self-interested, unreasonable and vindictive condo trustees.

Until then, here is the latest:

The case was Beacon Towers Condo Trust v. Alex.

A fire at the Beacon Towers Condominium caused damage to the condo building. The Beacon Towers Condominium trustees assessed a unit owner, Alex, $62,995 for the two units he owned. Alex challenged the lawfulness of the trustees’ actions with respect to the fire damage repairs that were done and imposition of the assessment on his two units. He commenced an arbitration action as required by the condo trust’s bylaws (as many now do these days – an additional barrier for unit owners).

An arbitration panel found in Alex’s favor and although the arbitration provision contained in the trust’s bylaw did not provide for the award of fees, the panel awarded attorneys’ fees to Alex. The arbitration panel noted that the American Arbitration Association (AAA) allows for an award of attorneys’ fees where “substantially all of the defenses were wholly insubstantial, frivolous and not advanced in good faith.” On that basis, the arbitration panel concluded the award of attorneys’ fees was appropriate.

Thereafter, the Beacon Towers Condominium trustees filed suit against Alex in superior court. The trustees alleged that the arbitration panel’s award of attorneys’ fees exceeded the scope of the arbitration provision contained in the trust’s bylaws. shocked face web

Not altogether surprisingly for a condo case, the superior court vacated the attorneys’ fees award Alex had fought so hard to obtain against seemingly insurmountable odds. Typically, arbitration decisions are ‘untouchable’ and invalidating an arbitration decision is notoriously difficult – but, remember, this is a unit owner vs. condo trustees case. The judge concluded that the arbitrator was not authorized to award attorneys’ fees because MGL ch. 231, section 6F did not specifically authorize an arbitrator to award attorney’s fees.

The case was then appealed onto the Massachusetts Supreme Judicial Court which affirmed the superior court ruling, holding that the circumstances of the case did not authorize the arbitrator to award attorneys’ fees.

Such is the state of unit owners’ rights in lawsuits against or brought by condominium trustees. If you are looking for more information on condominium law, check out these posts as well:

  1. 5 THINGS EVERY CONDO BUYER SHOULD BEWARE BEFORE BUYING!

  2. A CONDO UNIT OWNER HAS NOT PAID CONDO FEES IN MONTHS, WHAT CAN I DO NOW?

  3. INSURANCE COMPANIES SHOULD REVIEW & REQUIRE REVISION OF CONDOMINIUM DOCUMENTS PRIOR TO POLICY ISSUANCE

If you are a Condo Unit Owner and need an attorney to pursue claims against your Condo Trustees for an unlawful assessment on your unit, unlawful restrictions imposed on your unit (interior renovations, placement of satellite dish, parking, etc.) or for unlawful trustee conduct, contact The Jacobs Law LLC today! One of our experienced  Condo lawyers will discuss the issues with you and determine what your options are and whether litigation is appropriate.

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