Here's the full text of Massachusetts House Bill H.1859, entitled "An Act Promoting the Planning and Development of Sustainable Communities," which is presently before the Joint Committee on Municipalities and Regional Government. I'll be digging into this jam-packed bill over the next few weeks and posting my thoughts on some of its key provisions. I invite our regular MLUM readers and others who are interested to do the same. This is a far-reaching bill which, if passed in anything resembling this form, will have a profound impact on real estate development, housing production, and the practice of land use law in the Commonwealth, so it's worth our time and attention. I look forward to an informative, spirited dialogue!
ALERT: Near End Of Session, Mass. Legislators Pushing Complex Bill That Would Change Zoning And Land Use Law As We Know It
A summary of what this bill would do is here. A few things jump right out: (1) the bill's title, "An Act Promoting the Planning and Development of Sustainable Communities," gives me the willies; (2) sayonara, ANR plans; (3) allows town meeting to change zoning bylaws by a simple majority, promoting instability in the law; (4) authorizes impact fees so municipalities can "recoup some of the capital costs for private developments"; (5) weakens the standard for issuance of variances.
Does anyone have any on-the-ground intelligence as to whether this bill - or anything like it - is actually going anywhere this session?
The Supreme Judicial Court (SJC) yesterday issued its decision in the closely-watched case of DeWolfe v. Hingham Centre, Ltd. The SJC has concluded that a broker can be liable for a written misrepresentation regarding zoning, despite language in a commonly-used form purchase and sale agreement that some thought protected the broker from such liability. We discussed the Appeals Court's 2011 decision in this case in this previous entry.
The facts are refreshingly simple.
The owner of a property in Norwell, Massachusetts told the defendant listing broker either that the property was zoned "Residential Business B" or that it was zoned "Business B." The broker was not aware of any prior business use of the property. Though she saw businesses located across the street, she observed only houses adjoining the property on either side. Apparently without further investigation, the broker advertised the property in at least two newspapers as being zoned "Business B."
The plaintiff, DeWolfe, wanted to buy a property to which he could move his existing hair salon, and he contacted the broker after seeing one of the ads. DeWolfe also saw the Multiple Listing Service (MLS) listing that the broker had created, which also said the property was zoned "Business B." Further, the broker placed at the property copies of pages from the town's zoning by-law that listed hair salons as "Permitted Business Uses" in the Business B District. The plaintiff bought the property, and after the closing discovered that the property was in fact in a "Residential B" district, where the contemplated hair salon was not allowed. Of course, he sued.
The broker relied on the following clause in the standard form purchase and sale agreement (P&S) published by the Greater Boston Real Estate Board (GBREB), which the parties had used for this transaction:
The BUYER acknowledges that the BUYER has not been influenced to enter into this transaction nor has he relied upon any warranties or representations not set forth or incorporated in this agreement or previously made in writing, except for the following additional warranties and representations, if any, made by either the SELLER or the Broker(s): NONE.
The broker sought dismissal of the case on the ground that, in light of this language, she could not be held liable for the faulty written the seller had provided to her. As we now know, the SJC disagrees.
The SJC begins its decision by noting that a broker ordinarily may rely on information provided by the seller in making representations about a property. However, the court goes on to rule that, "where it is unreasonable in the circumstances for a broker to rely on information provided by the seller, the broker has a duty to investigate further before conveying such information to prospective buyers."
Here, the owner testified that he told the real estate broker that the property was zoned "Residential Business B." The experienced broker apparently knew that there was no such zoning district in Norwell, and instead advertised the property as zoned "Business B." In addition, the broker was aware of no prior business use of the property, and had observed houses – not businesses – adjoining the property on either side. Based on these facts, the SJC concluded that a jury could find that the broker was on notice that the information provided by the owner was unreliable, and acted unreasonably in representing the property as zoned "Business B" without conducting any further investigation.
Turning to the language in the GBREB standard form P&S, the SJC held that, under the language quoted above, a buyer can rely on prior written representations that are not set forth or incorporated in the agreement. Therefore, the agreement did not protect the broker from liability arising from the written misrepresentations in the newspaper ad, the MLS listing, and the inapplicable zoning by-law placed at the property.
The SJC has sent the case back to the trial court to resolve the factual question of whether the broker acted unreasonably (i.e. negligently) in misrepresenting the property's zoning status.
This decision reinforces that, in Massachusetts, the best policy for a broker (or a seller) is to say little, and say it carefully. In the wake of this decision we may see changes to the GBREB form P&S in an effort to give future brokers the protection that many believed the current form already provided.
Educational opportunities abound this spring! Next Tuesday, April 2, 2013, at the Massachusetts Continuing Legal Education (MCLE) headquarters in Downtown Crossing, my current Rackemann colleague and fellow MLUM contributor Gordie Orloff, and my former Rackemann colleague, Land Court Justice Robert B. Foster, will be among the panelists in a program entitled, "Resolving Common & Complex Title Issues." Among other topics, this program will cover how to spot and – ideally – repair, the thorny title problems that can arise from a flawed or questionable mortgage foreclosure in this post-Ibanez, post-Eaton world, and what to expect when litigating a title dispute in the Land Court. Details and registration info can be found here.
Should the Red Sox start Jackie Bradley, Jr. in left? I don't know. But I do know that the Boston Bar Association's Land Use and Development Committee, co-chaired by my colleague and fellow MLUM contributor Johanna Schneider, is co-sponsoring two lunch programs of interest to land use lawyers. The first program, scheduled for April Fool's Day (but this is no prank), will feature Marc Wolman of the Massachusetts Department of Environmental Protection, who will discuss MassDEP's Noise Pollution Policy (the agency regulates noise as a form of air pollution). Details can be found here. The second program, scheduled for April 5, 2103, will feature Kay Doyle of Kopelman and Paige, P.C. and Roger Donoghue of Donoghue, Barrett & Singal, P.C., who will address issues arising from the implementation of the state's new medical marijuana law, with a focus on the scope of permissible local regulation of marijuana dispensaries. Details can be found here.
In its recent decision in Graziano v. Riley (pdf), the Appeals Court overturned a Superior Court ruling that required the defendant landowners to remove a berm they had built to stop water from flowing onto their property. Problem was, the defendants' berm caused flooding on their neighbors' (the plaintiffs) adjoining property. The defendants built the berm in 1966, when Massachusetts still followed the so-called "common enemy rule." Under that rule, landowners were free to prevent naturally-flowing surface water from entering their property, or to grade their land in a manner that diverted the water off their land and onto a neighbor's land, even if doing so caused flooding on the neighbor's land. (Note that even under the common enemy rule, landowners were not permitted to accumulate water on their land and then discharge it onto their neighbor's land).
In its 1978 decision in Tucker v. Badoian (pdf), the Supreme Judicial Court (SJC) ditched the common enemy rule and replaced it with a "reasonable use" standard, under which a landowner cannot unreasonably cause surface water to flood his neighbor's property. However, the SJC expressly held that the reasonable use standard would apply only to situations arising after its decision, so that existing structures and grading – even if flood-producing – could remain in place.
In Graziano, because the defendants' berm was built in 1966, they were not required to remove it. This illustrates the inequitable situation that arises when a landowner's pre-1978 diversion of surface water causes flooding on his neighbor's property: the flooder can maintain the status quo and continue flooding with impunity, while the floodee's ability to protect his property is limited by the reasonable use standard. We'll have to await a future case to learn whether the reasonable use standard is flexible enough to mitigate harsh results such as the one reached in Graziano.
The Supreme Judicial Court (SJC) is soliciting amicus briefs in Galiastro v. Mortgage Electronic Registration System, Inc., an appeal that presents the issue of whether the defendant, MERS, has standing to foreclose in its own right as the named mortgagee in a mortgage, when it does not have any ownership interest or rights in the underlying promissory note. The SJC will also decide whether its prospective 2012 holding in Eaton v. Fannie Mae, that a foreclosing mortgagee must either hold the promissory note or be acting on behalf of the note holder at the time of the foreclosure sale (see our analysis here), applies to cases (such as Galiastro) that were pending on appeal at the time of that decision. Oral argument in Galiastro is scheduled for May, 2013.
On Valentine's Day, the Boston Bar Association's Land Use & Development Committee, co-chaired by my Rackemann colleague and fellow blogger Johanna Schneider, will host a lunch meeting to discuss recent developments in the law of standing. The meeting will feature guest speakers Adam Cederbaum of the City of Boston's Office of Corporation Counsel and noted land use attorney Dan Dain of Boston's Brennan, Dain, LeRay, Wiest, Torpy & Garner, P.C. Event details and registration info can be found here.
The Supreme Judicial Court (SJC) recently turned its attention back to affordable housing under the state’s comprehensive permit law, M.G.L. c. 40B, §§ 20-23 (Chapter 40B). Since a high point in 2008, when it decided four Chapter 40B cases, the SJC has been relatively quiet on this subject. Quiet, that is, until the past few weeks, when the court issued two important opinions, Zoning Board of Appeals of Lunenburg v. Housing Appeals Committee and (a week later) Zoning Board of Appeals of Sunderland v. Sugarbush Meadow, LLC.
Tasked with administering Chapter 40B, the state's Housing Appeals Committee (HAC) has itself acknowledged that the statute “is not a model of clarity” and that every section “has required painstaking construction and interpretation over the years . . . ." It’s surprising, then, that the boards of appeals in Lunenburg and Sunderland both found an argument that contravenes some of the plainest language in the statute, and ran with that argument all the way to the SJC.
Both boards staked their bets on the assertion that the HAC could not overturn their denials of comprehensive permits because of the availability of affordable market-rate housing in Lunenburg, Sunderland, and their environs. The SJC rejected this argument because it conflicts with the language of the act. Section 20 of Chapter 40B limits a board to considering “the regional need for low and moderate income housing,” and defines “low or moderate income housing” as “any housing subsidized by the federal or state government . . .” (emphases added). Market-rate housing, however lowly priced, is not subsidized. The statute’s plain language would have been enough to silence this argument, but the SJC, appropriately, went on to point out some of the reasons why the statute says what it says.
A market-rate house built in 1827, for instance, may sell for the same price as a new low-income unit, but the true cost of ownership differs greatly. Moreover, as the SJC noted, some market-rate units are inexpensive because they're unsafe, and others are only temporarily priced low. Their price will rise with the market. Unlike subsidized housing, these units are not deed-restricted to limit their price. In its discussion, the SJC can be heard echoing a sentiment expressed more than a decade ago in Zoning Board of Appeals of Wellesley v. Ardemore Apartments Limited Partnership: “if housing . . . is ‘affordable’ only temporarily . . . a city or town may never achieve the long-term statutory goals.”
Not all Chapter 40B projects are created equal; some are better than others. And even in Lunenberg and Sunderland there were some complicating factors. But when the SJC has to assert its direct review authority to address contentions such as the “market-rate” argument, one has to wonder if there is no end to the arguments that will be raised over the statute’s meaning. Perhaps a direct appeal to a single justice of the SJC would better address the concern that delay “is often as effective as denial” and in “c. 40B proceedings . . . could . . . be more effective than denial.” Milton Commons Assocs. v. Board Of Appeals of Milton, 14 Mass. App. Ct. 111, 117 n. 2 (1982). Certainly every town and every aggrieved neighbor should have their day (or days) in court. But those days should be a means to an end (the adjudication of legitimate grievances), not the end itself.
In an "unpublished decision" in Patenaude v. Zoning Board of Appeals of Dracut (pdf), an Appeals Court panel recently held that a lot rendered unbuildable by infectious invalidity was not "cured" by the passage of time – specifically, the running of the 10-year statute of repose under M.G.L. c. 40A, § 7.
In 1974 the plaintiff, Patenaude, acquired a lot in Dracut that had been created from a larger tract. Although Patenaude's lot itself met all then-applicable zoning requirements, the remainder lot was left with less land area than required. As a result, Patenaude's lot was unbuildable due to infectious invalidity (see explanatory post here). Under that doctrine, a portion of Patenaude's lot was deemed to have "merged" for zoning purposes with the remainder lot, to lessen the remainder lot's nonconformity.
In 1987 the town amended its zoning by-law, causing Patenaude's lot to become nonconforming as to lot size. In 2010, Patenaude applied for a building permit. Patenaude argued that the lot’s infectious invalidity was cured in 1984, when the 10-year statute of repose under M.G. L. c. 40A, § 7 lapsed. Patenaude also argued that his lot was protected from the 1987 zoning amendment by the grandfathering protection of M.G. L. c. 40A, § 6.
The panel rejected both of Patenaude's arguments. It noted that under M.G.L. c. 40A, § 7, expiration of the 10-year period does not erase an illegality; it simply protects the lot from enforcement action, such as an order to remove an unlawful structure. It also ruled that an unremedied violation could not serve as a “launching pad” to obtain grandfather protection under M.G.L. c. 40A, § 6, which is reserved for lots that, are the time of a zoning change, legally conforming.