Court: Condo owners can't have their rights to sue developers for shoddy construction waived away in condo docs written by those developers

The Supreme Judicial Court ruled today that developer-written condo-trust provisions that make it impossible to sue the developer for construction-related problems are illegal.

The ruling means that the condo board of the 42-unit Cambridge Point complex at 2440 Massachusetts Ave. in North Cambridge can proceed with a lawsuit against the company that put up the buildings. The trust is seeking at least $2 million to pay for repairs it says are needed because of shoddy construction by East Coast Developments of Woburn.

When it filed a master deed for the development, East Coast included provisions that required the condo board to obtain permission from at least 80% of condo owners for any lawsuit and to do so within 60 days of signaling its intent to sue. The condo board did notify all the owners, but then filed suit without 80% approval - because East Coast or its affiliated concerns still owned more than enough units to block any suit, according to the SJC.

A lower-court judge sided with the developer and dismissed the suit, but the state's highest court ruled today that condo regulations don't trump state laws aimed at protecting homeowners from damages and that the 80% and 60-day provisions were unenforceable, that, in fact, both the legislature and the SJC itself have long held that homeowners cannot be allowed to simply waive their rights:

In sum, it is "clear [from] the acts of the Legislature [and] the decisions of this court," Miller, 448 Mass. at 683, that the public policy of Massachusetts strongly favors the safety and habitability of homes. In order to effectuate this public policy, we have consistently recognized the rights of individuals to obtain legal redress when their homes fail to meet minimum standards. These rights -- whether grounded in the implied warranty of habitability or in the building code as enforced through G. L. c. 93A -- are so vital that we have consistently held that they cannot be waived.

And in the specific Cambridge case:

We conclude that it is overreaching for a developer to impose a condition precedent that, for all practical purposes, makes it extraordinarily difficult or even impossible for the trustees to initiate any litigation against the developers regarding the common areas and facilities of a condominium. Such a provision has all the same flaws as a waiver of liability provision -- which we would find void as contravening public policy -- but without the transparency of such a provision. We therefore conclude that [the lawsuit section] of the bylaws, viewed in light of the totality of the circumstances, is void because it contravenes public policy.



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PDF icon Complete Cambridge Point ruling71.18 KB


Not Surprising

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Same theory goes with landlord-tenant contracts. Even if a tenant volunteers at the signing of the lease to waive any of their legal rights or right to sue, if they later change their mind, the courts will still recognize their original rights. A landlord can't compel you sign away your legal rights. So looks like it's settled law now that developers can't either.

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