Condo Media - May 2010 - 22

ASKED & ANSWERED

Obstacle or Advantage
Can Age Restrictions Be Altered in Senior Communities?

Q A

QUESTION: I live in a senior community in Massachusetts that is restricted to owners 55 and over. About three-quarters of the units have been sold, but the developer is having trouble selling the rest, so he wants to lift the age restrictions to expand the pool of potential buyers, essentially opening the community to anyone who wants to live here. Is this legal? And what, if anything, can the existing owners, who bought here specifically because of the age restriction, do to block this change? ANSWER: This question is arising with some frequency, not only in communities like yours, where developers are struggling to market unsold units, but also in older developments, where existing owners who want to sell are having trouble finding eligible buyers. There are two separate but related factors at work. The first, obvious problem is the battered economy and mortgage financing restrictions that are affecting all segments of the real estate market, including, and perhaps especially, condominiums (see this month’s feature article on page 42). The second, less obvious problem is the glut of age-restricted communities in Massachusetts and elsewhere. Developers, looking at the demographics of an aging baby boom population, have been excited about senior communities for some time, and local communities have embraced the concept, anticipating large numbers of residents who would pay property taxes, but wouldn’t demand many of the services — especially the public schools — that taxes finance. Looking at the proliferation of senior housing developments in Massachusetts, Citizens’ Housing Planning Association

(CHAPA) warned in a report published about five years ago that “the sheer volume of new units coming onto the market in the next 24 to 36 months means there will be much greater competition going forward. Housing developments that are not well-located, well-designed and well-priced are unlikely to succeed.” That report was written before the financial market fell off a cliff, dragging the nation’s economy and housing market along with it. If it’s any consolation, your community is by no means the only one in which owners, developers or both have begun to view age restrictions as an obstacle rather than an advantage. Which brings us to your question about how or if existing age restrictions can be eliminated. The short answer — provided by Stephen Marcus, a partner in Marcus, Errico, Emmer & Brooks, and Charles Perkins, a partner in Perkins & Anctil — is yes, but not easily. Developers seeking the change face two obstacles: The restrictions in the permits the community granted when approving the development and the requirements in the community association’s governing documents. Of the two, the permitting issues may be easier, or at least, relatively easier, to address. Under Massachusetts law, communities can’t impose requirements that render a development “uneconomic.” Developers who can demonstrate that the age restrictions are making it impossible for them to sell units in the senior community they created will have a strong argument. In fact, Perkins notes, in a recent case involving a senior community in Hanover, the Massachusetts Land Court ruled in favor of the developer for precisely that reason. (The 2009 decision is Board of Appeals of

the Town of Hanover v. Housing Appeals Committee and 511 Washington Street, LLC.) The court ruled, specifically: “[T]here is more than sufficient evidence on the record to support … [the] conclusion that the Applicant’s development, as conditioned, will not garner a reasonable rate of return … and is, therefore, uneconomic.” Overturning the objections of owners in the senior housing community will often prove more difficult than overturning the permitting restrictions, Marcus notes. A community association’s governing documents typically require a super-majority of owners — two-thirds or 75 percent in most cases — to approve a change in the master deed. Owners who object to eliminating the age restriction can block the change by persuading the requisite number of owners to vote against it. The objections are understandable. Owners who were attracted by the age restrictions, and bought their units because of them, have a legitimate complaint. One angry owner quoted in a local news article likened the developer’s request to a car dealer “selling a car and then removing the engine.” However, the concerns of developers or owners who are struggling to sell their units in a challenging and changing market also are understandable. Owners who are insisting on keeping the age restrictions in place have to consider the impact on their community — delinquent common area payments, foreclosures and declining property values, among them — if a significant number of units can’t be sold. You also should consider the possibility that you may one day be in the position of owners today who can’t find buyers for units they want, or need, to sell. CM

22

CONDO MEDIA • MAY 2010



Condo Media - May 2010

Table of Contents for the Digital Edition of Condo Media - May 2010

Condo Media - May 2010
Contents
From the CED’s Desk
Editorial Board
CAI News
CAI Regional News
Asked & Answered
Homeowner’s Corner
Operations
Legal
Management
Vendor Spotlight
Feature
Maintenance
Volunteer Spotlight
2010 CAI-NE Legal Directory
Classified Service Directory
Advertisers Index
Condo Media - May 2010 - CW1
Condo Media - May 2010 - CW2
Condo Media - May 2010 - Condo Media - May 2010
Condo Media - May 2010 - Cover2
Condo Media - May 2010 - Contents
Condo Media - May 2010 - From the CED’s Desk
Condo Media - May 2010 - 3
Condo Media - May 2010 - Editorial Board
Condo Media - May 2010 - 5
Condo Media - May 2010 - CAI News
Condo Media - May 2010 - 7
Condo Media - May 2010 - 8
Condo Media - May 2010 - 9
Condo Media - May 2010 - 10
Condo Media - May 2010 - 11
Condo Media - May 2010 - 12
Condo Media - May 2010 - 13
Condo Media - May 2010 - 14
Condo Media - May 2010 - 15
Condo Media - May 2010 - CAI Regional News
Condo Media - May 2010 - 17
Condo Media - May 2010 - 18
Condo Media - May 2010 - 19
Condo Media - May 2010 - 20
Condo Media - May 2010 - 21
Condo Media - May 2010 - Asked & Answered
Condo Media - May 2010 - 23
Condo Media - May 2010 - Homeowner’s Corner
Condo Media - May 2010 - 25
Condo Media - May 2010 - Operations
Condo Media - May 2010 - 27
Condo Media - May 2010 - Legal
Condo Media - May 2010 - 29
Condo Media - May 2010 - Management
Condo Media - May 2010 - 31
Condo Media - May 2010 - 32
Condo Media - May 2010 - 33
Condo Media - May 2010 - 34
Condo Media - May 2010 - 35
Condo Media - May 2010 - 36
Condo Media - May 2010 - 37
Condo Media - May 2010 - 38
Condo Media - May 2010 - 39
Condo Media - May 2010 - Vendor Spotlight
Condo Media - May 2010 - 41
Condo Media - May 2010 - Feature
Condo Media - May 2010 - 43
Condo Media - May 2010 - 44
Condo Media - May 2010 - 45
Condo Media - May 2010 - 46
Condo Media - May 2010 - 47
Condo Media - May 2010 - Maintenance
Condo Media - May 2010 - 49
Condo Media - May 2010 - Volunteer Spotlight
Condo Media - May 2010 - 51
Condo Media - May 2010 - 52
Condo Media - May 2010 - 2010 CAI-NE Legal Directory
Condo Media - May 2010 - 54
Condo Media - May 2010 - 55
Condo Media - May 2010 - 56
Condo Media - May 2010 - 57
Condo Media - May 2010 - Advertisers Index
Condo Media - May 2010 - 59
Condo Media - May 2010 - 60
Condo Media - May 2010 - 61
Condo Media - May 2010 - 62
Condo Media - May 2010 - 63
Condo Media - May 2010 - 64
Condo Media - May 2010 - Cover3
Condo Media - May 2010 - Cover4
Condo Media - May 2010 - CW3
Condo Media - May 2010 - CW4
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