Frequently I’m asked by Boards and Managers to review their condominium documents in order to determine the requisite number of votes needed for various actions in governance of the condominium. With a couple of limited exception, MGLc.183A the (Massachusetts Condominium State) does not establish percentages for association governance but leaves these matters to be determined by the original drafter of the documents subject to amendment by the owners after the owners have assumed control of the association. However, there is one type of community association which has a lengthy and detailed statute governing its operation. These are manufactured housing communities (known as “mobile home parks”) which operate under the provisions of MGLc.140, Sections 32A through 32S.
Much like condominiums, manufactured housing communities are a unique form of home ownership. Within their individually owned units, (i.e. the manufactured or mobile home) the owner is free to do what he or she wishes with the home. As a general rule, manufactured housing communities do not own the land on which their mobile homes are situated.
There are approximately 35,000 people in Massachusetts living in 450 manufactured home parks. Given the limited number of parks and residents, there are relatively few court cases involving them. However, on December 20, 2022 in Crown Communities, LLC vs. Philip Austin, Trustee of the Charles W. Austin Trust & the Pocasset Park Association, Inc., a Barnstable Superior Court judge handed down a Decision of great importance to the 81 residents of the Pocasset Park Association.
The case started in 2019 when Crown Corporation (“Crown”), an out of state corporation, entered into a Purchase and Sale Agreement with Austin (the “Crown Agreement”) to buy the park, i.e., the tract of land and infrastructure, on which the park is located in Pocasset, Massachusetts. At the time Crown and Austin entered into the Purchase and Sale Agreement, there was not even an association for the owners and residents of the park.
MGL.c.140 Section 32R provides that manufactured park associations have a right to purchase the park if the association represents at least 51% of the residents, gives the seller “reasonable evidence” that at least 51% of the owner occupied homes approve the purchase of the park, submits a proposed purchase and sale agreement with substantially the same terms as the first buyer, obtains a financing commitment and closes on the purchase within a certain period of time.
After receiving notification of the proposed sale of the park to the corporation, some owners and residents formed the Pocasset Park Association (“PPA”) and some Membership Agreements were signed. In 2020 the association, through counsel, sent a letter to the park owner which attempted to exercise the right of first refusal, and which stated that at lest 51% of the owners/occupants wanted to purchase the park. The letter was accompanied by a signed petition for the purchase and by a Purchase and Sale Agreement signed by the President of the Pocasset Park Association and with substantially the same terms as the Crown Agreement. Unlike the Crown Agreement, which was an all-cash sale, this one contained a mortgage contingency clause. Crown filed suit, asking the Court to determine which Purchase and Sale Agreement was valid and enforceable.
The Defendant Pocasset Park Association alleged that the first three procedural requirements of MGLc.140 Section 32R, had not been satisfied in connection with the signing of the Crown Agreement. While the Court quickly disposed of two of those arguments in favor of Crown, more time was spent discussing the percentage of resident owners needed to exercise the right of first refusal. After a complete discussion, including the calculation of the numbers needed to reach 51%, the Court found that Pocasset Park Association had failed to meet its burden of proof.
The Court found that there was no credible evidence that PPA was in fact representing at least 50% of the park’s residents. While this could have been the end of the case, the Court went on to discuss the second element requiring reasonable evidence that at least 51% of the owner-occupied homes approved of the association’s purchase. Similar to the situation in a condominium where percentages needed for votes are those of owners, the manufactured home park statute requires the consents of 51% of resident owners. In the Pocasset case, 41% of these owners were required to approve of the association’s purchase. However, only 35 signatures of resident owners were obtained and four of those owners later rescinded their approval. Accordingly, the Court determined that the association did not successfully exercise its statutory right to purchase the property.[1]
This case serves as a good reminder that stated percentages in governing documents and/or statutes means what they say. While in this case it was not a close call, many times we receive inquiries from associations stating that a vote, which may have required 67% of the consents of the owners, received 66.25% and asking if that is “good enough”? However, much like horseshoes and hand grenades, close enough is not good enough and the Crown Agreement was determined to be valid.
For a copy of the Decision [click here].
Written by
Ellen Shapiro
[1] While there were other claims presented to the court by the association, the Court did not find that they were proven.
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