Condo Media - October 2024 - 13

" SUPPLEMENTAL " AND
" SPECIAL " TERMINOLOGY
The Massachusetts condominium
statute does not specifically define the
terms " supplemental " and " special. "
Chapter 183A, § 6(c), specifically
excludes from the priority lien " any
amounts attributable to special assessments,
late charges, fines, penalties, and
interest assessed by the organization of
unit owners. " Consequently, in order to
avoid confusion amongst both owners
and lenders, the board needs to use the
appropriate terminology.
In a 2023 California case, the board
referred to an assessment as " special, "
and it was left to a court to determine the
meaning when a unit owner sued. In Taggart
v. North Coast Village Home Owners
Association, 2023 WL 8228855 (Nov. 28,
2023), the issue was whether assessments
made by the homeowners' association
(HOA) were " regular " assessments or
" special " assessments, the latter of which
would require prior homeowner approval
under the HOA documents. Owner Taggart
argued that the board's labeling of the
assessment as " special " made it a " special "
assessment, and the board's contention
it was for operating expenses constituted
fraud as the board was attempting to
circumvent both the law and the HOA
documents and turn a " special " assessment
into a regular assessment. After
reviewing plain dictionary meanings of
the words " regular " and " special " and the
intended purpose of the assessments, the
Court of Appeals affirmed the trial court
decision, which had " concluded that the
assessments were regular assessments,
regardless of how they were labeled by the
HOA, because they were used for recurring
operating expenses. "
In the unreported Massachusetts case
of Bonderman, et al v. Naghieh, et al,
2005 WL 1663469, a unit owner brought
suit against the condominium trust and
trustees when the trustees referred to an
extensive building repair assessment as
a " special " assessment. The Bonderman
Court noted:
" Work which is extensive - and thus
expensive - is not automatically (or
even presumptively) an improvement.
Work which fixes, restores, corrects,
and returns to a more safe and modern
condition the common elements
October 2024 CONDOMEDIA 13
may well constitute repair or restoration,
even if the work involved takes
considerable time, covers a wide
scope and costs much. The volume
and cost of the challenged work does
not put it into the improvement
category which only a vote by the unit
owners may authorize. "
What type of improvement requires
a vote of unit owners? Something that is
not already there and will increase the
common expenses for all owners - such
as adding a tennis court, a swimming
pool, or a clubhouse to the condominium;
any change or addition that would
change the description or square footage
of a unit or increase the percentage
interest of common areas and facilities;
and which would require amending the
master deed and declaration of trust,
which may require both unit owner and
mortgagee approval. For the building
maintenance needs of the condominium,
the Bonderman Court noted:
" There is not planned here any new
building, any creation or expansion
of habitable space, or any change in
the structures and improvements
of the condominium which would
necessitate an amendment to the
description of the units and buildings
constituting the condominium in the
registered master deed and accompanying
plans. "
By contrast, the Court noted that a
plan to enclose two outdoor areas to
create additional common areas by
adding over 9,000 square feet to the
condominium complex would require
approval of the unit owners and be
seen as a " special " assessment.
Owners Taggart and Bonderman
were obviously confused by the
language choice of their boards and
purpose of the assessments and took
the litigation route to determine which
meaning prevailed - and most likely
to avoid payment. Using the correct
terminology from the start and staying
consistent with terms in all verbal or
written communications with owners
will help to prevent needless litigation.
If in doubt, contact your legal counsel
for a consult.
Condo Media - October 2024

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