(Author’s Note: This article is a continuation of “So You Want to Amend Your Master Deed? Then Organize,” posted in our News/Publications on May 28, 2019)
In the first part of this Article, we discussed the issue of amending master deeds in Massachusetts, including suggestions as to what a board can do to plan and proceed in an orderly fashion so as to enhance the prospects for bringing a proposed amendment to fruition. Among the matters discussed were (i) identifying what constitutes your master deed, including all prior amendments; (ii) determining the scope of the amendments to be made; (iii) appointing a committee to drill down on the issues; (iv) determining what percentage of the unit owners must approve and whether mortgage holder consents are necessary; (vi) determining how long the board has from the date of the first unit owner consent to obtain all required consents and record the amendment with the registry of deeds; and (vii) determining, before recording, that the consents have been properly executed by the owners of record.
Under Guideline 57, approval by the Land Court is required not just when a master deed creating the condominium is initially filed with the registry district, but also when a master deed is to be amended.
That discussion was of general applicability and we noted at the end of Part 1 that there are additional requirements and potential complications in amending master deeds when all or part of the common land is registered land. In Part 2, we discuss below those additional requirements and some of the impacts they may have on a board’s efforts to amend a master deed.
What is a registered land condominium? There are two systems of recording deeds in Massachusetts, with most properties constituting unregistered land (usually referred to as “recorded land”), but some being “registered land.” In brief, the registered land system allows an owner of land to make title to that land more marketable by obtaining a court judgment declaring the state of title with certainty as of the time the land is registered. Under the applicable statute, M.G.L. c. 185, such judgments are to be obtained from the Land Court Department in Boston. Since the process can take some time and be costly, often property owners will go through the process only when there is a matter creating a “cloud on title” to the property. If the registration is approved and a certificate of title is issued by the Land Court, this effectively means that the owner holds title to the property free from that cloud on title. Each registry of deeds has separate recording desks for recorded land and registered land transactions and, after registration, instruments affecting registered land must be filed with the registered land section of the local registry of deeds or with both sections if the property also includes recorded land. Unless the declarant of a condominium goes through a de-registration process pursuant to the condominium statute (Chapter 183A) and Chapter 185 at the time a condominium is created, these rules will continue to apply to that property after the condominium is created.
How will a Board know if any of the common land is registered? If the board is unsure whether the condominium includes registered land, a review of the master deed should be sufficient to make that determination. All master deeds must describe the common land and usually that is done either one of the very first sections or in an attached exhibit. While a description of recorded land almost always includes book-and-page references to recorded instruments and plans, and refers to the applicable “Registry of Deeds,” descriptions of registered land usually include references to document numbers and certificates of title filed with the applicable “Registry District of the Land Court” or “Land Registration Office.” Of course, if in doubt, check with the association’s attorney who should be able to quickly review the description and confirm whether or not the condominium includes registered land.
What are the Land Court Guidelines and how does that complicate the process? Pursuant to its authority over registered land, the Land Court has published a series of guidelines entitled Land Court Guidelines on Registered Land (last updated as of February 27, 2009), which are available for review and downloading through the Land Court’s website (https://www.mass.gov/orgs/land-court). Among the Guidelines that affect registered land condominiums (including Nos. 8, 9 and 10) is Guideline 57, governing approval of condominium documents.
Under Guideline 57, approval by the Land Court is required not just when a master deed creating the condominium is initially filed with the registry district, but also when a master deed is to be amended. Before the amendment can be submitted for filing with the registry district, a Land Court judge must sign and date the instrument. From the perspective of a board, this requirement of Land Court approval should be factored into the time and cost equation during the amendment planning stage.
What must be submitted to obtain a Land Court sign-off? Under Guideline 57, the following must be submitted before a judge will review an amendment: (1) the fully executed amendment; and (2) copies of the master deed and any prior amendments, the master certificate of title issued by the Land Court for the condominium, and the certificates of title for each of the unit owners who have signed the amendment; and (3) copies of the recorded plans, if the amendment is intended to modify any of the plans of the condominium.
Boards should keep in mind that Guideline 57 does authorize a property owner to request preliminary review of a near-final draft of an amendment by staff at the Land Court, before that amendment is executed and submitted for formal approval by a judge. This process can be particularly helpful where master deeds provide that an amendment must be filed in the registry within a specified time after the date the first owner signs (six months being a commonly used time frame). Since the Land Court Department usually is quite busy and there will be some waiting time involved in obtaining a judge’s approval, seeking preliminary review prior to obtaining signatures for the amendment could avoid or reduce time delays that could run up against the time limitation in your master deed.
What does the Land Court review under Guideline 57? Once the executed amendment is submitted, the Land Court first will review the amendment in the context of the ten requirements for valid master deeds as set forth in Chapter 183A, Section 8. Among these requirements are a description of the land, buildings, and other common elements of the condominium; unit designations and descriptive information regarding the units including the number of rooms and area of each unit; a statement of any restrictions on the use of the units or common elements; a statement of each unit’s proportionate interest in the common elements; and the method by which the master deed may be amended. The complete list appears in Guideline 57.
If the amendment does not implicate any of these requirements, then the judge likely will move on to the next step, discussed below. If the amendment does implicate one or more of the items identified in Section 8 then, generally, the Court will consider whether the proposed amendment undermines the master deed’s compliance with the applicable subsection of Section 8. If not, then the proposed amendment should pass muster. If so, then a board could be sent back to the drawing board to address the Court’s concerns a development which could jeopardize the amendment if the master deed contains a hard time limit between first signature and filing in the registry. All the more reason to consider contacting staff at the Land Court before the signing begins.
Assuming that the amendment satisfies the requirements of Section 8, the Court also will consider whether the amendment has been adopted in accordance with the amendment provisions contained in the master deed. If, for example, the consent of owners holding a total of 75% of the undivided interest and a majority of board members must sign, according to the amendment provision in the master deed, then the Court will check to determine whether this appears to have been done. If all goes well with this review, the Land Court judge will sign and date the first page of the amendment. The sign-off signifies that the master deed, as amended, satisfies the minimum statutory requirements of Chapter 183A and that the condominium remains validly form under Chapter 183A; as noted in Guideline 57, approval does not mean that the court consider any other provisions contained in the master deed, as amended, lawful or enforceable, in whole or in part.
What happens once the Land Court issues approval? Once the Court approves an amendment, another potential barrier – the registered land clerk in the local registry - awaits the board in seeking to complete the process. This is because the Land Court approval only means that the local registry district can accept the instrument for filing. It does not mean, in all instances, that it will accept the amendment for filing.
Unlike in the case of recorded land, in which the recording clerk usually makes only a limited review of an instrument (such as to check that signatures match names recited in the instrument, and that there has been an acknowledgement), a clerk in the registered land section will check to confirm that the signatures on the amendment match up with the title instruments. In the case of a master deed amendment, that means not just the signatures of the Trustees but also all the required signatures of the unit owners. This second level of review is specifically provided for in Guideline 57.
For purposes of a master deed amendment, this effectively means that the current owner of record (which may be an individual, two or more individuals, a corporation, trust, limited liability company, etc.) must sign the amendment in the same manner as which that owner holds title to the unit; otherwise that owner’s signature will not count toward the minimum requirement for approval of the amendment and this can result in the rejection of the amendment at the filing desk. By way of example, if a unit is owned by Joan Jones, Trustee of ABC Realty Trust, but Joan Jones signs the amendment only as “Joan Jones,” without proper reference to the Trust, the Court likely will reject that signature. As for any board signatures that must be included in the amendment, the board should confirm, through review of the registry records prior to formal submission of the amendment for filing, that appointments have been filed in the registry district for all of the board members who will be signing the amendment.
As with other aspects of the amendment process, planning and preparation – in this case by not assuming that owners are aware of how they hold title to their units but, rather, by providing that information to them when requesting written approval of an amendment – can go a long way toward avoiding potential pitfalls in the process particularly where the master deed limits the time between signing and filing of the amendment.
Implications of Land Court Requirements on the Amendment Process. The practical effect of ignoring or not properly planning for compliance with the Land Court Guidelines is that an amendment may be rejected outright or the time necessary for obtaining approval and getting to record may extend beyond the time permitted in the master deed. Either way, an amendment process that already can be a time consuming and costly process could be jeopardized, in the case of a registered land condominium, by a failure to plan for compliance with the specific requirements of the Land Court including as embodied in Guideline 57. For board members at a registered land condominium, then, it is advisable to obtain a copy of Guideline 57 particularly when consideration is being given to an amendment of the master deed.
So, if the moral of Part 1 of this article is “organize,” perhaps the moral of this Part 2 is, in the case of registered land condominiums, “organize even more.”