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CalAttorney2, Lawyer
Category: Real Estate Law
Satisfied Customers: 10244
Experience:  I am a civil litigation attorney with experience representing HOAs, homeowners, businesses and others in real estate matters.
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I own one of two condos in a townhouse. It was originally

Customer Question

Hello, I own one of two condos in a townhouse. It was originally a two family converted into condos. What does this clause in master deed mean in lay man terms. Does it mean one owner can buy the other unit in the event of a sale? Thanks in advance for a clear explanation. Section 29B
Financing of purchase of units by trustees
With prior written approval of at least 75% of the units here under (the vote of the unit owner of the unit whichis the subject of such vote not be counted), The trustees may acquire or lease units of the condominium. Acquisition or lease of units by the trustees may be made from any funds in the hands of units of the Trustees; or if such funds are insufficient, the trustees may levy an assessment against each owner in proportion to his proportional percentage interest in the common areas as a common expense, or the trustees, in their discretion, may borrow money to finance the acquisition of such units, provided, however, that no financing may be secured by an encumbrance or hypothecation of any property other than the specific unit or units with appurtenant interests so to be acquired by the Trustees.
Please explain in full. Thank you! Ann
Submitted: 2 years ago.
Category: Real Estate Law
Expert:  CalAttorney2 replied 2 years ago.
Dear Customer, thank you for using our service. I would like to assist you today. Responses may have a short delay for review and research.
If your CID is made up of only 2 units, this clause does not make a lot of sense (unfortunately a lot of legal documents are "cribbed" - copied from other legal documents drafted for other purposes - in order to save time and money, and are not carefully edited, leaving the documents confusing and with contradictory or unhelpful clauses).
The document does not give a "right of first refusal" (the right of one property owner to buy the other in the event the owner of one unit decides to sell).
What the clause does is give the trustees the right to purchase or lease one of the units, but it can only do this if 75% of the other units approve such a lease or acquisition. This is the part that does not work for your 2 unit HOA. Your 2 unit HOA would only have 1 unit available for acquisition by the Association, the Trustees could acquire that 1 unit, but only with the approval of the other unit, and could do so by levying a fee on that remaining unit.
So the HOA can levy one unit to get funds to lease or purchase the other unit.
There is no reason to do this - the owner(s) of the remaining unit can purchase this second unit outright themselves, avoid having the HOA purchase it (and avoid having a lien placed on it by the HOA), the HOA trustees would not be placed in a position of violating their fiduciary duty (trying to purchase the property using HOA funds from the 50% owner), and it would reduce the complications of managing the HOA (HOAs are not designed to be landlords - doing so under the Mass. Common Interest Development Act would be unnecessarily complicated and expensive).
It is more likely than not that this clause was included in your governing documents in error - if you only have 2 units in your CID/HOA, I would speculate that the law firm that drafted your documents (or whoever came up with the governing documents) did so by copying them from another association's documents, and they copied this clause over without review or revision.

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