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Senior Partner Charlie Perkins forwards the article below and reiterates CAI’s concern over FHFA actions protecting Fannie Mae and Freddie Mac and against community associations:


The Federal Housing Finance Agency (FHFA) released a statement yesterday expressing concern about state statutes that allow community associations to obtain lien priority over first mortgages for unpaid association assessments. By asking a federal court to intervene, FHFA is trying to bail out mortgage servicers that have failed to fulfill basic contractual obligations to Fannie Mae and Freddie Mac.

"Make no mistake, FHFA is bailing out mortgage servicers that lacked the competency to meet basic contractual requirements and follow established rules of civil procedure," said Thomas M. Skiba, CAE, chief executive officer of Community Associations Institute (CAI). "By suing community associations, FHFA is trying to protect Fannie and Freddie at the expense of association homeowners. That's unfair, unconscionable and unacceptable." For years, CAI has joined with federal regulators (as well as Fannie Mae) to call on mortgage servicers to secure and maintain vacant and abandoned properties and meet their financial obligations to community associations and their homeowners. These calls and regulatory directives have been largely ignored with impunity by mortgage servicers.

"In one case, Fannie Mae’s servicers failed to respond to legal service of process and, despite mandatory notification pursuant to Nevada law, failed to appear at a foreclosure auction to protect Fannie Mae's financial interests," Skiba continued. "It says a lot about FHFA priorities that the agency now is suing to recoup Fannie Mae's losses from the pockets of community association homeowners, rather than suing servicers for breach of contract. Someone must stand up for homeowners and that’s what CAI will continue to do."

FHFA is nothing if not strategic, electing to release its statement on the heels of a lawsuit filed by the agency in federal court in Nevada. FHFA is seeking a determination that an HOA's foreclosure sale is invalid and contrary to federal law because it would extinguish Fannie Mae's property rights. However, the right of foreclosure FHFA is seeking to invalidate nationwide is permitted by law in Nevada, 21 other states and the District of Columbia.

FHFA asserts that it is compelled by law to file suit to protect Fannie Mae's and Freddie Mac's rights and to prevent taxpayers from incurring losses. Skiba said the FHFA statement "blatantly ignores" Fannie Mae and Freddie Mac rights under the respective seller/servicing guides that allow these mammoth enterprises to recover losses resulting from the mismanagement of mortgage servicers. Despite a range of available remedies, FHFA has opted to sue to invalidate state priority lien statutes rather than enforcing its rights under contract.

"It's incredulous that a Federal agency would sacrifice the interests of 65 million taxpayers who live in community associations to protect the very banks all American taxpayers spent billions of dollars to bail out during the economy-shattering housing crisis," Skiba said. "And it’s shocking for FHFA to attack state laws that have been in place for more than 100 years of precedent and practice. Fact is, by paying their association assessments and protecting property values, these homeowners protect the value of lenders' assets in associations. Yet, FHFA is enabling the bad behavior of mortgage servicers who don't spend a dime to maintain and protect their own property investments."

CAI will continue to monitor FHFA's hostile actions against the right of community associations to secure priority liens on properties within their boundaries.”

Get more information on the priority lien issue, including a detailed CAI statement and a map of states with priority lien statutes. See the Nevada Supreme Court decision.

With more than 33,000 members dedicated to building better communities, CAI works in partnership with 60 chapters to provide information, education and resources to community associations and the professionals who support them. CAI’s mission is to inspire professionalism, effective leadership and responsible citizenship—ideals reflected in communities that are preferred places to call home. Visit www.caionline.org or call (888) 224-4321.


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Estimates of more than 500,000 drones filling U.S. skies alone have made some associations consider whether it is time to take action-either limiting the use of drones (remote control unmanned aerial vehicles) or banning them altogether.  Commercial versions are still not permitted as far as the FAA is concerned but approval is expected as soon as next year, a move that will generate interest from businesses and industries some would find surprising, including agriculture, cinema, architecture and others.  This means a unit owner or any of the array of companies doing business with a community association, including repair, delivery or security monitoring among others may be using a drone.  With that will come the possibility (or likelihood) of accidents and grievances by owners.  The December issue of Condo Media Magazine contains an article about the issue that suggests forward thinking, but avoiding rash action.  To read more, go to www.caine.org or write to Charlie Perkins for a copy at This email address is being protected from spambots. You need JavaScript enabled to view it.. Add a comment
For those who already have a mortgage with a low interest rate, it is good news that the economy continues its recovery, although the strides in value and rising interest rates expected to mark the coming year may prevent some from considering a home purchase according to Realtor.com.  However, single family home sales are expected to increase and millennials to create a majority of new households, frequently considered a precursor to home buying.  Other positive trends expected in 2015 have to do with unemployment, housing starts and foreclosures.  Closing Attorney Rick Dunn provides this article for further illustration:  http://realtormag.realtor.org/daily-news/2014/12/05/2015-year-first-time-home-buyer Add a comment

Forwarded by Senior Partner Charlie Perkins from Community Associations Institute Government Affairs:

The 113th Congress has adjourned without extending the Terrorism Risk Insurance Act (TRIA). While legal authority for the TRIA program expires on December 31, 2014, Congress is not set to reconvene until January 6, 2015.


“CAI will continue to monitor developments on Capitol Hill and at the White House to ensure the 114th Congress takes up an extension of the TRIA program as a first order of business,” said Dawn M. Bauman, CAI’s Senior Vice President for Government Affairs. “Community associations carrying terrorism insurance coverage should consult their insurance agent to determine if their policy is impacted by Congress’ failure to act.”


The TRIA program was established in the wake of the terrorist attacks of September 11, 2001, as insurance carriers withdrew from the terrorism insurance market. The TRIA program is a federal government backstop against terrorism-related property and casualty losses. The program has stabilized the market for terrorism insurance coverage, lowering premiums and increasing coverage availability.


CAI’s Bauman said, “As our country tragically knows too well, acts of terrorism are a real and devastating threat. The TRIA program is a proven and effective way for community associations to insure against acts of terror. Our communities require certainty in the terrorism insurance marketplace and TRIA should be extended without further delay.”


A 2013 federal government study demonstrated the effectiveness of the TRIA program, noting a consistent decline in terrorism insurance premiums and increased coverage capacity since 2003. Through the TRIA program, the federal government acts as a reinsurer, allowing private insurance companies to determine maximum losses in the event of a certified act of terrorism against the homeland.


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Those serving in our armed forces had been subject to Congressional protection from foreclosure for a period of one year, a statue that was set to expire in December, 2014.  As of last Friday, they now enjoy an additional 13 months of protection under the Foreclosure Relief and Extension for Servicemembers Act of 2014. Bankruptcy Attorney David Chenelle was pleased to note that the act was passed unanimously by both the House and Senate last week. The act, intended to allow additional time for those returning from active service to recover their financial footing, also restricts the repossession of automobiles and other personal property, a measure that goes an extra step toward honoring military families. Add a comment

Long Sought For Pond in the north part of town has long been a summer gathering place for local residents as well as out-of-towners.  Summer cabins have existed on the lake for over a century but none were organized as a community association until recently.  Built on the site of a former campground, “Summer Village Condominium, A Seasonal Cottage Community” is available for occupancy by owners for ¾ of the year and represents a change in pace and scale from other summering spots.  Smaller buildings, thoughtfully designed exteriors and an emphasis on pedestrian circulation make it family friendly, affordable and community oriented.  Neighbors share fire pits, a clubhouse and recreational facilities, all with views of the lake.  As of August, new units were still going up in the wooded lots that fan out from the pavilion, lodge and beach that form the core of the community.  Visit their website at http://summervillagewestford.com


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The U.S House of Representative has agreed not to consider mortgage forgiveness as income in connection with a short sale.  This is an extension of the Mortgage Debt Forgiveness Act of 2014 and provides a measure of protection to those owners able to complete a short sale.  See more on the subject at: http://www.housingwire.com/articles/32265-short-sale-tax-break-passes-in-house Add a comment

By Attorney Scott Eriksen

A dog may be one man’s best friend, but to many condominium associations a dog can be a hassle, a nuisance or even a liability.  This is true not just for canines, of course, but for all sorts of furry friends. For this reason, many condominium documents incorporate provisions that restrict, or even prohibit, pets from common areas or units.  Properly drafted and incorporated in the governing documents, pet provisions have been held enforceable by the courts of this Commonwealth. However, there are certain situations where condominiums may be forced to allow pets regardless of what the governing documents state.


Many people are familiar with the Fair Housing Amendments Act of 1988 (“FHA”). The FHA makes it unlawful for an association to refuse to make “reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary” to afford a “handicapped” individual equal opportunity to use and enjoy his or her dwelling. 42 U.S.C. § 3604(f)(3)(B). At first glance, the FHA’s application in a pet situation may seem clear.  Individuals who, as a result of a disability, require animal assistance should be permitted reasonable exception to condominium rules. It would be hard to imagine any association that would challenge the right of a blind individual to keep a seeing-eye dog on condominium property.  But what about an individual suffering from anxiety, hypertension, depression or alcoholism? Are these individuals afforded the same rights to “reasonable accommodations” to a condominium’s pet policy?  The short answer is: it’s certainly possible, and associations would be remiss to flatly deny these requests without at least considering the potential implications under the FHA and state law.


All associations must be aware that the term “handicap” is not limited to physical disabilities.  “Handicap” is defined under both federal and Massachusetts law to include “a physical or mental impairment which substantially limits one or more of [a] person’s major life activities.” 42 U.S.C. § 3602(h); M.G.L. c. 151B, §1(17).  This broad definition has been held to include the conditions referenced above, as well as numerous other mental and psychological disorders. What this means in many cases is that a “handicap” may not be physically determinable or readily apparent. This can create challenges for condominium boards tasked with evaluating requests for exceptions to an association’s pet policy.


Consider the following example: Tom Katz sends a letter to the Board to inform them that he needs a “reasonable accommodation” from the association’s pet prohibition to adopt and keep Hairball, a 15lb Persian cat who has no training as a “service animal.”  In support of his request, Tom indicates that he suffers from anxiety and that Hairball’s company is necessary to treat his condition. Tom also includes a letter from an out-of-state medical provider stating that Hairball is one means, but not the sole means, of treating Tom’s anxiety. The Board, fresh off an enforcement action against another unit owner for pet violations, is seriously opposed to John’s request. They do not believe Tom has met his burden to show Hairball is reasonable or necessary for him to use and enjoy his Unit.  Should they write a polite denial letter to Tom and refer him to the provision of the documents prohibiting cats?


The first thing the Board should do when it receives any correspondence which could be construed as a request for a reasonable accommodation is refer it to counsel.  The fact of the matter is that each of these requests and the attendant circumstances will likely be unique and different.  One thing that is clear from the case law regarding FHA and state law discrimination claims is that a “reasonable accommodation” analysis is a malleable analysis – there is no one size fits all.  This means it will be important for an association facing a request to gather as many facts as possible and present them to counsel for proper consideration in light of the law.


While the FHA and state discrimination laws can be unyielding in many respects, both federal and state courts have noted that the duty to make a “reasonable accommodation” does not simply spring from the fact that a unit owner wants the accommodation made.  The courts have given some meaning to the “reasonable” component of “reasonable accommodations,” stating in many instances that there must be a nexus between the animal and the disability in order to establish a valid claim under federal law.  In addition, reviewing authorities may also conduct a cost-benefit balancing test taking both the association’s and the requesting individual’s needs into account.  As noted above, however, there is no “bright line” rule for what is “unreasonable.”  In that respect, it is a bit like pornography – the courts just know it when they see it.


With this in mind, we turn back to Mr. Katz:  In advising the board on an appropriate course of action we might consider the Massachusetts Superior Court case of Nason v. Stone Hill Realty Ass’n, 5 Mass. L. Rep. 305 (Mass. Super. Ct. 1996).  In Nason, the court held that where an affidavit from a doctor did not indicate that a support animal was the sole means of addressing an owner’s disability, then the unit owner had not demonstrated that an accommodation was “reasonable and necessary.” This ruling was made in connection with a preliminary injunction request, however, and the court went on to note that there could be a basis on a “fully developed record for a finder of fact to determine that keeping the cat is necessary given Nason’s handicap.” “[T]he record before the court fails to clearly demonstrate the nexus between keeping the cat and [the Plaintiff’s] handicap sufficient to warrant the court to intervene at this juncture of the litigation.”


In light of the above, Mr. Katz’s board may have some basis for denying his request.  However, the board should be aware that doing so may not be the end of the story.  It is possible that Mr. Katz could claw back with a discrimination claim against the association.  Any given reviewing authority (a court or the Massachusetts Commission Against Discrimination, for example) may have a different perspective on what is “reasonable” and “necessary.”  If such a reviewing authority finds that a requested accommodation is in fact “reasonable,” the association may find itself in a hairy situation.


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This month’s edition of Condo Media has on its cover an image that promotes discourse among community association members.  The article, entitled “Words of Wisdom: Industry Veterans Share Their Best advice”, contains a response by Charlie Perkins who suggests transparency between board members and owners as a key component of a healthy community.  Surprise, says Perkins, is an aggravating aspect of any controversial decision and is to be avoided by appointing committees and fostering understanding among all involved.  For more information or to see the full article, go to the Condo Media website (http://www.caine.org/MediaMagazine/Default.asp) or email Charlie at This email address is being protected from spambots. You need JavaScript enabled to view it. Add a comment
We have posted in the past about ways for first time buyers to make the buying process a bit smoother.  These have included managing expenses prior to the purchase, obtaining professional assistance during the transaction, and how to choose a lender.   Attorney Rick Dunn suggests the following link for more tips:  http://www.fool.com/how-to-invest/personal-finance/credit/2014/12/07/8-critical-steps-for-first-time-home-buyers.aspx. Add a comment
Real estate developer and P&A Client SPL Development Group, LLC has nearly finished the build-out on its project in Salisbury, MA called The Village at Salisbury Square.  With 27 units sold as of December 8, only four remain in the pocket style neighborhood.  As a way of reversing the long-standing trend toward single family homes on large lots, SPL president Steve Paquette has focused on community over cars and shared greenways and walkability over pavement and driveways.  Steve shares with many home buyers a desire to restore a sense of community to neighborhoods that began eroding after WWII.  This is done in large part by orienting facades toward each other and providing shared amenities for residents.  Three house plans of differing sizes and myriad options for finishes and conveniences make the choices for customizing nearly endless.  Energy efficiency in all buildings is also a priority.  P&A Managing Partner Rob Anctil invites people to view the website for more information on the project and on pocket neighborhoods in general:   http://www.thevillageatsalisburysquare.com/index.php Add a comment

After implementing borrower requirements for near-perfect credit scores and other stringent measures, some major lenders are reversing course.  This is due to Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) issuing new guidelines for lending which are expected to take effect in the coming weeks and will bring with them shorter loan application processing periods.  Closing Attorney Rick Dunn suggests borrowers read this article on the subject:


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By Attorney Scott Eriksen


For many New England community associations, the fall means more than just apple-picking, cool weather and leaf-peeping.  It also means association meeting time, and very often at those meetings you may hear the board, management or legal counsel invoke the wonder of “Robert’s Rules of Order.”  If you are like most people, you may have never heard of Robert and his Rules before, or if you have, perhaps only in passing. While the subject may seem a bit esoteric, rules of parliamentary procedure – of which Robert’s version is perhaps the most well-known and oft-used – are very handy in facilitating an organized, productive meeting.

We will come back to the important points of parliamentary procedure in a minute but first: seriously, who is “Robert” anyway?  Henry Martyn Robert was raised in Ohio, graduated fourth in his class from West Point in 1857 and served in the Corps of Engineers during the Civil War.  Robert’s claim to fame – his Rules of Order – originated here in the Commonwealth while Robert was living in New Bedford.  Legend has it that Robert authored the Rules in response to some difficulty he had leading a church meeting which devolved into chaos over abolitionist concerns.  Determined not to face an angry, Yankee mob unprepared again, Robert penned the first version of his now ubiquitious rules.

So that’s Robert in a nutshell – West Point alum, general, and engineer by training.  A man who sought and created a method to instill order, form and efficiency at meetings.  Now, back to the Rules themselves.  First, a reminder, Robert’s Rules is but one manual of parliamentary procedure.  To say a meeting is going to be run in accordance with Robert’s is to commit to that manual.  Often times it is more accurate to say that a meeting is going be run in accordance with some level of parliamentary procedure.  The level of formality may depend on the nature of the meeting, the size of the group and the participants’ knowledge of formal rules like Robert’s.  However, almost all meetings of owners warrant some level of formality to ensure a timely and effective review of the important matters at hand. So without further ado, our recommendations and pointers on implementing formal procedure at your next meeting:

  1. One Size May Not Fit All: Meeting formality is a sliding scale. Too much can be just as troublesome as not enough, and size matters when it comes to determining how best to proceed. Meetings with fewer participants (board meetings) may be run effectively with less formality, while too little formality at larger meetings may lead to delay, confusion and chaos. Adopt an approach that works for the size of the group involved.
  2. Be Consistent: Once you have settled on an approach to running the meeting, stick with it. Changing tack over the course of a single meeting will only lead to disruption.
  4. Know Your Documents: The association’s governing documents are important in determining the application of rules of parliamentary procedure. What constitutes a quorum? What vote is necessary to carry an action? Are proxies allowed? The answers to these questions are typically set forth in association’s governing documents and individuals charged with overseeing a meeting should be familiar with their implications.
  5. The Motion: The motion is the basic building block of conducting formal business at any meeting. Under Robert’s Rules, the motion, made by an authorized member of the body, should be the starting point of virtually all discussions, votes or actions taken at a meeting. Recognized individuals may make a motion by simply stating: “I move to discuss the association’s budget for Halloween decorations…” or “I move that we discuss hiring Sno-Be-Gone to do our plowing this winter…” Most motions require a second in order to proceed. That is, another member of the body will say “I second the motion regarding the Halloween decorations,” or more simply “I second the motion.” Once this has been completed, the subject has been “put in play” and formal action may be taken. That is motion practice simplified to the extreme. Depending on how closely you follow Robert’s Rules, motions can be tricky. Some motions are debatable, while others are not. There are thirteen ranking motions. There are main motions, subsidiary motions, privileged motions, incidental motions, and bring back motions. It’s enough to make one’s head spin. For our purposes, suffice to say that a motion and a second are the “kickoff” of most discussions, actions and votes at meetings.
  6. General Organization of Meetings: For larger groups, an organized structure to a meeting will help move things along and keep everyone on topic. We recommend circulating an agenda in advance of the meeting to serve as a roadmap of what will be covered. The meeting is called to order at the appropriate time by the chair (usually a member of the governing board) or a moderator (perhaps counsel or a professional parliamentarian). A quorum must be established to take formal actions at the meeting. Once this has been completed the substantive topics of the meeting –discussions, votes or otherwise – should proceed in accordance with the agenda.
  8. Voting: When a motion is made and seconded, the chair can put certain questions to a vote of the assembly. The question (sticking with the example above, “Whether to increase the budget for Halloween decorations”) is put to the assembly and then subject to debate. The chair or moderator calls upon members of the assembly in turn – giving them “the floor” – to speak for or against the question. All debate should be confined to the question at hand. Once all of the members of the assembly who wish to speak have done so, the question is put to vote. Votes may be conducted by show of hands, voice or ballot. As noted above, the necessary vote depends on the governing documents.
  10. Keeping Minutes: Minutes are an important record of all meetings. A member of the governing board or, in some cases, a management agent should be designated to take minutes. The minutes should, at a minimum, include the following information: the type of meeting (annual, special, etc.), the name of the association, the location of the meeting, the date and time the meeting was called to order, whether a quorum was established, descriptions of all motions, actions and votes taken, and the time of adjournment.
  12. And Last, But Not Least: After a long night, perhaps the most awaited action of any meeting is adjournment. A motion is made to adjourn, seconded, put to the body and – assuming everyone present has had enough fun – the meeting is closed.
Entire books have been devoted to the subject of parliamentary procedure, and this article is only the proverbial “tip of the iceberg.”  The goal here is to provide a handy (but brief) overview of some important points and tips to help keep meetings in order.  We strongly suggest that those interested in the subject dig deeper, and we would be happy to provide our list of recommended reading on the subject.

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Not interested in inner city living or unable to pay $700K for a condo?  Managing partner Rob Anctil points out an article in Boston Agent Magazine that cites a Warren Group study on the proliferation of condominiums in places other than those well known to younger buyers.  Melrose, the tidy suburb to the northwest, has numerous single family residences but few may realize there are increasing numbers of attached dwelling units and the values are rising.  The same is true in Plymouth and elsewhere.  Communities around Boston with industrial or even semi-rural histories are now seeing conversions as well as new condo development much as Cambridge, Somerville and Arlington did in decades past.  The increase in available units and in values for condominiums in interesting communities may suggest them as a home-shopping destination for new buyers.  See the article here: http://bostonagentmagazine.com/condo-hotspots-greater-boston/ Add a comment
Perkins & Anctil’s Lead Bankruptcy Attorney David Chenelle recently received recognition from the United States Bankruptcy Court, District of Massachusetts in the form of a certificate signed by Chief Judge Frank J. Bailey.  The Recognition Award Program seeks to identify those in the legal profession who have improved the availability of or have delivered volunteer legal services in the District of Massachusetts. The Awards recognize those who have served their local communities as well as assisted in the administration of justice in the United States Bankruptcy Court.  David’s commitment to providing “Equal access to justice” and to performing Pro Bono work and in addition to his regular case load have made him a repeat recipient of this honor. Add a comment
The recent J.D. Power U.S. Primary Mortgage Origination Satisfaction Survey suggests this is due to less than thorough transparency on the part of lenders and borrowers. First time buyers report a lack of understanding of the process while lenders find clients can be less than forthcoming regarding their financial situations.  The results can lead to confusion, a borrower ending up with a mismatched product or even abandoning the idea of home-buying.  Closing Attorney Rick Dunn came across this article with some pointers for first time buyers:  http://realtytimes.com/consumeradvice/mortgageadvice1/item/31697-20141121-dont-assume-you-cant-get-a-mortgage-loan Add a comment

Lack of agreement in rulings by the Supreme Court and by one District Court has resulted in some homeowners being relieved of responsibility of paying off second mortgages and not others.  At issue is whether a house that is underwater permits a borrower’s second mortgage to be voided by the bankruptcy court-the junior loan being worthless the vast majority of the time in such cases.  Bankruptcy Attorney David Chenelle recommends the following article for clarification:


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Federal Home Loan Mortgage Corporation chief economist Frank Nothaft has noted that 30-year fixed rate mortgages dropped below 4% in mid-October, their lowest since 2013.  They remain at 3.99% as of November 21, signaling a strengthened purchase mortgage market.  Closing Attorney Rick Dunn forwards the following link:  http://realtormag.realtor.org/daily-news/2014/11/21/spread-word-mortgage-rates-below-4 for further information. Add a comment

Many people are of the belief that the mortgage crisis that began in 2007 was brought about by underqualified first time buyers defaulting on loans that were too readily available.  Bankruptcy Attorney Dave Chenelle points out a November 14th, 2014 New York Times article by Bethany McLean that states otherwise. Her research indicates the majority of bad loans were a result of cash-out refinances of existing mortgages.  Using the mortgage as a source of credit can be the only way for some to meet their financial needs but the combination of rising home values and falling interest rates will definitely lead to a correction.  People interested in the full article can see it here:


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After state and local entities pledged hundreds of millions of dollars in cutbacks to support the city’s re-worked pension plan, U.S. Bankruptcy Judge Steven Rhodes called the agreement a miracle.  While retired workers will accept a reduction in income and benefits, the plan guarantees the checks will continue to come for the rest of their lives.  This is in spite of the fact that the annual income of the fund is less than half of the payout.  An independent fiscal expert named by Judge Rhodes did, however, find the plan feasible but only in light of actuarial practices such as “rolling amortization”.  A debate among those in the risk management industry has ensued.  Bankruptcy Attorney David Chenelle forwarded a link with the full article:  http://dealbook.nytimes.com/2014/11/11/detroit-emerges-from-bankruptcy-pension-risk-still-intact/?emc=edit_dlbkam_20141112&nl=business&nlid=66184561&_r=1 Add a comment

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